Your realtor is your #1 financial adviser

I highly recommend hiring professional financial help. But even if you do, there is someone else who affects your financial life more and that's your realtor. Think about it, bad advice from a realtor can set you up for 30 plus years of financial stress. I recently wrote my Indy Star column about this very topic.

"Realtors help people make the largest purchase most of them will ever face — and take-on more debt than they will ever take on again. I don’t know about you, but to me, those two factors alone make the Realtor the most important financial adviser a person can have." - courtesy of the Indy Star

A great realtor will tell you the truth. Even when you aren't receptive to it. Here are some truths a good realtor will be sure to make you aware of:

1) "Some properties don’t appreciate in value and may actually decrease in value, even during normal market conditions. This is a tough pill to swallow for a new home buyer, particularly an excited new home buyer." courtesy of the Indy Star

We talk about waiting for the right house at the right time, so there must be a wrong house at the wrong time. Don't rush into buying a home.

2) "Unfortunately, home affordability is not determined by whether or not a financial institution is willing to loan you money. In my opinion, the online housing affordability calculators are the most damaging financial calculators on the market today. Loan approval is never confirmation that a purchase is objectively affordable." courtesy of the Indy Star

Your housing costs per month should not exceed 25% of your income, and I'm not talking about your projected income, I mean your current take home pay. I also believe that you should be able to put down 10 percent of the value of the home. My theory is that if you can't save up that 10 percent (and no this should NOT come from your emergency fund) you aren't going to be able to budget for of all the other expenses associated with owning a home. What realtor is going to tell you you are overbuying? A really good realtor.

3) "There is a bad time to buy a home. This has nothing to do with real estate as an investment. In fact, unless you’re willing to sell your home at the drop of a hat, then it’s not an investment. Calling something an investment often justifies poor decisions." courtesy of the Indy Star

The bottom line is this: find a good realtor. The truth may hurt and it may delay your plans or get you less house than you think you "deserve" but it will save you from years of financial hardship.

Read my full article here.