Welcome to Luxury real estate
Luxury real estate (or luxury property in British English) is the
real estate market niche targeted at the highest socio-economic
group of consumers.
The characteristics that define Luxury real estate differ among
countries. However, location largely defines the property's value,
especially with respect to whether it offers views (particularly,
waterfront ones) or amenities such as proximity to golf courses,
school districts, and the downtown district. Thus, a 750-square-foot
(70 m²) waterfront home with less than one acre of property might be
worth more than a 10,000-square-foot (930 m²) mansion with ten acres
of property.
In the previous example, the former would be called a "luxury
property", whereas the latter would be called a "luxury home". Both
properties, however, owing to their high value, would be classified
as "luxury real estate".
Luxury real estate in any particular region is generally defined as
property worth more than a certain lower limit; for instance, homes
worth more than $1 million in the United States are generally
classified as Luxury real estate. The classification also takes into
account the presence of surrounding homes, amenities, views,
waterfronts, absence of crime-rate, industrialization or unwanted
commercialization, customizations of the home, and historical or
architectural significance.
Luxury real estate entails greater responsibility for agents who
handle transactions than ordinary real estate. They must advertise
to a national audience to attract non-local buyers, whereas ordinary
real estate only generally requires exposure in local media. There
are also greater legal responsibilities for the luxury estate agent,
which often involve attornies, trusts, and anonymity issues. Buyers
often require more inspections than with ordinary real estate (which
are generally bought after a single inspection).
Companies operating in the luxury real estate market often publish
their own magazines online and in print, meant to publicize their
brands. One such example is Panache Magazine, published in New York
by luxury real estate broker Panache Privée.
While there are multiple ways to accomplish a house trade, the
simplest is the simultaneous sale approach. In this scenario, you
purchase a property from another seller, and he buys your property, all
in the same transaction. As in a separate sale, you must have sufficient
funds coming in from the sale to pay off your existing
mortgage. You
also need the necessary funds to purchase the new property, or the
necessary down payment to procure a new mortgage.
Since both parties are buying new properties, both will need the ability
to purchase the other property, either through sufficient equity in
their existing house and /or additional available cash or borrowing
potential. It is therefore difficult to accomplish a trade with another
owner who has little or even negative equity.
In simultaneous sale approach, as the name implies, the two transactions
must happen simultaneously. In other words, both close or neither
closes. By structuring the closing in such a way, proceeds from the sale
of one property can be figured into the amount applied towards the
purchase of the other. In this way, you are able to apply a portion of
your existing equity towards the new property.
Online trading can take two forms.
The first is simply the inclusion of a text box alongside a real estate
listing, stating the the seller will consider a trade and possibility a
description of what the seller is looking to trade for. Craigslist is a
popular example of this. While not specifically geared towards permanent
trades, it is often used for such a purpose. Their are also several web
sites, mostly set up by Realtors, that make use of this approach.
The second, more sophisticated approach, uses a model similar to a
dating service. Such a web site matches sellers with other sellers based
on what each seller has and what each is looking to trade for. There are
a small number of web site that make use of this approach.
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