7 Expert tips for buying a luxury home
A luxury home, by definition, means that it’s going to be large and lavish, but that doesn’t mean it has to cost a fortune to buy.
There are several ways you can stretch your dollar to make it go far when buying your dream home, from negotiating with the seller all the way through the closing process. Here are seven expert tips for buying a luxury home at an affordable price.
Decide if it’s worth it
At first glance, buying a luxury home in Temecula may seem like it’s out of reach. After all, these properties are often priced at rates that are significantly higher than what you might be used to paying.
But luxury homes come with additional perks—and often offer greater flexibility and appreciation over time. Whether you’re thinking about making an investment or building equity through your own residence, there are several factors to keep in mind when purchasing your dream home.
Evaluate your credit score
It’s important to have good credit if you plan on buying a luxury home. The higher your score, generally speaking, the more competitive your rates will be and vice versa.
Your credit score doesn’t just reflect past behavior—it can influence future behavior, too. When you take out loans or lines of credit (like an auto loan), lenders will review your credit score to decide what interest rate you qualify for.
So not only does having high credit help ensure that your monthly payments will be affordable now, it could save you money in interest in the long run.
Understand the mortgage process
Before you go house hunting, make sure you’re well versed in home loans and their accompanying lingo.
It’s important to be able to navigate mortgage jargon as soon as possible if you want to make an informed decision about what kind of loan works best for your situation. For example, there are several types of mortgages available to buyers – from fixed rate loans and adjustable rate mortgages (ARMs) to interest-only mortgages or loans with balloon payments. But there are advantages and disadvantages to each type of loan.
A quick primer on home loans will ensure that you know enough about them before sitting down with a lender so that you can make an educated decision on which mortgage is right for your budget and lifestyle.
Get your finances in order
The first thing you should do before purchasing a luxury home is get your finances in order. Make sure that you have any debts paid off and determine how much income and savings you have available to spend on a home.
If you don’t yet have all of your debts paid off, it might be better to wait until your debt load is minimal before buying real estate. Additionally, if you plan on living in your new property full-time, make sure to obtain a loan pre-approval from one or more banks so that there aren’t any unexpected hiccups during closing.
Get help from an agent
Don’t try to buy a luxury home on your own, especially if you don’t have experience with higher-end homes. Even seasoned real estate agents often avoid luxury sales because of how much time and energy they take; there’s more competition in those markets, making it easy to lose out to cash buyers who are ready to go with no contingencies.
The expertise of an agent can make all the difference when you want to buy in those markets—especially if you need someone well versed in navigating other complexities such as financing, contracts and negotiations. It may not always be possible, but getting an agent is usually worthwhile when buying at that level.
Look for an agent who knows her market area very well and has worked with luxury buyers before. Experience matters, so ask lots of questions about what she’s done before to prepare for similar situations—and how she handled them successfully or unsuccessfully. If a seller refuses to negotiate on price or insert multiple conditions into a contract, for example, did she let it slide or did she push back?
She should give you examples from past deals, including how long negotiations took and any hiccups along the way.
Know what you can afford
Your budget is one of those known unknowns. Even if you can afford to buy more house than you really need, that’s not going to help if you’re living paycheck-to-paycheck. Make sure you can handle both your mortgage and all of your other expenses after buying your new home.
Making a sizable down payment is typically what lenders want to see when taking out loans for luxury homes (or any home), and it goes without saying that making timely mortgage payments on time helps keep your credit intact. Plan ahead: You’ve done research on many different Temecula homes for sale in addition to other real estate markets in Southern California. That means you have time (and perhaps cash) on your side—so why not be strategic?
Visit open houses
While it might be tempting to put in an offer on your dream home right away, Temecula real estate experts urge you to keep looking at other homes. After all, finding your dream home is only part of what goes into buying a home.
You’ll also have to go through all kinds of processes—such as making offers and negotiating with sellers—that could lead you away from that initial ideal location. The key is to keep looking until you find exactly what you want and then make your move. Don’t settle when it comes to finding your ideal luxury home—and don’t stop until you get there!
Look at multiple homes before making an offer
The MLS (Multiple Listing Service) can be your best friend or worst enemy. Although it helps home buyers find all available homes, agents aren’t always willing to share information.
Your agent should have open communication with other agents and if you find another home that might be better, she should be able to go look at it as well—and maybe even schedule a showing while you’re there! If she isn’t willing to do so, consider finding someone who will; you need an advocate in order to make sure you get what you want out of your home purchase.
Check out Temecula real estate listings and browse through photos of various homes before making an offer on one.
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