You never want a deal lost, or even stalled, because your clients need to figure out their financials. Use this checklist to help your clients make sure they are financially fit well before the offer stage.

As real estate agents, we help facilitate one of the most important transactions in people’s lives both on an emotional and financial level. To service them best, we need to have a clear snapshot of their finances.

Of course, we cannot predict the future and what will happen, but we can clearly set forth a current financial picture along with expected future expenses. Having this knowledge prepares your clients so they will be ready to move forward when there is an accepted offer. The deal will not be delayed because your clients needs to figure out their finances.

Below is a checklist for you to review with your clients to make sure they are financially fit:

Figure out their monthly fixed costs

That includes mortgage payments, taxes, insurance, tuition bill, insurance, etc. It’s easy to do, just create a spreadsheet listing out all your clients’ monthly expenses, and add them up. There are many websites your clients can find online to help them organize this list as well.

Also, after the transaction, will their fixed cost change? For example, if a family is moving from the suburbs to the city, they might not need as many cars as they are currently leasing. This will reduce their monthly car payments as well as insurance costs.

And are your clients expecting any lifestyle change like becoming empty-nesters, sending a child to school or setting aside money to care for an elderly relative? All of the anticipated events need to be accounted for when assessing your clients’ financials.

Find a go-to financial resource

Have a competent accountant who you can go to with any questions regarding your clients’ income, investments, real estate holdings, etc.

This is especially important now as we are all adjusting to the impact of new tax laws and how they affect your client; 2018 is the first year that the new tax laws will go into effect. State and local taxes (SALT) deductions are now capped at $10,000; previously there was no limit on this amount.

This is significant in highly taxed states such as New York and for those with high incomes. People with incomes of $100,000 and above previously received more than 88 percent of SALT deduction benefits according to

Additionally, there is a new limit on how much one can deduct on mortgage interest — capped at $750,000 of the loan. This can reduce your client’s cash flow as well as liquidity.

Review your clients’ investment portfolio

Are they currently working with a financial adviser? If not, perhaps you could recommend three advisers for your client to interview. (I always like to interview three people for anyone I work with.)

Having an adviser is essential to maintaining a clear financial picture as well as being a valuable resource during the transaction process. You should know your client’s liquidity, whose name is on the title and deed (if a condominium or real property) and other relevant information that pertains to a real estate transaction.

Look into the paperwork

Does your client work with an attorney for family or estate planning as it relates to ownership. Whose name is the property in? Is it a person or a company? Different paperwork and information is needed to complete a real estate transaction. Your client should have all documents readily accessible.

Get them prepared for a mortgage

If your client is getting a mortgage, they need to be prepared to move forward quickly to get a signed contract and then to close on the property.

Again, you are a great resource to recommend a mortgage broker. Sari Rosenberg a senior lending officer, suggests they should have the following information at their fingertips:

  1. Base income and bonus for the past two years
  2. Estimate of cash, cash equivalents and retirement funds
  3. Addresses and phone numbers of employers
  4. Estimate of monthly payments for liabilities and debts

Having an accurate financial picture enables you to focus on getting the most for your clients as either buyers or sellers.

In addition to helping our clients in a real estate transaction, we are a great resource for them to make sure they have the right team of experts that we discussed above.

By fully understanding your client’s financial situation, you are aware of their capabilities, goals and time frame. Information is a valuable resource; fully knowing your client’s financials gives them an advantage in the real estate market.

Marilyn Blume is a licensed real estate salesperson with Warburg Realty in New York. Connect with her on LinkedIn.

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