If your considering buying a luxury home, you’ve probably toyed with the idea of foregoing a real estate agent.
While flying solo may save on commission rates, doing it on their own may not be the wisest decision.
Skipping the realtor may end up being more costly than a realtor’s commission. Not to mention the stress that comes with such a large purchase. And if you plan to sell your home, generally, you will make more selling with an agent.
That doesn’t mean you shouldn’t be well informed, however. Not only should you make sure you’re getting an incredible agent, but you should also take the time to understand which steps to consider before purchasing a home.
Before you reach out to an agent, prepare ahead of time by doing some research. In particular, here are three things you can do so that you’ll be fully prepared.
Decide on a Budget
Since the home buying process tends to be both exhilarating and emotional, it’s easy to get overly excited and spend more than you can afford. That’s why you should take the time to figure out what you can afford and what’s realistic before contacting an agent.
When deciding on what you can afford, think about how much you can pay per month in mortgage payments. It’s essential that you don’t get in over your head. In addition to monthly mortgage payments, consider the following:
Taxes: Am I up to date on paying my taxes and will I have enough to pay them if I take on this mortgage payment?
Maintenance: What if maintenance issues come up? Car problems and potential maintenance, even on a new home, may happen. Will I have enough money to cover the possible expenses that may arise?
Utilities: What will the monthly utilities be at the new luxury property?
Family: Do I have enough money set aside for family emergencies like medical issues or childcare? Even if you have health insurance, it’s vital to stash away enough funds in case of an emergency.
When contacting an agent, effectively communicate your budget with them with them. Be very clear on what you can afford and don’t leave room for interpretation.
Not only will telling an agent know what you can afford help the process go more smoothly, but it’ll also help you stick to your budget.
Going over your budget can have disastrous consequences, from being late on your bills to potential foreclosures if you can’t make your minimums.
After deciding on an appropriate budget, your agent will likely have you reach out to a bank or mortgage broker to get pre-approved.
As we covered above, make sure you’ve accounted for all of your bills, taxes, maintenance, and other expenses that may come up. After that, figure out what you can afford and then contact the bank to find out if they will loan you the money.
The housing market is competitive, so being pre-approved will make you more attractive to sellers.
Getting pre-approved will also help you expedite the process of putting offers in right away. In a competitive housing market, being the first offer on the table could make a huge difference.
Study the Market
You don’t have to be a whiz on the local market. After all, that’s the real estate agent’s job, but it is smart to stay informed. You can do this by looking at a few areas.
Pay Attention to the Trends
Find out which areas are on the rise.
Figure out which features are in the most demand. For example, are home buyers paying extra for open floor plans, modern kitchens, or outdoor spaces?
Consider if the Investment Will Increase in Value
Finding something that fits your needs is vital, but so is finding a home that will grow in value.
Carefully consider the area where you’d like to purchase a luxury home. Do you see it growing in size in the future? A place that has potential or that is already buzzing means usually the home values will go up in the future. You can generally tell if a city has potential by its nearby universities, jobs, and local attractions and locations.
It’s true that you can’t be sure of the future, but it’s still smart to have an idea of what’s going on so that discussing these trends with your agent won’t be an issue.
Read about the housing market by finding relevant luxury real estate publications. Examples include newsletters, magazines, and blogs.
Ask questions: Ask your real estate agent and other people in the field (perhaps you have friends who are in real estate) questions. You can also reach out to friends who have recently purchased a home to see what they would recommend doing before starting the process. If there’s anything you’d like to learn more about don’t be afraid to ask.
Use social media to your advantage: Do some research on the area where you’d like to purchase your home, what type of homes are available, and other pertinent information you should know.
Join groups and forums: There are countless groups and forums both on Facebook and online. Find homeowner forums where you can ask questions, read, and understand all that you can about the process.
There’s definitely a learning curve when it comes to luxury home buying, but don’t let it discourage you. It’s okay to rely on people for help, such as a real estate agent, and you should also learn all that you can along the way.
The best way to put your best foot forward is by getting the process started right away. Your home seekers quest has just begun, and it’s up to you to make sure the journey goes as smoothly as possible.
Thrive Lubbock is the newly renovated apartment complex for Texas Tech students located in Lubbock, TX. A brand new clubhouse, pool, and gym are just a few of the reasons to come check us out today!
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