In 2007 the housing market was at a fever pitch. There were normal, everyday, people without any real estate experience flipping houses and making a lot of money. They were paying large sums to build large houses hoping to make large returns on their money. They all had witnessed 'coworker’s friends' brothers’ Father in Laws making money without effort. We all know what happened next. The houses stopped selling (The music stopped, and those without a chair, lost).
Housing appraisals take a large part of the value from "comparable" houses that have recently sold in the same area. So if you have a housing bubble inflating all the prices, the appraisals are being inflated too. Well, when the house value goes up, so does the property tax and insurance premiums on that house. AND after the bubble burst, the property tax and home owners insurance premium doesn’t fall with the value right away. Not many people knew that all they had to do was fill out an easy one page questionnaire to request their home’s value be realigned. The Tax commission has to abide by the market values. Now regarding home owner's insurance; if you were insuring a $Million house in 2007, why pay the same premiums to insure the same house now worth $300K in 2008, 2009, 2010, 2011 etc? You can save THOUSANDS of dollars with the right Financial Advisor.
Did your Financial Advisor tell you about any of this, OR is their alleged advice focused only on what generates a fee? Does your Financial Advisor work for a firm that fueled the aforementioned meltdown? 'Saving money' is more than putting the money in an account. Sometimes financial advice should be saving money on expenditures. A dollar saved is as good as a dollar made on any investment.
Steve J. Casull, CEO & Founder