Wednesday, March 15, 2006

So just who is buying these days?

Ever wonder just who is buying these days? Well, here is the answer..

From the Star Ledger:

Ask the Biz Brain

I'd like to help my son, age 25, buy his first house. He has not been working long enough to have established decent credit and probably could not get a mortgage on his own. Would it be wiser for me to co-sign for a mortgage with him, or take out a mortgage myself and have him pay me "rent" and eventually sell the house to him. My house in nearly paid for.

I'm speechless. Why does a 25 year old with no job, no credit, and likely no money need to purchase a house? The answer is, he doesn't. The idea of it is just short of pure insanity.

Garutti suggests if the son has not yet established a credit record, it raises concerns about whether he would be able to pay the mortgage each and every month. Are the parents ready to step in and pay off the loan if that happens?
...
If you do go ahead with the purchase, Larry Marks, a tax partner with Shipman, Sosensky Randich & Marks in Farmington, Conn., suggests the father guarantee the loan, or alternatively, co-sign the loan.

That way the son would have the opportunity to build up his credit while affording the father the benefits from a tax standpoint, Marks said. Having the son pay the father rent would not afford any tax benefits, Marks noted.

Caveat Emptor!
Grim

23 Comments:

Blogger skep-tic said...

the only friends of mine who bought in the last year had serious help from their parents. they bought an $800k 1 BR in Manhattan. OK size, sh*tty layout, great location. Oh, and by the way, both the son and the father work in real estate. talk about putting all of your eggs in one basket

3/15/2006 11:28:00 AM  
Anonymous trroll said...

skep-tic,

You are not alone. Friend of mine sold their winter home (Hunter, NY) last year and bought a condo in Manhattan for $500K+ - sh*tty size, layout and location. And now are warring they will not get their money back - they expected the condos to keep going up - also they put about $50K in repairs. I was a really bad move - especially that I really loved to use their winter home for last 4 years. :)

3/15/2006 12:03:00 PM  
Anonymous mlt said...

So just who is buying these days? I'm not! I was hoping to, within the next 6 months,--in Morris Cty--,but after looking at homes there in my range of 350-380K...I know I will not get my money's worth (if even my money has that worth--another topic). After reading this very informative blog, I have decided to wait and save more money in hope that RE prices will come down. Also after a 1st experience with applying for a mortgage...I need to learn more so as not to get burnt..Thank you for an extremely helpful site.

3/15/2006 12:36:00 PM  
Blogger Richard said...

i'm in an unenviable position. live in a 2 bedroom condo with my stay at home wife and 4 month old son. wife absolutely despises the town (south orange). actively looking for places in decent towns in morris, union and essex but the prices are just laughable. if i stay, i'll probably be killed in my sleep. if i leave, i'll have to buy in a market i know is way overpriced and probably be stuck for many years down the road. renting is not an option either of us want to pursue as we've been doing that for too many years and feel we have to settle down now with a child. wife is from queens, ny and needs (and i mean need) to be around NYC types.

all my friends out there, pray tell what's one to do?

3/15/2006 01:31:00 PM  
Blogger skep-tic said...

richard,

try to convince your wife of the advantages of renting. you will live in a far nicer place if you rent. at the end of the day, isn't that your goal?

whatever you decide, good luck.

3/15/2006 01:36:00 PM  
Blogger pesche22 said...

now whats wrong with s.orange?

people will kill to live their

3/15/2006 01:46:00 PM  
Blogger grim said...

Richard,

Everyone's situation is different, and there isn't one answer for everyone. But if you are going to buy soon. Please, at least strip emotion out of the deal and approach it from a purely financial standpoint.

Why is renting in a town that you both like not an option?

grim

3/15/2006 02:01:00 PM  
Blogger Richard said...

the wife hates south orange because the village is dirty and half the stores are boarded up plus there's a sketchy element of people in that area. enough said.

on the rent side, does anyone know where decent rental complexes exist in the nicer towns? i can't seem to find many. thanks.

3/15/2006 02:54:00 PM  
Blogger grim said...

What towns are you interested in?

jb

3/15/2006 03:59:00 PM  
Blogger Grim Ghost said...

