When to Break Up With Your Financial Advisor

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An important indicator of your overall financial wellness is how well you balance spending with saving and investing. You should always keep the end game (retirement) in view while simultaneously being able to enjoy life while saving for your children’s college education, if applicable. In order to coordinate all of the pieces of your financial puzzle most effectively, many people choose to work with a financial advisor.

Unlike many other professional partnerships you may form, your relationship with your financial advisor or financial planner can become more like a friendship. Because many people stay with the same financial planner for years, you can easily feel connected on more than a professional level. This feeling increases if you are also in the same circle of friends or live in the same town.

No matter how much you enjoy the company of your financial planner, if your needs simply aren’t being met, you have some decisions to make. You’ll either have to explain to your advisor exactly how he’s letting you down and what he can change to retain your business, or you can start looking around for someone new.

Reasons to consider leaving your financial planner:

  • Distrust – Being able to trust your financial advisor with your money is extremely important. If you’re asking questions and not getting answers that feel authentic, that’s a red flag.
  • Poor communication – While it’s true that financial planners are often very busy, if your phone calls and emails go unanswered for lengthy time periods, you’re paying for a service that’s sub-par.
  • Unclear expectations – The best financial advisors will lay out a plan when you first team up with them. The plan should include input from you regarding your specific goals for your assets and what you’d like to see happen. If your advisor never created an investment policy statement for you – it could signal that he’s skimping on his other duties as well.
  • No contract – As with any professional who provides you with a service that you will be paying for, your financial planner should present you with a clear contract at the beginning of your relationship that outlines his duties to you and what he needs from you as well. Without a contract, you have no way of knowing what to expect.
  • Distance – If you’ve been working with a financial advisor from afar and have recently decided to take a more active role in your finances, letting go may be your only option.
  • No fiduciary standard of care – In other words, if your advisor (or his firm) doesn’t put your interests ahead of their own, you have a very good reason for finding a new firm.
  • Fees – If you’re currently unhappy with your advisor’s fee structure and this is set by his firm, you may not be able to get the arrangement you’re looking for without finding someone new.
  • Additional services – Many people today are interested in working with a financial advisor who goes above and beyond making sound investments for them. Tax planning and basic budgeting advice are two services cited by clients who were unhappy with their current financial planning firm.

At Veitengruber Law, we pride ourselves on our vast network of professionals and we attend networking meetings every month to stay immersed in the financial, legal and real estate markets. We are more than happy to assist you in finding the NJ financial advisor that meets your needs. Give us a quick call [(732) 852-7295], or fill out the contact request form on our website. We’re always here to help!

Image credit: Nicolas Raymond

Buying a NJ Foreclosure Property: The Risks

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As we know first-hand here at Veitengruber Law, there are currently an abundance of foreclosed homes in New Jersey. In our practice, we typically represent the homeowner who has been foreclosed upon. Sometimes we help homeowners keep their homes out of foreclosure (foreclosure defense), while other times we walk them through the foreclosure steps (usually combined with a bankruptcy).

The fact that New Jersey has so many properties in foreclosure (although the numbers do appear to be slowing down, albeit very gradually) means that these homes are or will soon be available for purchase at Sheriff’s Sale.

Along with assisting clients who are dealing with foreclosed homes, we also approach things from the other end for those who are interested in purchasing foreclosure properties.

Whether for investment purposes or to simply get a great deal on a future residence, more and more New Jerseyans are realizing the potential that our state’s mass amount of foreclosures represent. For example, a foreclosed NJ property that sold for $1.3 million in 2006 may go for $300,000 at Sheriff’s Sale.* Simply looking at the numbers makes buying a foreclosure property look like a slam dunk.

If everything works out in your favor, buying a foreclosed home certainly can be a fantastic way to get a great house at a fraction of its original market value. With that being said, there are a number of things that you need to be aware of before setting one toe into the foreclosure arena.

The ‘perfect’ house can slip through your fingers at any time. As we work directly with homeowners whose homes are in foreclosure, we can tell you that a homeowner can stop the foreclosure process in the blink of an eye by taking one single action: filing for bankruptcy. If this happens, you may have invested a lot of time and longing into a home that suddenly becomes unavailable.

Even if you buy a home at Sheriff’s Sale auction, make your required down payment (20% of the price you agreed to pay for the home), the original homeowner still has the opportunity to pull off a miracle and decide to keep the home by bringing the mortgage current. They have 10 days following the sale of the home to do so, which is referred to as ‘redemption.’ While redemption is a rarity, you still need to be aware that it is a possibility.

If the original homeowners do not use the redemption period to redeem the home, the IRS has the right to take ownership of any foreclosed properties on which there is an existing federal tax lien. The IRS can take up to 4 months to decide whether or not to redeem a foreclosed property.

Foreclosure properties are sold ‘as-is.’ If you purchase a home at a NJ Sheriff’s Sale, you’ll agree to take ownership of the property without having any opportunity to do a proper walk-through or appraisal.

The unfortunate truth is that owners who couldn’t keep up with their mortgage payments most likely weren’t keeping up with home maintenance or repairs either. There may be significant problems for you to discover only after you’ve signed your name to the property.

Tens of thousands, or even hundreds of thousands of dollars in repairs may be necessary, depending on the size and scope of the home in question.  Whether you plan to rent the home for additional income or live in it, costly repairs will delay both, and could have you actually spending more money than if you’d purchased a non-foreclosure home.

Most importantly, if you still wish to enter into the process of buying a foreclosure property, you need a professional by your side, especially if this is your first experience with foreclosed real estate.

Image credit: Richard Elzey

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