Luxury homes. They are some of the best homes that the United States has to offer and you may try everything that you can think of to get your hands on one.
In the United States, 8.2% of the homes in the real estate market were worth over $1 million in 2021. Perhaps this is a price range you feel comfortable buying a home with.
If you are new to the luxury home market, you are probably wondering how to buy one in Paradise Valley, AZ. This guide should give you a good idea of what to look for.
Research the Location
Just like buying a normal home, you should consider what location you are looking to buy a home in. In this case, it is Paradise Valley, AZ.
Let’s take a closer look at this location. According to the 2020 Census, the median home price in this town is over $1.6 million. That should give you an idea of how much money you will need and how much you are willing to spend.
However, the price of the house should not be your only factor when it comes to location. If you have kids, how good is the school system? If you are older or in poor health, do you have close access to good doctors and hospitals?
These are some things that you need to take into consideration. You may also want to look into what kind of people are you going to have as neighbors and residents of the same town.
Does political allegiance matter to you? Does a diverse population matter to you? Do you want to be in a location that has more males or females? What about an area that has more families or people that are retired?
Consider what you want when it comes to these questions and decide what matters most to you if anything.
In Paradise Valley, about 30% of the people who live there are 65 and older. About 87% of the people who live there are white and nearly 19% of people who live there are 18 or younger.
Another thing that may be good to know when it comes to Paradise Valley is that it has a decent veteran population. It makes up over 5% of the town’s population, so this area could be appealing to veterans.
Know What You Want
The next thing that you have to do is figure out what you want in a luxury home. There are all different types of designs and assets that can make a home be defined as luxurious.
However, there are going to be things that you do not like or do not care about. In contrast, there will be things that you fall in love with, so you need to have an idea of what those things are.
For example, let’s say that you are someone that demands to have a big backyard with an in-ground pool in it. That will be something that you look for and are willing to invest in compared to a place that has a below average backyard.
You could also be someone that wants to have a great view of nature or close access to nature. Knowing that in advance can help you narrow down your choices when it comes to purchasing a luxury home.
Create a Budget
Along with knowing what you want, you also need to know how much you are willing to spend. You have to remember that this is a luxury and not a necessity.
So, make sure you go over finances and reassure yourself that you can afford it.
However, do not just factor in the price of the house. You need to prepare for future maintenance fees of the house, the added cost of utilities for a bigger home, the larger property taxes on a luxury home, and an emergency fund in case you have a rainy day.
In other words, if you have nearly $2 million in your bank account, perhaps it is not the best idea to buy a home that costs $1.6 million. You have to decide how large of a percentage of your assets you feel comfortable putting into a house and then make sure that you can afford to do this.
While it is a luxury home, you still have wiggle room to negotiate in certain markets. Know what conditions could get someone more willing to negotiate and do not be afraid to put up a counteroffer.
For example, let’s say that someone is looking to sell their house for $1.8 million. You do not want to spend more than $1.6 million. So, what you need to do here is feel out the market and see if it is something that can be priced down.
However, if you are willing to spend $1.6 million in this situation, you do not want that to be your counteroffer. You need to leave yourself room to negotiate or maybe even get a surprise deal and spend less than anticipated.
So, say you countered with an offer of $1.5 million. In this situation, the seller may counter you back and show you that they are willing to lower the price of the home. Then, you can go from there and work out a number that you both can agree to.
There are pros and cons to this situation. The pro is that you are probably going to have to compete with fewer buyers since only a small percentage of the population has this kind of money.
In the United States, there are about 22 million millionaires across the country. That is less than 10% of the population and that represents the entire country. Essentially, you have much fewer people with access to this home.
The con is that your competition may have enough money where they see no reason they need to negotiate.
Prepare for Cash Offers
Do you know how a lot of people buy a mortgage in the United States? Well, when it comes to luxury homes, it is very unlikely that buyers are going to need to finance this type of home.
A lot of people buying these types of homes already have the capital to pay for them. This is because it is a want rather than a need.
What does that mean for you? It means that you need to prepare to have an offer in cash. This is why it is essential to make sure that you have the money to buy a house because, with these types of houses, you have an increased chance of losing the bid if you need financing.
However, while that is typically the rule, do not think that it is gospel. It is possible to buy a luxury home with financing, especially if the seller meets certain criteria.
Times when you may be able to do this are if the seller has no other buyers interested, no other buyer is making a high enough cash offer, or the seller simply wants to get rid of the house as quickly as possible. If your seller meets any of that criteria, they may be more willing to accept an offer on finance.
However, knowing what the typical rule is for this market, try to make sure that you can make a cash offer if you have to.
Photos Aren’t Everything
Finally, you may look at a luxury home online and fall in love with it before you even see it for yourself. Try not to do this because professional photographers are very talented at what they do.
This is not to insult them but rather to tell you that homes can look better than what they are through photos. Photographers can edit any negative imagery out of photos, they can take photos at certain angles to make the house look better, and you have more of a scripted setting in photos.
What this means is that your eyes can play tricks on you and a house in real life may not turn out to be what it seems. So, keep an open mind until you see the house for yourself.
Buy a Luxury Home in Paradise Valley, AZ
These are just a few things that you should keep in mind when attempting to buy a luxury home in Paradise Valley, AZ. Keep in mind the average income and demographic of this area set a strict budget, and figure out what you want in a home.
Do you want to buy a house? Message us today to get started.