May 18, 2017

Right time, wrong questions

MAY 18, 2017

Since starting The Cardinal's Nest in 2010, pretty much every conversation I have or overhear (yes, I'm listening!) can inspire me to write a blog....I type in my head while you talk, people. Today's story (a combination of characters, rolled into one couple) is no exception.

A lunch date with my self-employed artist friend, Bella, revolved around the question of whether she and her husband Bo should buy a house. She really wants to take the next step; her family is growing and so is the business that she runs out of her apartment. Life is increasingly getting crowded and, last time I checked, kids don't take up less space as they get older. #fact

The real estate conversations between Bella and Bo, however, were going nowhere. After a few questions of my own, the reason why became infinitely clear: 

They were asking the wrong questions.

While your financial preparation toward buying a home is crucial (save, pay off debt, and repeat) there are a few things that need to be sorted out first.

TIMING: In this story, it turns out Bella has less than a year to give birth to her 2nd baby...her PHD. But with life getting in the way, the expense of school, a brief, and unexpected health emergency (everyone is fine) Bella needed to ask the question of whether or not she wanted to continue on the last arduous stretch if her studies, and how long, exactly, that would take. Buying a new home at this moment might not be as practical as she had hoped - all energy and funds need to go toward getting that crisp piece of paper with PHD at the end of her name....and then, a job.

LOCATION: Bo, on the other hand, has a secure, flexible job. It's not, however, in a city where Bella can be employed to her maximum earning potential, or where they can afford a house, quite frankly. (I'll let you guess which city they might have to leave). Bo can work anywhere in the country at a high level, Bella can't, so location is the second question they need to consider, along with: How long will it take for Bo to secure a position in a city that also has employment potential for Bella? Right now, we're looking at a minimum of 9 -10 months before we start their real estate journey. We can prepare, get our ducks in line, but we need to wait to act.

EMOTIONS: Bella is comfortable with the idea of taking the next financial step to homeownership, as well as furthering her career. They are a win/win combo in her eyes. Bo, however, is not fond of risk, especially when the added element of moving away from his family is a part of the equation.

SACRIFICE: Something has to give, it always does. If they don't choose a new location, Bella may not be able to live out her full career potential. If she fulfils her dream, he may have to move away from his parents and siblings. This, understandably, is the hardest question to face, and is often the one that keeps people on hold the longest. Once answered, however, it's full speed ahead.

I certainly have my opinions on the situation but, the only opinions that matter are those of Bella and Bo. Their friends and family will not be paying their mortgage, mowing their lawn, or building their careers. The answers must come from the heart, not just their wallet, or the peanut gallery. 

We can certainly look at their current numbers and point them in the right direction, but until they figure out the timing, location, emotions, and ultimately, who will have to sacrifice what, their file will be put on pause.

What questions do YOU need to ask yourself? 

• Do I want/need to go back to school/training?
• How long will that take?
• How will that affect me financially? 
• Am I in the right city?
• Do I need to re-locate?
• Can I afford to buy/work in that location?
• Can I still live in a rental, but buy a small rental property to get the real estate ball rolling?
• How will my spouse/partner contribute/influence my decisions/location/schooling?
• What can I give up? 
• What can't I do without?
• Do I want to have a family?
• When do I want to start a family? 
• Do I have debt?
• Do I have savings?
• Has my income been steady for two years in a row, on paper?
• Do I have any unaddressed financial issues that need to be eliminated?
• Do I have any unaddressed emotional roadblocks that might interfere with the questions listed above?
• Am I basing my decisions on facts or assumptions?

There are no right or wrong answers, and there are certainly moatre questions to add to this list, but before you talk money (I know some peeps) you need to clean up your emotional house before you get the keys to the one that you will eventually buy. You'll thank yourself (and ME!!) in the end. 

Bella and Bo, let's get to work! 

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