Purchasing your first luxury property is exciting but complex. Here are 10 critical things every first-time luxury buyer should know before making an offer.
1. Luxury Financing is Different
Jumbo loans (over $766,550 in 2025) require higher credit scores (700+), larger down payments (20-30%), and more documentation. Many luxury buyers pay cash to strengthen offers and avoid appraisal contingencies.
2. HOA Fees Can Be Substantial
Luxury buildings charge $800-$3,000+ monthly for amenities like concierge, pools, gyms, and valet. Factor this into your budget. Higher fees usually mean better amenities and services.
3. Hidden Costs Add Up
Beyond the purchase price, budget for:
- Closing costs (2-5% of purchase price)
- Property taxes (varies by location)
- Insurance (flood, hurricane, liability)
- Move-in fees ($500-$2,000)
- Furniture and design for large spaces
4. Due Diligence is Critical
Review building financials, pending lawsuits, reserve funds, and planned assessments. Hire a real estate attorney specializing in luxury properties. Check building restrictions on rentals, pets, and renovations.
5. Location Matters More Than Ever
In luxury real estate, location drives 80% of value. Waterfront, park views, and proximity to amenities command premiums. Research neighborhood development plans and future projects.
6. Resale Value Considerations
Units with 2-3 bedrooms sell faster than studios or 5+ bedrooms. South or west-facing units in Miami (sunset views) command premiums. In NYC, Central Park views add 20-40% to value.
7. New Construction vs. Resale
New construction offers customization and warranties but requires patience (2-4 years completion). Resale properties allow immediate occupancy and proven building track records.
8. Negotiation Strategies
In luxury markets, properties sell for 90-98% of asking price. Offering quick closings, minimal contingencies, and proof of funds strengthens your position. Seller concessions are rare but possible in slow markets.
9. International Buyer Considerations
Non-US buyers can purchase but face stricter financing requirements. Consider setting up an LLC for privacy and tax benefits. FIRPTA withholding applies when selling. Work with attorneys experienced in international transactions.
10. Work with a Luxury Specialist
Luxury real estate requires expertise in high-net-worth transactions, discretion, and access to exclusive listings. Many premium properties never hit the public market. A specialist agent provides access to off-market deals and insider knowledge.
Ready to start your luxury property search? Contact Team DOM50 for expert guidance through every step of your luxury home purchase in Miami or NYC.
