Luxury Homes: How to Tell If You’re Getting a Fair Price

Editor’s Note: This was originally published on RISMedia’s blog, Housecall. See what else is cookin’ now at blog.rismedia.com:

Buying a luxury home isn’t as straightforward a process as one might think. This market has a lot more variables when it comes to each property, making it difficult to establish an exact market value on a home. That being the case, buyers may wonder if they’re getting a fair price on a luxury piece of property. If you’re in the expensive real estate market, here are some steps to take to ensure that the price for your home is fair.

Compare
It should be said that comparing two luxury homes isn’t the same as comparing other types of real estate. When you buy a “normal” home, your REALTOR® will look at similar homes in the area, keeping in mind the number of bedrooms, bathrooms, etc. Luxury homes aren’t built with that in mind. When you compare these types of homes, you may want to look at features like great views (if it’s a penthouse, for example), privacy, sports features, etc. This gives you an idea of what’s on the market.

Know What You’re Looking For
Once you’ve looked at a couple of properties and have had a chance to compare them, you should be able to develop a “must-have” list. Think about your financing options as well. All of these will become a factor once you’re ready to buy.

Hire an Expert
Like any other profession, the real estate market has professionals that specialize in high-end homes in certain areas. These REALTORS® know what properties in the area are going for and how to find good deals.

Additionally, real estate professionals can tell you what types of transportation amenities are in the area. This is especially important if you’re moving into an area that’s very different from your current location. Hiring someone who knows how the flow of a geographic area works will be better able to steer you toward a good location.

Timing and Motivation
Once you’ve done the first three steps, you’ll finally want to start narrowing down the properties you’re looking at. It’s at this time that you’ll be able to make an offer on a home and, more importantly, hopefully, get it at a fair price.

Luxury homebuyers should consider the timing of their purchase. They may be able to get a better deal on a home in the winter than in the summer. The same can be said for homes that go up for sale at the end of the year. These homeowners may want to get rid of the property by year’s end for tax purposes.

Additionally, you may also be able to secure a luxury home at a reasonable price if the seller is motivated to sell—but be warned. Homes priced to sell go fast, in sometimes as little as two weeks. If you find a luxury home at an excellent price, be sure to ask your real estate professional to make an offer on it.

Buying luxury real estate at a good and fair price is a process. You should start by doing some research and by hiring a real estate professional who specializes in the luxury market. From there, compare the different homes on the market. Finally, once it comes time to buy the home, look for a motivated seller. This factor, combined with all of the previous work you’ve done, will help ensure that you’ve gotten the best price for your new place.

For the latest real estate news and trends, bookmark RISMedia.com.

The post Luxury Homes: How to Tell If You’re Getting a Fair Price appeared first on RISMedia.

5 Advantages of Real Estate Auctions

Real estate auctions can be an effective sales tool for all types of properties, including luxury residential and single-family homes, as well as multifamily, retail and development sites.

While the conventional stereotype of an auction is that of a vehicle to move distressed properties, the troubled scenario no longer strictly holds true. For example, we’re seeing an overall increase in auctions of luxury residences. This uptick is especially apparent in second-home and resort markets, where baby boomers and empty-nesters are looking to sell their second residences.

In general, real estate auctions offer an efficient approach to a sale that can provide several advantages.

Auctions don’t replace brokers. Many real estate auction firms work in collaboration with brokers. Typically, the auction firm offers a cooperating broker a fee to the agent who represents the buyer. For the selling broker, the compensation structure in the conventional sales agreement often remains in place.

Auctions establish the market. An auction is a market-finding tool. By bringing together a large group of buyers to bid, that establishes what the market can be for the property.

They command attention. Real estate auctions work in much the same way as those for fine art and antiques. Auctions are exciting and draw the attention of buyers from other sales occurring in the area. They also attract interest from a wide set of potential buyers beyond the property’s immediate location. For example, the auction of a premier condominium residence at the Ritz Carlton in New York generated more than 5,000 inquiries from all 50 states, and close to 1,800 international inquiries.

The sale is completed within a definite timeframe. Real estate auctions complete the transaction within a defined period of time. Knowing the precise date when the sale will be done can provide a real convenience for the seller.

The auction process is open and transparent. One of the most positive aspects of a real estate auction is its transparency. Buyers gather and see the act of bidding. Plus, many potential buyers are unsure of the property value—an auction sets a fair market value, with a pricing floor that has a wider appeal to a much larger pool of potential buyers.

