Timing a Luxury Buy Right Can Mean Big Savings

BY ANNE MACHALINKSI See the Mansion Global Article

ORIGINALLY PUBLISHED ON JULY 15, 2016|MANSION GLOBAL|

Real estate agents and developers have long known the importance of timing when it comes to listing and selling a property. But buyers and investors can also benefit from making smart decisions when it comes to timing their purchases, leading to big savings or extra customization, depending on their goals.

Eric Lavey, director of The Agency’s estate division, helped a client take advantage of timing when they locked down a $7 million-plus Hollywood Hills, Los Angeles, property over the Fourth of July weekend. After the house hit the market right before the holiday, the client, an all-cash buyer in town from the U.K., saw the property and loved it. Knowing that another potential buyer had also seen the property before heading off on vacation, Mr. Lavey recommended that his client move quickly when her competition was away. This plan worked, and they were able to swoop in and get the property at almost 10 percent below asking price.

In addition to making a deal when others are out of town, buyers can also use timing to their advantage by getting in before peak buying season to check out inventory before it comes to market (these are often called “whisper listings”) or waiting until after the main season has passed to pick up what’s left at a discount, says Edward de Mallet Morgan, a partner on Knight Frank’s international residential team.

Of course, a lot depends on your personal needs from a property.

“If you’re looking to live in it, you probably want to do it sooner rather than later,” he says. “But if it’s an investment, you can wait, follow the market a bit, track properties through the season and pick your moment.”

For year-round homes, that means checking out properties before the spring push or waiting until November or December, characteristically slow months, to see what’s left.

And in the case of summer vacation properties, looking in the late-fall—before the December to March peak season—or waiting until summer to pick up what’s left. The only catch? If interested buyers wait too long to enter the market, the current owners will likely rent out the property for the peak holiday season, making it impossible for buyers to see available properties or to close a deal until they’re vacant in the fall.

A final way buyers can use timing to their advantage is to get in early on a new development, says Jonathan Miller, president and CEO of Miller Samuel Real Estate Appraisers. In Manhattan, that’s meant a sometimes steep discount in a development’s early days, like a $5 million price tag on a unit that’s listed at $7 million two years later, once construction is complete.

David Martin, the president and co-founder of Terra, a Miami-based real estate development firm, agrees that the discounted price is a perk of getting in early, but more importantly, these first buyers have the pick of whatever unit they want, and the ability to customize layout and flow. In his recent building, Grove at Grand Bay in Miami, for example, he had 77 custom floor plans out of 98 units.

“Everybody has a different way of living,” Mr. Martin says. “What happens is that the earlier you buy, the more flexibility and opportunity you have to design something unique, that is tailored exactly to your lifestyle.