Edgewater, North Bergen etc. have a whole lot of fairly new rental complexes along River Road. Good facilities, good commute to NYC, view (sometimes). Edgewater is a good town.

Middlesex county has lots of rental complexes, most rather old.

3/15/2006 04:15:00 PM  
Anonymous Anonymous said...

richard,
we rented a gorgeous two bedroom townhome at 96 New England Ave in summit for three years. It was walking distance to town and your wife will be able to stroll your child in to town, get lunch, meet up with other moms in local parks and start a life here while you look around and get familiar with the area. Drive buy the complex to see if you might be interested and there is a sign in front with the property managers number. We were so happy there that we took our time buying our first house and could be extremely picky. They units have full basements and the bedrooms are huge! The complex is full of young families.

I would suggest waiting to buy if you possibly can. The home prices here are ridiculous and the entry market will soften!

Good Luck!

3/15/2006 06:53:00 PM  
Anonymous Anonymous said...

oops forgot to tell you the complex in Summit is called Berkshire Gardens, run by Tom Daneke. They are affiliated with the Grand Summit Hotel.

3/15/2006 07:10:00 PM  
Anonymous Anonymous said...

This Kid has not earned the right to own a house. It's called sacrifice. A long forgotten thing these days.

3/15/2006 08:06:00 PM  
Anonymous Anonymous said...

Richard

I am kind of in the same boat - want to buy but feel it is the worst time. I bought in 89 and had to walk away without anything in 97... just got my credit score uo to 720 after all these years and oldest son is starting high school in the fall... I am in a Great rental - no so great area. If we are getting a house want to have while my son is still young enough to enjoy it and need to be established where ever we are going by the fall.

3/15/2006 08:57:00 PM  
Anonymous Anonymous said...

Richard, your first mistake was marrying a demanding bitch from Queens. Your second was moving to scumhole South Orange. You should listen to Tom Lykus. Time for you to grow a shaft, and tell your woman that you're the bread winner, and this is how it's gonna be... like the Third Eye Blind song. I dated a super hot Polish blond from Wallington... I mean Polington... she thought it was the best... I said, lets get married and move to a nice place like Hunterdon or Bucks county... I ended up dumping her and moving out of state altogether... best thing I ever did. Now I got a hot American blonde who puts out every night. Richard, you seem like a nice guy... you just need to get your sack back, and be a leader for your family... moving to Madison, or Basking Ridge, would be much better for y'all, and only 20minutes further from that hole known as Queens.

3/16/2006 11:10:00 AM  
Anonymous Michelle said...

Well, Anon 11:10, I for one am sure glad you moved out of state. Please stay there.

3/16/2006 12:17:00 PM  
Anonymous Anonymous said...

Michelle: Your posts are just as annoying. In fact, yours are worse. Now you know how it feels.

3/17/2006 08:43:00 AM  
Anonymous trroll said...

Anon 11:10 PM

You are in denial. You remind me one of those “machos” with overgrown ego and even bigger insecurity issues. I wonder what nationality you are – but on the other hand even here (the US) we still got plenty of Darwin’s “missing links”. Grow up and as Michelle said – stay there – where ever THERE is. I’m sure it’s wonderful place for you to be.

3/17/2006 11:46:00 AM  
Anonymous Anonymous said...

Some racist undertones there in your posting "trroll". Not cool at all. Try to remember this blog is about real estate, and keep your racist opinions to yourself. Many thanks.

3/17/2006 12:42:00 PM  
Anonymous trroll said...

anon 12:42 PM,

I’m sorry if you got offended. No racism was intended on my part (though I’m surprised you found a hint of racism in my post but did not get windfall in anon’s). What I meant was there are people that consider women to be an object not a person – a property if you wish. I was raised and taught to have deep respect for women – as well other people in general – and do not consider myself to be a racist in a senses it’s mostly look at. But I’m a racist when it comes to stupidity, arrogance and simple lack of common sense.

But once again I apologize if my posting has offended you.

3/17/2006 01:25:00 PM  
Anonymous Anonymous said...

i am with you Michelle!

3/19/2006 09:41:00 AM  
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