Determining What Constitutes a Luxury Home is More Complex than You Think
Have you ever mindlessly daydreamed about what it would be like to own or sell a luxury home? Yeah, well us too. These magnificent mansions bewilder our imaginations: Olympic-sized indoor swimming pools adjacent to basketball courts next to professional kitchens suited for a chef.
Who thinks of this stuff and who has the money to buy such luxurious things? Believe it or not, there is a very big luxury home market that, if you have the connections, can help you quickly propel your career.
What Defines a Luxury Home?
When it comes to luxury homes, there are many different parameters that establish what exactly constitutes “luxurious.” Even more various (and confusing) are the definitions that qualify a luxury home.
To keep it simple, we will use Rocket Mortgage’s definition:
A luxury home is one that is valued within the top 10 percent of properties on the local market.
That being said, there are many other considerations that lead to this definition.
How Much Can I Make Selling Luxury Homes?
According to Indeed.com, the average experienced real estate agent makes around $83,000 per year. However, an agent who helps families buy and sell luxury homes can make almost that much in one transaction.
Imagine doing 10 transactions like that a year. Earning over half a million dollars a year ain’t too shabby, especially when considering you’re dealing with a wealthy client who’s financially able to use your services again for making more home purchases, sales, and investments.
How Do Homes Become Luxurious?
Where a luxury home is located is directly correlated to its price. For instance, a home located in New York City will have a higher asking price than a home situated around Denver. That’s pretty obvious. However, our definition of luxurious deals with being in the top 10 percent of homes in the area, not overall.
Homes that successfully capitalize on what the area provides usually leads to this upper echelon pricing. Reverting back to our previous example, a home located right smack-dab in the middle of Midtown New York City, on the highest floor, will garner the highest interest in the area. The same goes for a suburban home with a mountain view located just outside Denver.
2) Square Footage
If anyone tells you size doesn’t matter, they’re lying. Homes with more space usually provide more bedrooms, bathrooms, and overall living space for the family and their guests. Of course, this changes by location. Big cities usually mean lesser, more expensive spaces. Country retreats call for a larger space and a nearly-limitless outdoor space filled with exotic animals.
3) Building Materials
What’s the point of building a mansion if you don’t construct it with the best materials known to man? We’re talking Italian stone marble countertops, golden staircases, and Oxford Antracita floor tilings.
The majority of luxury homes use the best materials around. In exchange, it leads to much higher resale value and demand for the home.
4) Unique Design
Whether it’s a medieval castle or a Georgian mansion, the uniqueness of the home’s design is very important to the luxury home definition. Every luxury home has its own shape and form that distinguishes it from the rest. This uniqueness creates more value for the homeowner. Attach a famous architect’s name to the home and you’ll see the price skyrocket.
What would a luxury home be if it didn’t have at least two massive theaters for watching movies? We’re actually not joking. Having amenities like multiple theaters, tennis courts, and indoor rock climbing walls are what the wealthy desire when purchasing these homes. It’s these decadent and totally-out-there amenities that differentiate one luxury home from the next and attract the richest buyers.
This feature is most important for celebrities trying to escape the paparazzi. They’re looking for high-walled gated security, thick foliage coverage, and pretty much anything you can think of to block the limelight from shining their way. This sort of privacy cannot be easily found and thus can increase the home’s value tremendously.
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