We like to help our buyers understand that buying a luxury home in White Rock, Langley, South Surrey or other popular BC communities, is unlike any other type of real estate purchase for many reasons. The obvious reason is that you are likely spending one or two million dollars or more, but there are also plenty of other obstacles a luxury home buyer will come across when purchasing large estates and luxury homes.
In this blog article we give five tips for first time home buyers of luxury real estate properties.
1. Don’t get caught up in the appeal of luxury, remember this is a long term investment.
It’s easy to get caught up in all the high end finishes you may find in a home or start dreaming of all the great parties you will throw in the home. But sometimes the price tag on a luxury home does not match the actual features throughout the home and property and your emotions may prevent you from seeing that.
For example, an equestrian estate home in High Point Langley may have been built recently and is in a well-known affluent area, but the home itself could lack charisma and up to date automation or features, which can negatively affect the house value.
Many first time luxury home buyers who are not yet familiar with the market may not be aware of what happens to be the current most advanced automation for residential properties and end up paying too much for a home purely for the area, forgetting that eventually you may want to sell this property. If you overpay now you could come out at a loss as things evolve into more advanced options in time.
It’s good to know a Realtor or real Estate Professional who is familiar with the current luxury market, has viewed other homes in the area and can tell you if the home appears to be outdated in comparison to other homes in the area.
2. You must know how much home you can afford and know the future maintenance costs of the home.
Once you start looking into the millions and you start viewing some truly elaborate home designs and floor plans with custom mill work and international influenced architecture it’s easy to get excited and let your emotions take hold. It’s important that you set a budget for what you can afford and stick to it.
If you are planning on obtaining a mortgage for a Luxury Home you need to remember that a 5% down payment on a $8,000,000 home is not a small chunk of change. You need to be sure your budget accurately reflects a positive at the end of all your potential bills for property taxes, heat and hydro bills, landscaping costs, pool maintenance, tennis court resurfacing, cleaning services, typical house maintenance and mortgage payments.
3. Marketing, promotion and pictures can be deceiving in the Million Dollar Home price range.
You need to actually view luxury homes in person to fully understand its value. It is normal for higher priced real estate listings to have a significant advertising and marketing budget. This means that Realtors can hire professional photographers who may alter or photoshop the home to make it look more spacious, to make the views look better than they actually are, and even alter the color of the grass to make it look greener than the neighbour’s lawn. Go to the property yourself and if you want to compare that property to another, view both in person. The grass may very well look greener on the Realtor’s website until you see the property in person.
4. Don’t be afraid to negotiate larger quantities off the list price when you are dealing with prices in the millions.
Negotiating for a $15,000,000 home on Marine Drive in White Rock is much, much different than a $150,000 condo in North Surrey which would have very little room for negotiation. Often when negotiating prices on a $5,000,000 estate you will find that you may be able to negotiate tens of thousands off the list price right away at initial offer price depending on the property, recent sales and how long the home has been on the market.
5. Ask a Realtor to show you market comparables.
If you’re going to make a $1,000,000 purchase on a home make sure you check the recent sales in the area. A professional local real estate agent who is familiar with high end luxury real estate listings knows what has sold in the area in the last while and for how much. This kind of information is not available to the general public. Negotiating on a home by using other currently listed home prices as a comparable can be as effective as bringing a knife to a gun fight. You need a Realtor who understands what has actually recently sold in the neighborhood.
Nervous about buying your first Luxury Home or Condo and not sure where to start?
Contact Ryan Taylor by phone at 778-929-4290 or complete the quick form below and we will be in touch with you soon.