Posted by Kathy and Lauren Gordon on Thursday, April 21st, 2016 at 12:49pm.

  What a lovely family! They don’t look like they are discussing buying a home, yet!

Here’s the thing.  Living in Toronto specifically Etobicoke we have heard from the media and friends about certain home transactions going into bidding wars and selling for “over asking”. As of late this has become a marketing strategy by most agents. They list your home with an aggressive  price in hopes of exciting many buyers to the offer table. The ones that excite are fetching higher than average results for the market. Low inventory , low-interest rates and immigration all add to the increasing prices.

You might ask “Well where does the money come from?” Hopefuly the Bank but there is the down payment and closing costs which may bring us to The Bank of Mom and Dad! Here’s the two perspectives you need to empathize with before you make the decision to jump into the game. For Mom and Dad, most of us felt our fiscal responsibility was ending after graduation. 

For the children and there is a usually more than one inheritance likely in this scenario. They want it to be a fair and equal for all parties involved. Siblings may be a hindrance. The home buyer sibling needs capital either for down payment, deposit or both. The other siblings would like to be assured that there will be equal compensation. And that is just the family issue.

The Lawyers and Tax accountants have their own issues on what may be the best way for you to buy a home for your child (children)! Assisting in the form of a Gift, providing funds in a loan repayment strategy or moving into the basement are all ways that are with or without merit. This depends on all parties circumstances.

I have gathered many more in depth articles that will help you make a more knowledgeable decision or make for a better debate should you be faced with this decision. 

Rob Carrick from the Globe and Mail offers insights with Financial concerns about Lawyers, Wills, Probates, and Gifting. If these don’t wake you up what happens if unfortunately the newlyweds divorce? That’s being negative though. It would be a lovely gesture as a Gift though!

An American publication provides a guide with many different scenarios that would make for a great debate.  Your adult children may be texting while you are trying to point out what might happen. This article, you may just want to email to them.’Examples of Typical Issues for Parents Buying Homes for Children’ makes sense whether you are American or Canadian. Family is Family! 

The Financial Posts Garry Marr poses the scary question, Is helping children buy their first home becoming ‘the next parental responsibility’? I especially enjoyed the mother who helped her son out with the purchase of a home and then later when he maximized his equity into trouble. Her advisor told her ‘if you don’t help your son get financially independent, he’ll be coming to you in his 40s.’She started crying,(taking some literary license) He’s 43!

CTV offers up an Associated Press article. One idea is for the parents to match their adult child’s efforts in coming up with the down payment. They also surveyed a loan company that finds that of the 68% who helped out with the down stroke 24% further helped out with the closing costs. OUCH!

Finally , cause I feel too much information is not helping anyone here, let’s say What if Mom and Dad do not agree on what is best for you kids.Moneysense.ca Romana King queries ” If Mom and Dad are divorced and Mom says no and Dad says yes. Mom doesn’t want to be the bad guy but she makes some valid points. Strapping the adult kids at a young age to mortgage payments and lines of credit creates fewer choices for them when it comes to living. 

In summary, there is no quick answer to this modern day dilemma. Getting money from the Bank of Mom and Dad is almost as hard as buying a home in today’s market.

And anyways there your kids, who knows them better than you. Oh and just to be partial if you are the adult Kids try crying, it still works!

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