Going through a real estate purchase and sale process is a great reminder for us of what it is like being the person relying on an expert for a significant financial decision. While realtors and financial advisors have vastly different jobs, there are a couple of ways in which we help our clients deal with similar concerns. In dealing with investments and real estate: knowledge, expertise, and emotions all play significant roles in our decision making.

Knowledge, Expertise, and Sophistication

No amount of scrolling through real estate listings online can make one an expert in real estate pricing and negotiating. Similar to skimming the basic information on public companies, to think because you follow the generalities of the real estate market makes you an expert is to set yourself up for failure or at the very least, an unpleasant surprise. Our clients come to us because they want to know they have a trusted professional who is watching the markets day in and day out and following developments that will directly affect their investment portfolio. The knowledge and measured expertise that goes into managing an investment portfolio is key to making decisions that will impact and reflect into the future.

Similarly, most people opt to use a realtor when they are buying or selling real estate because they want someone who is in tune with the current market conditions and can provide advice on a given property. Notably, they are well versed in how these property transactions normally play out. Given most people only buy and sell a few properties over their entire lifetime, expertise is needed to make sound judgements when evaluating offers and considering all facets of the transaction.

To an extent, one of the most useful components of employing an expert is that they tend to have a sophisticated understanding of their craft. Any realtor worth their salt is probably seeing multiple transactions every single week. They know what warning signs to watch out for, understand how to present offers in the most advantageous way, and can put the context of the overall market to work when evaluating the home you are buying or selling. Similarly, the Kozak Financial Group offers our clients in depth analysis of the capital markets, considerate planning that takes into account all facets of one’s financial situation from taxes to cash management, and boils down all the noise found in the markets to a focused strategy which allows our clients to tune out said noise and be assured they are focusing on the right things.

Emotional distance

Perhaps more importantly than all the above, a financial advisor has the benefit of emotional distance from financial decisions. When markets are down and investors are feeling most nervous is when we can shine for our clients. Treating these opportunities as precious and making sure we take full advantage of them whenever possible. Equally, when markets are flying high and our clients are elated with their investment performance, it is our job to act as a counter weight and take caution. Rather than allowing outsized positions to continue climbing, we must pare them back and be prepared for potential storms ahead in the capital markets.

Similarly, when buying a home, emotions run hot. If you can cast your mind back to the times you have been involved in buying or selling real estate, your emotional state was probably elevated. When putting in an offer, you are making one of the largest financial decisions of your life, you might be nervous about the outcome or anxious about hearing back from the sellers. You might be especially anxious when selling your house after you have already committed to purchasing another, you NEED your house to sell, and that anxiety can make people make poor choices. Again, this is a fantastic opportunity to have an expert who has the emotional distance between themselves and the “deal” who can help to guide you to making the best choice possible.

It is also easy to second guess oneself when it comes to managing finances and real estate. When it comes to real estate you are constantly having to think about what the opposing party is thinking: “Will an offer this low offend the seller?” “Will the results of the home inspection change the mind of my buyers?” Building in emotional distance with the help of an expert makes second guessing easier to combat. For our clients, when they might wonder “is this the right time to buy/sell?” or “Do I have enough to afford retiring?” we can help them to walk through facts and stick to their plan so they come out the other side of their decisions feeling confident in the choices they made.

This is where the comparison between ourselves and real estate professionals comes to an end. Our clients come to us day after day for years on end looking for ongoing advice for a constantly evolving market. With real estate, there is a short heightened period of high emotions and rapid decision making. Over the span of a few weeks, one might buy a home, and then list and sell their own home. While this one time stressful event can seem immense in the moment, and have lasting implications on one’s financial picture, it is over in a proverbial flash. We, on the other hand, work with our clients for a long period, evaluating small ongoing changes in markets and their personal finances, and help them to build a plan that evolves with them as their lifestyles change. This comes with its fair share of high stress events when markets suddenly lurch higher or lower AND includes the day to day fluctuations. Our clients ask us to provide for them an ongoing stream of advice that might never end, and we are prepared to provide it no matter what we find the global economy and capital markets doing.

It can be easy for us to forget that just because we are perpetually examining the markets doesn’t mean our clients are. Taking a step back and putting the shoe on the other foot is a great exercise to participate in now and again. It reaffirms what we know to be true, which is if we continue to do what is in the best interests of our clients day after day and year after year, we will be helping them to succeed financially and feel assured in doing so. Have you encountered a situation in which the shoe was on the other foot for you? What was that like? Did you learn anything? We would love to hear about it, drop us an email at kozakfinancialgroup@cibc.com

Finally, if you find yourself in need of expertise, knowledge, sophistication, or emotional support in dealing with your investments, give us a call. The Kozak Financial Group can be reached at 403-260-0568 and we are happy to provide all of this and more to ensure that you are successful in managing your finances today and into the distant future.