Choosing the Right Advisers

By Joel Persinger
YourRealEstateDude.com

There is an old proverb that says, “Plans fail for lack of counsel, but with many advisers they succeed.” This little bit of wisdom, penned by King Solomon, is quite invaluable. However, problems can arise when we choose the wrong advisers or forget that Solomon wrote “many”, and instead seek advice about everything from only one person.

Not long ago I attended a meeting with some clients who were being served by one of the Realtors in my office. These folks were having some financial difficulties and needed to sell their home for less than what they owed on it. The process is called a, “Short Sale.” We are working on a great many short sales and have developed an expertise in that area. This is precisely why the clients in question had been referred to us.

During our meeting, it became apparent that these folks had done little homework regarding their situation. While we are experts in the field of real estate, we are not experts in the law or regarding taxes. So, my agent and I strongly urged these nice people to speak to an attorney regarding other possible options and an accountant to determine to what degree there would be any tax liability associated with their short sale. They agreed and promptly made appointments with both an attorney and a CPA.

Following their meeting with their attorney they called my agent to tell him of their decision to move forward with the sale. He asked if they had consulted with a tax professional. They replied that they had not, but that they had an appointment with one coming up in a day or so. A few days later my agent followed up. The clients informed him that they would indeed have some tax consequences, but that they were prepared for them. The real problem, they said, was that the CPA had told them that short sales don’t work and that the lender probably won’t accept a short sale anyway. Not surprisingly, we later learned that the CPA had never been involved in a short sale.

So, let’s look at the concept of “many advisers.” It goes back thousands of years to a time when an ancient King ruled a powerful kingdom. Just as with our President today this King, named Solomon, surrounded himself with advisers. Some advised him regarding domestic issues and others on matters of war and relationships with other nations. I’m sure you will agree that he probably didn’t ask his generals how to address the problem of traffic congestion within his cities or defer to his domestic advisers on matters of war. Neither should we ask a CPA for advice regarding the practice of real estate nor a real estate broker to counsel us regarding our taxes.

Each professional has the potential to provide valuable insight upon which you can base well informed decisions, provided they each understand their limitations and confine their advice to what they really know. When they step outside of those boundaries, you may wish to reevaluate your choice of advisers.