Finding a Luxury Home in Sacramento
From an L street loft penthouse with spectacular city views to a mansion in Granite Bay, the options available for luxury living in the Sacramento region vary greatly. In general, most luxury homes begin at around $1 million in Sacramento, and at that price you can expect to get way more for your money in comparison to say San Francisco, Los Angeles or New York. In a secondary market like Sacramento, you can practically get a mansion on substantial acreage if you’re buying a home in the million dollar range.
Buying a high end home can be difficult and frustrating. If you’re in the market for a luxury home in Sacramento, here’s what you need to know:
Step 1: Finding The Right Luxury Home In Sacramento
You’re looking for specific features in a luxury home. You’d like sweeping skyline views, an easy commute, good schools, but still want to live out in the country – these are wishes that can all be fulfilled.
“Millionaires who are buying luxury homes usually have a lot more specifics they want and need and they’re less restricted on price,” says Carlos Montoya of Dean Adams Residential Brokerage.
While 90% of all homebuyers start their search on the Internet, there are a large percentage of high-end properties that simply aren’t listed on MLS or in any major search engines, so be prepared to expand your search offline.
Here’s a few insider search tips when searching for a luxury home:
- Talk to a Sacramento real estate agent that specializes in the high-end market. Work with an agent that knows the neighborhood you want to move to and can offer good advice on schools, nuances of the neighborhood and is well versed on the specifics of the property you’re interested in.
- Luxury real estate firms like Christie’s and Sotheby’s show exclusively listed properties but chances are really good that your local agent can work with those brokers to get you into the house you want.
- Make a short list of your top picks by physically going to see the properties in person because many sellers, protective of their privacy, refrain from putting extensive photos of their homes on the Internet.
Step 2: Do Your Homework Before You Make An Offer
When comparing luxury homes in Sacramento, the process can be more complicated than your ordinary home. According to Realtors, elements such as the home’s distinctive features and recent remodeling bear a larger weight than lower-end homes.
Consider these tips when you choose a local Sacramento Real Estate Agent to work with:
- Try and schedule a detailed property tour. Expect to spend a couple hours when looking at larger homes to review things like construction methods, architectural details, discussing the neighborhood and how the security system works, Montoya says. “It’s a much more detailed process and your agent is much more involved in the nuances of the property.”
- Address required disclosures. “Each city and county has it’s own special requirements for disclosures. It’s very important your agent know the local market,” says Montoya. For instance, some municipalities require disclosure on sewer lines, while others, underground oil tanks.
- Examine comparable luxury homes in the same neighborhood. Obtain pricing information on comparable properties. Financing and making an appropriate offer on the home can hinge on your Realtor having done their homework.
Step 3: Consider the Financing You’ll Need
The economy is recovering and lending restrictions are beginning to loosen. Even still, the lending restrictions haven’t impacted the high-end market as much as the general market because most luxury buyers aren’t connected to the subprime market.
Larger banks such as Wells Fargo, Bank of America and JPMorgan Chase are among large national banks that issue jumbo mortgages and so did defunct lenders like Countrywide.
Lenders today will require at least 15 to 20 percent down – standard. In most cases, buyers are putting down far more on high-end luxury homes in Sacramento. Realtors say 35 to 50 percent down is extremely common in today’s upscale Sacramento real estate market.
Consider this advice from the pros:
Have your paperwork ready. Including bank statements, W-2s, tax returns from the past few years and any other financial statements. “Most Sellers of these luxury homes will often ask their Realtor to bring them only vetted buyers,” says Carlos Montoya. “This is different than your typical mortgage prequalification process and could mean showing asset statements and demonstrating which of your assets will actually go towards the purchase of the home.”
“Try and get your financing approval early on”, says Montoya. “The difference between a prequalify letter and a pre-approval letter, the latter which requires extensive documentation and verification. “With a pre-qualify letter, it just provides general information, whereas a pre-approval letter will say the amount you are already pre-approved for and includes all the pedigree financial information.”
Some types of properties require an even more in-depth financial review of buyers than others. Housing coops found in larger cities like New York and San Francisco will put the homebuyer through the utmost scrutiny of their personal finances versus say a condominium. “After putting down your deposit, you still want cash on hand for at least two years of maintenance and mortgage payments,” Montoya says.
Expect a longer financing approval process. Agents say even if your financials are all in order, you can still count on 45 to 60 days before you hear back on whether you’ve been approved.
Making an appropriate offer isn’t as simple as it looks. In some instances, sellers aren’t financially motivated to sell and have the wherewithal to hold indefinitely for the right buyer.