Once upon a time, real estate auctions were solely for troubled properties. Today, sellers, buyers and brokers of many different types of properties can reap the benefits of a convenient sales tool.

Jonathan Cuticelli is director of Project Management and principal auctioneer at New York-based real estate auction firm Sheldon Good & Company. Founded in 1965, Sheldon Good is one of the oldest firms in the business.

For the latest real estate news and trends, bookmark RISMedia.com.

The post 5 Advantages of Real Estate Auctions appeared first on RISMedia.

Dow 20K to Benefit Housing Market…at Least, Psychologically

There are many key metrics brokers look to in order to gauge how the housing market is trending. The Case-Shiller Index, the National Association of Home Builders/Wells Fargo Housing Market Index and the National Association of REALTORS®’ monthly Existing-Home Sales Statistics are all closely watched within the industry. For a sense of the broader economy, brokers tend to familiarize themselves with other data points such as inflation, employment and gross domestic product.

For everybody else, there’s the stock market. On January 25, when the Dow Jones Industrial Average—a composite index of 30 companies, none of which are solely in the real estate sector—passed 20,000 points for the first time, the story made national headlines. For most, it was a feel-good economic story that won’t change much except for instilling the sense of confidence and optimism, simply because it’s a nice round number.

Consequently, a whole new audience has been reached, and many of them are potential homebuyers who have not been following the minutiae of data-driven real estate news that more directly impacts the supply-and-demand equation, such as interest rates, inventory and tax reform. Unlike those important policies, which are somewhat limited to the real estate and finance industries, the stock market milestone was covered in all the papers, news sites and social media. In this environment, the hype, alone, will have significant value.

“It sounds good,” says Anthony Hitt, CEO of Engel & Völkers North America. “It sounds stable and it sounds positive and it makes me feel that things won’t go in the wrong direction anytime soon.”

Considering all the uncertainty that has been attached to the new administration in Washington—either warranted or not—it is good to know that investors in the capital markets have not turned bearish on the American economy; in fact, they’ve been quite bullish, as all major indexes are up since the election and have mostly been backed by strong Q4 earnings.

“With all the uncertainty, this is a good beacon that real estate remains a safe place to put your assets,” says Hitt, who oversees 2,100 agents in the United States, Canada, Mexico and the Cayman Islands. “It remains a safe haven, as (politically) chaotic as it seems. There was a peaceful transfer of power, and the 20,000 Dow is a sign to the entire world that (American real estate) is still a safe investment in 2017.”

According to San DeBord, managing broker of Seattle Homes Group, the key psychological factor here is certainty. Simply put: When people feel safe, they are more likely to buy.

“People want to make the decision to buy a home—a very big financial decision—when they feel most certain they’ll have the ability to pay for it comfortably,” DeBord explains. “Consumer confidence and real estate sales are somewhat linked. While the stock market’s strength may have far less influence on a homebuyer’s ability to purchase than interest rates, many consumers will make a decision to buy when the outlook for the economy looks brightest.”

Bruce Ailon, an Atlanta broker for RE/MAX Town and Country, says this is certainly true for certain portions of the economy, especially those who have sizable stock holdings and wouldn’t mind diversifying their portfolio.

“A strong stock market does create a wealth effect,” says Ailon. “Although gains are only paper until a stock is sold, people feel better and more comfortable spending money.”

The luxury real estate market is the chief beneficiary of Dow 20K, Ailon says; however, he notes that most people, even though they want to buy real estate, lack the means to leverage the milestone.

“This has a greater impact on the luxury market, (but) in a country where more than 50 percent of the population has no savings to deal with a major car repair or illness, the Dow at 20,000 has about as much relevance as finding water on Mars,” Ailon says. “I expect in the top 20 percent—more pronounced in the top 1-10 percent of priced homes—there will be improving values and greater activity.”

When the market soars, so do luxury areas around Lower Manhattan, because Wall Street is such an important economic driver for New York City. But when it comes to the rest of the nation and serving its sub-luxury buyers, Hitt says he does not think these types of psychological phenomena are confined just to the luxury market.

“It does not affect the luxury markets that much more,” says Hitt. “The confidence affects everyone. If your portfolio is up and you have the ability to make purchases, you’re more likely to buy if you have a good feeling about the economy and the markets.”

There is also a practical scenario that should not be overlooked. For the middle class and millennial first-time homebuyers, there is more buying power by borrowing against their 401(k)s or other stock market-backed funds.

