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CPAs’ top tips for assisting first-time home buyers

Written on Apr 24, 2024
CPAs’ top tips for assisting first-time home buyers

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Homeownership is a quintessential American dream. With or without the skyrocketing interest rates on home loans, CPAs can position themselves to help first-time home buyers achieve this substantial, long-term decision.

Buying a home is the most significant expense in most people’s lives. Home buyers also need a cushion for unexpected housing expenses and taxes.

How can you, the knowledgeable CPA, help first-time homeowners realize the American dream? Set your career trajectory on assisting home buyers with financial planning and innovative strategies. Below are tips to share with clients looking to buy a home. (You may have your own tips to add to the list.)

Find a knowledgeable accountant

From taxes to insurance, buying a home is all about being money-smart. And who better to aid the hopeful buyer than someone with a lot of time and energy invested in the ins and outs of all things finance-related?

CPAs can help buyers save on taxes, capitalize on deductions, and prepare themselves for the inevitable costs at tax time. They’ll assist with planning for such an expense, especially during high-interest rates.

Additionally, they’ll ensure homeowners don’t have their blinders on after hearing how much they have been pre-approved for by the lender. On average, lenders approve amounts three times a buyer’s annual income. Just because the buyer can get approved for a certain amount doesn’t mean they should. Homeowners must consider their lifestyles and financial and retirement goals.

CPAs, explain your value in the home buying process to potential buyers. Educate them on what they could be missing out on without you.

Wait before making substantial changes

Spending carries momentum. That’s why you’ll typically see people plan a “shopping day” or “shopping spree”—it’s easy to keep on spending. Parting with such a large sum of money on such a big-ticket item often has homebuyers in the mindset to keep buying things for the house.

Homeowners should wait before putting a lot of money into improvements, though. While sprucing up the home or adding their unique personality is tempting, they must save first. After a while, they’ll better understand how their new monthly expenses look when the new mortgage, utilities and taxes add up.

And let’s not forget costly repairs. They likely weren’t accustomed to how expensive these could be under a landlord or property manager.

Obtain necessary insurance

Buyers can’t obtain a loan without homeowner’s insurance. However, homeowners might not know the importance of two other insurance types: life and disability income. Both types protect those who live in the home during worst-case scenarios when the person responsible for paying the mortgage no longer can.

Develop a relationship with the neighbors

Neighbors can make or break a homeowner’s dreams. The easy route to friendly neighbors is to strive for amicable relationships with them. The best way to do this is for the homeowner to introduce themselves and say hello if the neighbors don’t do so first.

Neighbors can be a wealth of information about the house, neighborhood and surrounding area. For instance, they can recommend the best handyworkers, contractors, or home remodelers. They might know pertinent information about the house’s construction, upgrades or improvements. This knowledge can save the homeowner time and money.

Find a home improvement go-to

Buyers should find a trusted handyworker or contractor to have on speed dial for times when they can’t handle a project on their own. With any luck, their neighbors can help them find several to choose from.

File receipts, warranties and manuals

Homeowners should create files to store all home repair-related receipts, appliance or home warranty information and user manuals. Even better, they should keep digital backup copies (pulled from supplier websites or scanned/photographed and saved to their computer).

Receipts can help their CPA assist them at tax time or during the sale. Plus, the buyer will know right where to look should anything happen to their big-ticket items.

Kickstart your real estate accounting career

A CPA license opens many doors of opportunity. You could specialize in real estate accounting and assist aspiring homeowners with preparing for the biggest ticket item of their lifetime. There are a lot of ins and outs of home buying many first-timers can overlook.

Accountants should seriously consider earning their CPA license to build their careers. In addition to keeping up with accounting CPE classes, they can subscribe to accounting membership organizations. Professional accounting organizations help their members prepare for the CPA exam, specialize in areas of interest (like real estate) and connect with other accounting professionals to boost career opportunities.

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