Recently, Zillow began running an ad called “Homeowner Mates.” It shows three women living together in a house.
It shows their individual “BuyAbility” followed by “Your Purchases,” the latter of which includes the purchasing power of all three of you.
These three women have individual purchasing power of $117,000, $124,000, and $131,000, but a combined $372,000.
This apparently allows them to get into that nearly $400,000 home purchase, despite not being alone.
Although having co-borrowers with you strengthens your purchasing power, the question is whether it’s a good idea if a friend (or two)?
It’s Hard to Buy a Home on Your Own
When I first saw this sale, I was very surprised. It seems somewhat careless, and has a lot to do with the current housing market being unaffordable for many.
To me, that doesn’t mean forcing your way into shopping. It might mean giving up on your goal of becoming a homeowner, saving more money, maybe hoping for a raise, and generally getting all your ducks in a row.
Oh, and maybe lower your purchase price to something you can afford!
Instead, Zillow presents a the solution just find a few close friends and buy a house today.
It’s almost impossible to ignore what happens after the dust settles and the moving boxes are released.
It doesn’t go into what happens if one of the roommates wants to move out. It also seems unclear who gets which room, or what happens if one of the owners loses their job.
Simply put, it presents a very simple idea of owning a homewithout giving us the whole picture, which can quickly become very dark.
After all, it’s hard enough being a homeowner without having to discuss everything going on with two other people.
It’s a big decision to buy versus rent, and it’s a lot more complicated when you multiply that by three people.
Homes Are Too Expensive For Many Americans Right Now
What makes it all worse is that this trade-off only exists because home ownership has fallen financially out of reach for most Americans.
It is clear that the people who inspired this ad got together and said what are the main pain points for prospective home buyers right now?
And almost all agreed that it is too expensive for most to buy a home due to a combination of high home prices and high mortgage rates.
But instead of realizing this, they find a creative way to deal with a piece of affordability, regardless of the outcome.
Ironically, the seller says, “That’s when buying a home became a reality.” When these three women pool their money together to make it work.
Sadly, they probably don’t know how the original it will be after you have lived together and paid the mortgage for a year.
It’s hard enough to rent with a friend without facing all kinds of pitfalls. Buying a home with a friend and doing so successfully sounds like a job for all abilities.
In other words, it probably won’t go well for most. And how do you find out who gets what when someone wants out?
All of this sounds complicated, but it boils down to three women eating pizza and joking about one of them breaking the other’s plate.
I think that would be the thinking behind the real problems rearing their ugly head.
Maybe It’s Not the Right Time to Buy a Home…
As I wrote in another piece of mine, Marriage and Mortgages May Not Mix, it’s best to rent early, especially if your wedding date and housing market conditions don’t exactly match.
It’s the same here. There’s no need to rush into a purchase, and you don’t need to force the issue if it doesn’t feel right. Even if he doesn’t put a pencil.
While I am a big proponent of home ownership and believe it brings many benefits, it is not for everyone. And it’s not the right time.
I personally have never bought real estate with friends, and maybe even family when it comes down to it.
Take some time to think this through. What will it look like to have a home with your child(ren) a year from now, three years from now, or five? Will you sell it at some point or rent it out?
You’re going to need a solid plan if you expect to pull off something like this. Even those who have just bought a house on their own are feeling the heat.
Now imagine several people experiencing conflicting emotions at the same time. It is not for the faint of heart.
Before creating this site, I worked as an account manager for a real estate broker in Los Angeles. My experiences in the early 2000s inspired me to start writing about mortgages 18 years ago to help prospective (and existing) home buyers better navigate the mortgage process. Follow me on Twitter for the latest.
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