If you're looking for a luxury home but still want to save some cash, you may feel like you're trying to have your cake and eat it too. But you can, indeed, save money and use less cash on a luxury real estate purchase if you know how to do it. Here are a few tips for any buyer.
Timing is Everything
Markets go up and down, and learning about how the luxury market moves in your area can help you find the right time to buy. Winter, for example, is a prime target for budget-minded luxury buyers because fewer buyers are looking at that time.
The fewer strings that are attached to your purchase, the more attractive you will be to a seller. And looking appealing will help you find a deal even if there are other potential buyers who can't make things as simple on the home seller.
In any real estate market, foreclosures and other distressed properties can be a gold mine. You're likely to find deals for well below market value and with fewer other buyers as competition. The money you save can be put into restoring or remodeling the home, but that can often be financed at very low interest rates (or even 0 percent interest) over long periods of time.
Use Retirement Assets
Borrowing from or withdrawing from your retirement accounts can be a good way to finance a home that you plan to stay in for a significant amount of time. Roth IRA contributions, for example, can generally be withdrawn without additional penalty as long as you don't touch the interest. Even traditional IRAs can often be used to buy a home if you haven't lived in your own home as an owner for the prior two years. And borrowing from a 401(k) plan often comes with a very low interest rate if your job is stable for the foreseeable future.
Work with a Local
Rather than working with just any real estate agent in the region, look for a local agent with experience in the luxury market. Luxury housing markets often have unique qualities that outsiders don't fully understand how to leverage. Many listings, for example, aren't on regular listing services and may only be available through word of mouth. Having an experienced luxury broker on your side can help you find deals you may not have heard of otherwise.
Whatever type of high end house you're looking for, applying any of these home-buying tips can help you save money and find the right new property with less stress. And then you can get on with the fun part: enjoying your new home!