With the stock market on a tear lately, a passive investor who doesn’t need their retirement funds for a while could be looking at a doubling in their savings over the past few years. All of a sudden, that $50,000 down payment is now a $100,000 down payment, and they’re in the game for a nice new home and only have to pay themselves back with interest.

For the latest real estate news and trends, bookmark RISMedia.com.

The post Dow 20K to Benefit Housing Market…at Least, Psychologically appeared first on RISMedia.

What Is the White House Worth? Nearly $400 Million, Says Zillow

Want to buy the White House? Well, you can’t. But if you could, it would go for just under $400 million, says new hypothetical Zillow data.

According to the data, the White House has appreciated 15 percent since Barack Obama’s inauguration in 2009, and is currently valued at $397.9 million. Were it to actually be listed on Zillow, it would be the most valuable home on the site—and rightfully so.

Zillow first calculated the value of the White House in 2009 using their Zestimate® algorithm, which provides a starting point for a home’s worth based on public data and recent sales. According to Zillow, the value of the 55,000-square-foot “residence” is currently at its peak. If it continues in line with the projected value growth rate of homes in Washington, D.C., the estate will appreciate another 3 percent in 2017.

“[President] Trump is moving into one of the most famous homes in the country and, according to Zillow, it’s also the most valuable home in the country,” says Zillow Chief Marketing Officer Jeremy Wacksman. “President Obama’s term coincided with a massive recovery of the U.S. housing market, and that’s reflected in the updated value of the White House. Home values across the country are growing at their fastest pace since 2006, with many markets setting new records—one of the reasons why the White House is worth more now than it has ever been.”

So what can you get for just under $400 mill? Built in the 1800s, the estate offers over 130 rooms, 35 bathrooms and 18 acres. The grounds include basketball and tennis courts, and the residence includes a gym, a sun room and a library. The President and his family will reside on the top two floors of the six-story Executive Residence. Also located in the house are a doctor’s office, flower shop and a bowling alley.

What if a hypothetical buyer wished to take out a hypothetical mortgage on the palatial presidential domicile? If they were to lock in a standard 30-year fixed mortgage on the White House today, the monthly payment would be about $1.6 million. If they wanted to rent the spot, their monthly payment would be over $2 million per month.

Zoe Eisenberg is RISMedia’s senior content editor. Email her your real estate news ideas at zoe@rismedia.com.

This was originally published on RISMedia’s blog, Housecall. Visit the blog daily for housing and real estate tips and trends. Like Housecall on Facebook and follow @HousecallBlog on Twitter.

The post What Is the White House Worth? Nearly $400 Million, Says Zillow appeared first on RISMedia.

Great Spaces: Itz’ana Resort & Residences Announces 27 New Solar Cottages

On the waterfront of Belize come 27 brand-new “solar cottages,” recently announced and available starting August 2017. The waterfront homes, situated on the beach and the marina, vary in size from one-bedroom cottages to five-bedroom villas with prices starting at $315,000. Itz’ana will feature a strong focus on sustainability throughout its design, paying respect to […]

Great Spaces: Magnificent Mountain Retreat Sells at Auction

On March 1, a Utah mountain retreat sold at auction for a mountainous sum of $4.2 million. Framed by tall trees, this custom-designed ski-in/ski-out home includes five bedrooms, eight baths, an elevator and a private six-acre estate. Located near the renowned Alpenglow Ski Run and only 35 minutes from Salt Lake City, this private home […]

Great Spaces: The Ultimate Bed and Breakfast

Have you ever dreamed of owning your very own bed and breakfast? Your dream could now become reality! In an area known for its historic architecture, the Silas W. Robbins House of 1873 stands as one of the great period homes in Connecticut. A masterful six-year restoration (2001-07) resulted in a lavish transformation that preserved […]

For Sale: New Orleans’ Very Haunted Magnolia Mansion

In a city famous for its fabulous food, music and art, New Orleans also has some of the most colorful homes in the world—many with legends that are even more interesting than the homes themselves. Encompassing everything from French Quarter cast-iron balconies and colorful courtyards, such as the Gardette-LePretre Mansion, where a Turkish sultan and […]

Great Spaces: Oprah Makes Montecito Moves

Back in December, Oprah Winfrey snapped up a deluxe ski spot in Colorado, but it appears one new property isn’t enough for this media maven. The 62-year-old talk show host recently bought a Southern California property, a Montecito equestrian farm purchased at auction for a staggering $28.5 million. One of the largest properties in the […]