How two families got creative with their home buying
Wendi Holst, Six Degrees Team Realtor, shares about two millennial families who found their way to homeownership through a creative buying idea: co-ownership.
Millennials make up 43% of home buyers – the most of any generation – an increase from 37% last year, according to the National Association of Realtors.
This statistic reveals that millennials are buying homes, now more than ever before. That said, home prices in the greater Seattle area are high, inventory has been historically low and as of late, mortgage rates are on the rise. How are 23-38 year-olds buying homes in this competitive market?
“My clients dreamt of being homeowners but couldn’t see a way of making it happen for a very long time, if ever,” Wendi said. “Then a couple they knew well approached them about an idea – what if their families bought a house together?”
Although unconventional, the two families came to Wendi with this idea. Co-ownership checked all the boxes for both families – they could own a home now, they could afford more by combining resources, and they could share the mortgage and expenses.
Wendi was quickly tasked with finding a home that met the needs of both families – a young couple and a family with two children under the age of 3. She showed them homes with separate living spaces such as an ADU (accessory dwelling unit). Ultimately they bought a two-story home with shared living spaces but with bedrooms on opposite sides of the home.
They share the mortgage and have a plan that works for them to split the homeownership costs.
“Buying together and committing to sharing a home for 3-5 years allows both families to earn equity so that they could split the profit when they sell. Then, they will both have a downpayment on a home for each of their families in the future,” Wendi said.
The road to homeownership doesn’t have to be a one-size-fits-all path. There are organizations that offer assistance for some first-time home buyers such as Parkview Services. Or, like Wendi’s clients, getting creative and trying co-ownership.
“It worked out wonderfully and both families are very happy,” she said.
If you are a millennial considering a co-ownership purchase with a friend or family member, Wendi has some tips to consider:
- Make sure you have full confidence in the person(s) you are buying a home with before you start the process.
- Be transparent with one another about the state of your finances.
- Be clear on what each of you needs in a home – make a “house wishlist” and share it with one another, then plan to be FLEXIBLE with that list.
- Make sure you create a plan for how you will share expenses and don’t forget things such as utilities, insurance, and unexpected maintenance. Consider putting this plan into a binding contract that both parties sign.
- Make sure you understand each other’s long-term goals, such as how long you each plan to live there. For example, will one party stay, will you both move, or will you keep the property as a rental?
- Talk about what would happen if one of you wants to move earlier than the agreed-upon time.
Millennials buying a home in today’s housing climate is definitely possible but sometimes can take some creativity. If you would like to learn more about how we work with our buyers or would like to see what homes are available in your desired neighborhood, click here to reach out to Wendi Holst.