Are you considering acquiring a luxury home in Colorado?
Colorado is one of the most beautiful states to call home. With its rugged landscape, gorgeous mountains and plentiful sunny days, it's a prime spot for owning a luxury home.
But there are many things to consider when making this purchase. After all, it's a pretty big deal!
So where do you start the whole process?
Read on to learn what goes into the acquiring your new dream home.
Getting the Ideal Luxury Home in Colorado
You've worked hard to get to the point where you can comfortably invest in a luxury home. So you want to be sure that all of your hard work pays off.
That's why we've got seven tips from luxury real estate pros that will help make buying your
luxury home in Colorado a great experience.
1. Get the Right Real Estate Agent
You want to work with qualified and experienced real estate brokers who know the luxury market.
Agents who know how to navigate the luxury market could have insider information about listings before they even hit the market. And if you're interested in a specific property, they'll also be able to help you determine the market value of it.
Determining the value of luxury real estate is tricky. Standard residential real estate is valued by comparing prices to similar properties that have recently sold in the area. But due to the unique nature of luxury real estate in Colorado, there might not be many comparable properties, so it's more challenging to establish the real market value.
2. Understand the Internet Search Process
Many high-end luxury homes go unlisted to protect a seller's privacy. They won't show up on the Multiple Listing Service (MLS). That's why it's essential to have a well established local agent.
You can still conduct searches on the internet. Just be sure to check with other online sources beyond the large search engines. Realtors selling luxury homes might choose to avoid the bigger engines to keep keep exclusive opportunities limited to a more discrete subset of potential buyers.
If you do find a potential property through an internet search, keep in mind that the photos don't tell all.
Photographing large homes is particularly difficult and doesn't do them justice. So it's easy to dismiss a property based on the photo of its front elevation.
3. Be Sure You Can Afford the Home
Financial considerations should be a top priority so that you can establish a realistic price range.
You can start by figuring that you'll need to make a down payment of between 20-50%. Then you need to factor in the expenses of closing costs and furnishings. All of that is going to be around 33% of the purchase price.
If this is to be your primary residence, you should be able to find a decent loan rate for your mortgage. If it's your second home, this could be a little more challenging - though lenders are not as hesitant as they once were, especially if you have a significant down-payment.
You'll want to be sure you can afford both mortgages. Or possibly three mortgages if you're planning to use your home equity line of credit.
And if you plan to rent out your luxury home when you're not using it, you can subtract this income from your expenses.
4. Practice Due Diligence
There's a good chance that your luxury home in Colorado is going to need more than just one home inspector.
In fact, the larger the home and the more amenities it has, the higher the likelihood you'll need specialized home inspectors.
Some amenities that require these inspectors include:
- Fountains and ponds
- Pools and spas
- Exterior fireplaces
- Automatic screen and awning systems
- Heated floors and/or driveways
- Advanced security/surveillance systems
- Landscape lighting
- Central vacuum systems
It is imperative to be sure that everything that needs to be inspected is safe and fully operational. Otherwise, you'll may be faced with the unpleasant surprise of costly repairs later.
5. Gain Some Understanding About the Taxes
Knowing about how taxes affect luxury real estate is very important when you are involved with the buying and selling. This is especially true if the property you wish to purchase is going be your second residence.
For instance, if you plan to make your second residence your primary residence after you retire. Should you choose to sell your primary residence, you'll get a double tax break.
Make it your permanent residence for at least two years before you sell your primary residence and you could qualify for up to $500,000 of tax-free profit on the sale.
This is just one example. There are many factors that will have an effect on the particular tax implications of your investment in luxury real estate. Your real estate agent can offer you up-to-date guidance in this area.
6. Know the Right Time to Buy
The obvious time to buy is when prices are low. But the market will also be much more competitive and available properties are quick to disappear.
And you may not be able to immediately take advantage of that window.
Don't despair. Because while assets may fluctuate in value in the short term, vacation properties in popular areas like Summit County, Colorado tend to retain their value.
There are no guarantees, of course.
Real estates prices fluctuate erratically, but if you have the financial ability to invest even when prices are higher, it's certainly worth the risk to get that luxury home in Colorado.
7. There's Always Room to Negotiate
It may be a sore point with some people. But the luxury home market is no different from the standard market when it comes to negotiations.
I may help to check surrounding areas for future development plans as this will have an impact on the future value of the property, and could be a powerful lever to pull when negotiating the final price.
Also, if the desired property is lacking a few essentials, then don’t be afraid to negotiate a lower price. A motivated seller will see eye-to-eye with you.
Your Colorado Luxury Home Awaits
It's time to make it happen!
Whether it's your primary residence or a vacation home, you want your luxury home in Colorado to be perfect.
If you're ready to enlist a professional real estate broker who understands the luxury market in Colorado’s high country, let us know. We'll guide you through the necessary steps to get you exactly what you want -- and what you deserve.
By Coldwell Banker