Luxury homes are usually found on specific streets or neighborhoods with similarly appointed and priced houses. They tend to have high-end features and quality amenities that differentiate them from other types of homes in the area.
If you choose to buy a luxury home, expect it to be one of the most crucial decisions you’ll make in your entire life.
Tips For Buying Your Luxury Home Even When You Don’t Have Cash On Hand
The following are some tips that can help you get the luxury home you desire without taking a big hit to your finances:
Time Your Purchase Right
It’s a look back on your basic economics, specifically the supply and demand drive prices. When there’s less demand, expect to see a better price, which you can afford. So, if you’re looking to land on a luxury home you consider to be out of your price range, check out listings during the off-season (typically during winter).
Most of the time, people aren’t excited to go on home visits during cold weather. During winter, most people focus on family time and spending their money on the holidays. Another advantage to shopping for your desired luxury home during the off-season is that luxury homeowners might want to offload one of their properties before the new year arrives. That’s because they want to remove it from their books before they enter the next tax year.
Spot A Motivated Seller
If a specific home has been on the market for three months or more with the same price, this means that the seller might have misjudged the price list. Generally, in a competitive market, a home that is listed at the best price will go in two weeks.
It’d help to set the price change alerts for your desired luxury home to find motivated sellers. After that, you can tap a knowledgeable and reputable real estate agent for some help. CreditNinja recommends finding realtors that specialize in bad credit, since they’re experts in getting your desired home without wads of cash. Also, don’t forget to ask your agent to find out about the seller’s current situation to know how fast the seller will sell and how much wiggle room is available when it comes to the price.
Make A Straightforward Bid
Most of the time, bids with fewer restrictions can go a long way during your negotiation process. However, it’s vital to know that sellers are also looking for a seamless transaction. A straightforward offer with fewer contingencies and a short window before home closing gives the seller the impression that you want to close the deal.
Finance A Piece Of The Mortgage
If you don’t have enough cash on hand, you can consider placing a 20% down and ask the seller to finance a piece of the mortgage for you.
Suppose you want to buy a home worth $500,000, but you don’t have $100,000 on hand for a downpayment. So what you can do is apply for a smaller loan with a smaller down payment. After that, ask the seller to lend you money. The amount should be the difference between the price of the home and the approved mortgage.
It means that the seller is playing the role of the lender. You might ask, why would any seller agree to this? If the primary lender’s appraisal tends to be lower than the selling price, the seller might be at an advantage because they will also be earning interest.
Check Out Foreclosure Listings
Luxury homes that have a 15% below price range than their actual value can be found in foreclosure listings. All you need to do is search for foreclosed luxury homes in the market. It’s vital to know that foreclosed homes can only be bought with cash is a myth. Sixty percent of foreclosed homes are usually financed.
Extra Tips For Buying A Luxury Home
Below are some tips you might want to consider while buying a home:
- Learn the search process. Most of the luxury homes don’t go listed in order to protect the seller’s privacy.
- Don’t base your decisions on photos. It’s best not to reject or consider a luxury home based on the pictures you see online alone.
- Choose a local expert. Working with a good buyer agent who is familiar with the area is a great advantage.
- Document everything you have. Financial documentation is crucial when it comes to buying a home.
- Hire reliable and smart advisers- find a great realtor you can trust.
To Sum It All Up
A luxury home is a big purchase. It’s not cheap, and buying one requires a crucial decision. However, you can afford to buy your desired luxury home even if you are not a billionaire.