- Step 1 - Determine a comfortable payment range
- Step 2 - Determine the real need for the purchase.
- Step 3 - Keep an open mind
Today, I share step 4 with you which is:
Take time to build a team of professionals around you who can help you profit in all areas of your financial realm.
The year 2006, I was working for a large mortgage company. I began to sense a strange phenomena in the housing arena but at the time, I could not truly identify what the issue was. Middle managers were being laid off, and some of my former customers were calling concerned about their financial future. I began to have problems getting my loans to the closing table. Some of my perspective buyers were losing their jobs before they were able to close on the home. It was a daunting mystery to me as I had never been through this type of market. I sought the counsel of industry professionals and not one person could accurately define what was to come.
By 2007, the picture was clear, Home buyers were defaulting on their mortgage payments in record numbers. Many were losing their jobs and home values began to depreciate. We were facing one of the toughest housing economy since the great depression.
In 2008, as the market continued to worsen, I found out I was pregnant. I have an auto immune disease and the pregnancy was tough ( our son who was born perfectly healthy in 2009). After he was born, I was having a tough time getting my strength back and adjusting to all that motherhood brings and made the tough decision to leave my job. I did not want to completely leave the business and so I spent my days advising people on how to prevent being foreclosed on by the bank. This was a volunteer position with no pay which allowed me to rest when needed I estimate that between the years 2009-2012, I helped a few hundred people who were facing foreclosure. Some were not able to be helped while others went on to not only survive but thrive.
Looking back on that experience I can clearly see that those home owners who made it through all had one thing in common. They had taken the time to build a team of professionals around them who were able to help them get through their crisis before the crisis occurred.
Today, I want to give you a glimpse of what your team should look like and to also explain ways in which the team members are able to help when buying a home.
Here are the members of the team:
- CPA - A good CPA is worth gold to a home buyer or home seller. There are many tax tricks which can be utilized the year a home is purchased or sold. Not all accountants are alike in this knowledge, so make sure you take the time to interview the accountant before hiring him/her for a job. A good CPA is also a valuable asset should you decide down the road you want to pursue a dream of opening a business, or should you find yourself in a spot where you can no longer afford your home or business, a CPA is can offer advise on ways to mitigate the tax ramifications.
- Financial Planner - A good financial planner will advise you on both a retirement savings strategy as well as a savings strategy that will allow you to have access to some of your funds tax free. During the crisis, I helped homeowners who were facing huge losses of income. The only savings they had were in the form of a 401k. This lead to additional losses when they had to access the funds to live on as they had to pay taxes and penalties. A 401k is a very valuable asset, especially if the employer is matching the funds but it cannot be the only means of savings. A good financial planner can help you with a savings plan that will adversely affect your lifestyle. In addition, a financial planner can help answer questions that may come up in your family and can offer advise additional products such as term life insurance and a will. Both a will and term life insurance are essentials when taking on a long term debt.
- Real Estate Agent - Not all real estate agents are created alike. Some specialize in investor homes, some deal primarily with listings and some only work with buyers. It is essential for you to have a professional real estate agent on your team. I have way too many stories to share on nightmare transactions where a real estate agent is not involved. Take the time to interview a real estate agent and make sure you feel comfortable with their real estate knowledge. Representation from the real estate agent is more than showing you a home and writing a contract. That person must be knowledgeable about issues you could face along the way and be able to negotiate a solution. A good real estate agent is also a huge asset should you face a financial crisis down the road. He/ She will can help with a strategy to mitigate the loss by either renting the home out or helping to sell the home. .
- Mortgage Professional - A good mortgage professional will help you with a mortgage strategy that works for you and will encourage you against buying the maximum you can afford. This will help to avoid potential issues down the road with affordability and will help you be a more profitable home buyer. A good mortgage professional should also know where to direct you should you fall on hard times. It is also wise for you to get an approval from an underwriter prior to going under contract for a property.
- Home Inspector - A good home inspector is such a key player to your team because a good home inspector will be able to identify any potential money pits and will help you identify any issues that need to dealt with during the due diligence period. A good home inspector will also help you identify any property issues the lender inspection may require which will help you identify whether you need to negotiate repairs with the seller and/or finance some of the improvements on the mortgage.
- General Contractor - A good general contractor is a must to have on your team. Even if you buy a new construction home or a home with little improvement requirements, it is still wise to add a general contractor to your team. A good general contractor can help you with a strategy for future improvements, can help in the event of a natural disaster and is also a great asset to your home value. This is because a good general contractor can help you formulate a plan for repairs that will add value rather than take away.
- Pest Inspector - A good pest inspector will not only help identify termite issues but will also help you identify any potential other popular inherited pests when you purchase a home. Pests such as ants, roaches, fleas, mice, squirrels, bats, etc. Need I say anymore about how much a good pest inspector will add to your team?
- Insurance Agent - A good insurance agent will not only write an insurance for your new home but will also be an advocate for you. This person should be your go to for advice in the event you need to make a claim or have questions regarding your policy. In addition, a good insurance agent will help you maintain proper coverage should you embark on home renovations or choose to rent the home at a later date.
The best time to build your team is before you look for a property. The professionals you choose to hire to represent you should have your best interest at heart, not just for the present time but for the future as well.