3 Critical Mistakes That Churches Make When Purchasing
By Annena Aikins


Purchasing a new sanctuary or building should be an exciting and
empowering experience for any church.  The ability to purchase a
new building represents growth and is a direct manifestation of all
the hard work and prayers.     

Unfortunately, in all the excitement, too many churches make critical
mistakes in the purchasing process resulting in unsuccessful or very
difficult transactions.  To ensure a smooth transition into a new
sanctuary or building avoid these all to common mistakes:

Mistake #1 - Failure to plan. Purchasing a building requires lots of
planning.  There are several logistical, and financial considerations
that need to be covered.  Several questions have to be answered –
What area?  What type of building?  How much to spend?  When is
the right time to purchase?  Does the facility and area allow for
growth?  Does purchasing fit into the overall plan of the church?  
Who is responsible for coordinating these efforts?  Is leadership all
on one accord with purchasing?  How will we fund a purchase?

By not planning, often churches will find themselves in undesirable
situations, like purchasing a building that they subsequently find out
is useless to them because it is not zoned for religious activities.

Mistake #2 -Failure to get pre-qualified.  Many church leaders will
enter into a contract to purchase a building without getting pre-
qualified for a loan.  Essentially, making a commitment to buy without
knowing if you have the ability to do so.  This creates an
uncomfortable predicament for the churches that subsequently find
out that they cannot qualify for the loan that they are seeking.   

To prevent such a situation, always, get an understanding of your
church’s financial position first, before looking for a property.  Start
by following these steps:

1.        Review the budget to see what the church can afford – factor
in the new mortgage payment, and other expenses like utilities,
insurance, and general maintenance.
2.        Decide on a down payment.  Try to retain at least 90 days
worth of liquid assets in reserves after the purchase.  The last thing
that you want to do is completely wipe out the church savings.
3.        Determine how much the church can borrow.  Use this
general formula to calculate the loan amount – “gross annual
income x 3.5 = potential loan amount.”  Lenders will typically lend 3
–4 times the amount of what the church brings in, annually.
4.        Contact a church lender or broker to review your plans to
purchase.  They will verify the amount that the church can borrow
and help the church prepare for the transaction.  

Mistake #3 – Failure to be patient.  It seems like once the decision to
purchase has been made that the church leadership makes a mad
dash to the finish line.  There is a big rush and a sense of urgency
to buy a building.  Many shop for buildings, enter into contracts and
ask questions later.  Often churches will lock themselves into tight
deadlines that create a lot of stress in the purchasing process.

Purchasing a new building is a very detailed process that involves
many steps.  Take the time to make solid and sound decisions.  Be
selective in the building and location, to make sure that is everything
that you want.  

Avoid these mistakes when leading your congregation through the
process of purchasing a new building.  Try to take as much time as
needed to work through the process in an orderly manner.  This will
improve your chances of have a smooth and problem free purchase.

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Copyright 2008, Annena Aikins. All rights reserved.
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