{"id":5986,"date":"2024-10-07T20:08:21","date_gmt":"2024-10-07T20:08:21","guid":{"rendered":"https:\/\/finderica.com\/dont-buy-a-home-with-friends\/"},"modified":"2024-10-07T20:08:21","modified_gmt":"2024-10-07T20:08:21","slug":"dont-buy-a-home-with-friends","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=5986","title":{"rendered":"Don\u2019t Buy a Home with Friends"},"content":{"rendered":"
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Recently, Zillow began airing a commercial called \u201cHomeowner Mates.\u201d It depicts three women moving into a home together.<\/p>\n

It shows their individual \u201cBuyAbility\u201d followed by \u201cYour BuyAbility,\u201d the latter of which combines the purchasing power of all three.<\/p>\n

The three women have individual buying power of $117,000, $124,000, and $131,000, but a combined $372,000 when pooled together.<\/p>\n

This apparently allows them to go in on that near-$400,000 home purchase, despite not being anywhere close on their own.<\/p>\n

While having co-borrowers does indeed boost your purchasing power, the question is it a good idea when it\u2019s a friend (or two)?<\/p>\n

It\u2019s Hard Enough to Buy a Home on Your Own<\/span><\/h2>\n

\"BuyAbility\"<\/p>\n

When I first saw this commercial<\/a>, I was pretty taken aback. It felt somewhat irresponsible, and a lot related to the current housing market being unaffordable for most.<\/p>\n

For me, that doesn\u2019t mean forcing your way into a purchase. It might mean holding off on your homeownership goal, saving up more money, perhaps hoping for a raise, and generally getting all your ducks in a row.<\/p>\n

Oh, and maybe lowering your maximum purchase price to something you can actually afford!<\/p>\n

Instead, Zillow presents a solution<\/em> to just find a couple close friends and buy the house today.<\/p>\n

It pretty much ignores what happens after the dust settles and the moving boxes are unpacked.<\/p>\n

It doesn\u2019t get into what happens when one of the roommates wants to move out. It also seemingly glosses over who gets what room, or what happens if one of the co-owners loses their job.<\/p>\n

Simply put, it presents a very simplistic view of homeownership<\/strong>, without giving us the whole picture, which could get pretty dark in a hurry.<\/p>\n

Ultimately, it\u2019s hard enough to be a homeowner without having to discuss all the what ifs with two other people.<\/p>\n

It\u2019s a big decision to buy vs. rent, and exponentially more complicated once you multiply that by three individuals.<\/p>\n

Homes Are Too Expensive for Many Americans Right Now<\/span><\/h2>\n

Making it all much worse is this commercial only exists because homeownership has fallen financially out of reach for many Americans.<\/p>\n

Clearly the people behind the ad got together and said what are the main pain points for prospective home buyers right now?<\/p>\n

And they likely all agreed that it\u2019s too expensive for most to buy a home thanks to a combination of high home prices and elevated mortgage rates.<\/p>\n

But instead of recognizing this, they found a creative workaround to tackle the affordability piece, regardless of what the outcome might be.<\/p>\n

Ironically, the commercial says, \u201cThat\u2019s when buying a home got real.\u201d When the three women pooled their incomes together to make it work.<\/p>\n

Sadly, they probably don\u2019t know how real<\/em> is will become after living together and paying the mortgage for a year.<\/p>\n

It\u2019s hard enough to rent with a friend without facing all sorts of pitfalls. To buy a home with a friend and do so successfully sounds like the feat of all feats.<\/p>\n

In other words, it probably won\u2019t go well for most. And how do you even work out who gets what if someone wants to move out?<\/p>\n

This all sounds so complex, yet is juxtaposed by the three women eating pizza and joking about one of them breaking the other\u2019s vase.<\/p>\n

My guess is that would be an afterthought once real problems reared their ugly head.<\/p>\n

Maybe It\u2019s Just Not the Right Time to Buy a Home\u2026<\/span><\/h2>\n

As I wrote in my other piece, Marriage and Mortgage May Not Mix, it\u2019s perfectly fine to rent initially, especially if your wedding date and the housing market conditions don\u2019t exactly line up.<\/p>\n

The same is true here. There doesn\u2019t need to be a rush to buy, nor do you need to force the issue if it doesn\u2019t feel quite right. Or simply doesn\u2019t pencil.<\/p>\n

While I am a huge advocate of homeownership and believe it brings with it a lot of positives, it\u2019s not for everyone. Nor is it always the right time.<\/p>\n

I\u2019d personally never buy real estate with friends, and probably not even with family when it came down to it.<\/p>\n

Take the time to really think it through if you\u2019re considering this. What will it look like to own a home with your friend(s) a year from now, three years from now, or five? Will you sell at some point or rent it out?<\/p>\n

You\u2019re going to need a serious plan if you expect to pull something like this off. Even those who purchased a home recently on their own are feeling the heat.<\/p>\n

Now imagine several people dealing with conflicting emotions at the same time. It\u2019s not for the faint of heart.<\/p>\n

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\"Colin<\/div>\n
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Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 18 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on Twitter for hot takes.<\/p>\n<\/div>\n<\/section>\n

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\"Colin<\/div>\n
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