Today my co-worker informed me of a dilemma he was facing in which he had to decide by tomorrow whether or not he wanted to buy a townhouse (worth around $600K). The townhouse was owned by his future sister-in-law who had just purchased a new house. Due to some sort of tax implications (I didn't get all the details) she has to put her house on the market tomorrow or sell the house to him and his fiancee. If my co-worker and his fiancee decide to purchase the house directly, they would save the commission ($36K).
I directed him to Bankrate, since they have a lot of good calculators on how much house you can afford. After punching in the numbers, he told me that he cannot afford the house without help. I will get an update later this week on his final decision.
As we were talking about this, we talked about how many people we know end up getting help from parents for the down payment. I'm not sure if this phenomenon just occurs frequently in the Bay Area, or if this is what always happens in middle-upper-middle class families . Are these people getting the help spoiled or lucky?
Wednesday, May 10, 2006
Quick decisions about buying a house
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I had parental help to buy my very modest house. I could have done it without help, but I would have had to live with things like a nonfunctioning boiler for a lot longer if there was no help.
I feel both lucky and spoiled. Depends on the day. It has strengthened my desire to be financially secure on my own--to save, invest, work, budget so I can do what I want without help, and so I can return the favor and help my parents if they should need it.
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