Other Key Advisors
A home's price is directly related to its physical condition. Homes in top shape sell for top dollar. Fixer-uppers sell at greatly reduced prices because whoever buys them must spend money on repairs to get them back into pristine condition.
You can't know how much work a house may need just by looking at it. You can't see whether the roof leaks, the electrical system is shockingly defective, the plumbing is shot, the furnace's heat exchanger is cracked, the chimney is loose, or termites are feasting on the woodwork. Invisible defects like these cost major money to repair.
Because you don't want to inadvertently become the owner of a home with such expensive hidden problems, you need property inspectors on your team. None of the other players on your team are qualified to advise you about a house's physical condition or the cost of necessary corrective work.
Finding financial and tax advisors
If you want to hire a financial or tax advisor, interview several before you select one. Check with your agent, banker, lawyer, business associates, and friends for referrals. As is the case with selecting your agent, you should get client references from each tax advisor and call the references.
Here are the qualities to look for in a good financial or tax advisor:
Does the advisor work full time in this occupation? The realm of personal finances and taxes is too vast for you to trust a part-timer. You need the services of a full-time professional.
Does the advisor speak your language? Good advisors can explain your options in simple terms. If you don't understand exactly what the tax advisor is saying, ask for clarification. If you still don't understand, get another tax advisor.
Is the advisor objective? Hire someone who works solely by the hour and doesn't have a vested interest in the advice that they give you. Never blindly follow the advice of experts because you're in awe of their expertise.
What is the advisor's fee schedule? Hourly fees vary widely. Don't pick someone strictly on a cost-per-hour basis. Furthermore, the quality of the seasoned veteran's advice may be superior to the quality of the novice's advice.
Is the tax advisor a Certified Public Accountant (CPA) or Enrolled Agent (EA)? These professional designations indicate that the tax advisor has satisfied special education and experience requirements and has passed a rigorous licensing exam. A CPA does general accounting and prepares tax returns. An EA focuses specifically on taxation.
Does the tax advisor have experience with real estate transactions? Tax practice, like law or medicine, is an extremely broad field. You need a tax advisor whose clients have tax problems like yours.