The Home Ownership Thread

[otc]

Anyone have anything to say about joint-ownership/joint mortgages? Particularily when buying from a relative?

My grandparents have a cottage on Lake Michigan that's been on the market for a few years. It was priced too high and its not the kind of place you would be buying if you were looking for a summer home mid- or post-recession (its a classic old cottage and guest house, but the lot is not ideal to bulldoze and put up a McLakehouse which has happened to all of the nearby plots that sold). Unfortunately, they keep dropping the price and it is going to sell eventually--probably this year. Basically, my grandparents now live on the east coast and are *old* (to the point where it really prevents their enjoyment of the property)...they are done with it, don't want to have anything to do with it, and want their pile of cash.

Nobody wants to see it go away but neither my parents, nor my aunt's family can buy it outright. I can't afford it myself either, but there has been some discussion of a joint purchase. Are there any clever ways to structure this in a mutually beneficial way? My grandpa is curmudgeonly and wants cash; I don't think he'd be happy with a payment plan of some sort, so a bank is going to have to be involved. If there's a real mortgage on the property with joint ownership, what happens to things like taxes? Can I still take interest deductions? What about the first time homebuyer credit for me (no, I wouldn't actually live there full-time, but I don't own any other property and I could go and get a Michigan driver's license if necessary).

Or is this the kind of thing where you just run away? It has strong sentimental value, but the fact that it is still on the market indicates that it is overpriced (don't know what the family discount would really be).

 

[VLSI]



What about the first time homebuyer credit for me

This doesn't exist any more does it? The house doesn't sound like a great deal or someone would have bought it, and if it's not a great deal and you guys clearly don't need it, I don't see a reason to just buy it on a whim (sentimental or not). Can't really be of help to you in regards to the rest.

 

[otc]



This doesn't exist any more does it? The house doesn't sound like a great deal or someone would have bought it, and if it's not a great deal and you guys clearly don't need it, I don't see a reason to just buy it on a whim (sentimental or not). Can't really be of help to you in regards to the rest.

Well, it is a vacation home so need doesn't really factor into the equation. Not really a whim either, this has been an ongoing discussion since they announced they might want to sell it...I'm just in a place now where I would be perfectly comfortable carrying some of the mortgage.

There has been at least one offer at a higher price that had the financing fall through and its probably priced at least 25% lower than that now. They've fired their real estate agent so there's a period where they can't sell without paying a commission to the old guy but there's a currently interested party.

Would be particularly beneficial to me for this to stay in the family as I only live an hour or two drive away (meaning weekend beach trips with friends/ladies) while my dad and his sister are both more like 7-8 hours, only get up there a couple of times a year, and are mostly motivated by sentiment.

 

[Piobaire]

Otc, get the interested parties together and spend $500 on a meeting with a really good real estate attorney. You know how much I tend to hate lawyers but a good one can really save you a crap ton of woes in many situations...and this is one of them.

 

[Ataturk]

Obviously that's good advice, better than this suggestion, but you could always just drop by your bank and talk to someone who sells mortgages. Might save you some time with the lawyer (and time is money).

Personally, I'd never do it, but that's just me. Lots of reasons. One is that I think (I don't really know) that being obligated on that mortgage could make it hard to buy your own house in the future.

 

[aravenel]



Otc, get the interested parties together and spend $500 on a meeting with a really good real estate attorney. You know how much I tend to hate lawyers but a good one can really save you a crap ton of woes in many situations...and this is one of them.

Definitely this. We have a family lakehouse that is similar. Owned by a corporation, in which we own X%, which I'd imagine that many such properties are. I'm sure the approaches vary from state to state as well, so double the reason to talk to an attorney.

Sounds like a great place. I love old cottages like that. I don't understand why people want these huge McMansions in a summer lake home. Give me a drafty cabin in the woods on the lake, and I'm a happy man.

 

[otc]



Sounds like a great place. I love old cottages like that. I don't understand why people want these huge McMansions in a summer lake home. Give me a drafty cabin in the woods on the lake, and I'm a happy man.

Yeah, that's exactly what it is and it is part of why it hasn't sold yet. It has its own strip of beach but the cottage itself is set back in the woods and you can't see the lake through the trees (though it has a cantilevered deck overlooking an awesome ravine). The people who have had the money to buy vacation property in the past few years aren't looking for that...they want a plot of land where they can put a big white house that's got 2-3 stories, central air, and can be seen from the water.

I think that's starting to change as the economy recovers though...people who would be interested in a cute old cottage are out looking again. The last sale I am aware of in the community didn't get torn down...the couple's father is doing a bunch of renovation/upkeep work on it, but the cottage itself is staying put.

 

[aravenel]



Yeah, that's exactly what it is and it is part of why it hasn't sold yet. It has its own strip of beach but the cottage itself is set back in the woods and you can't see the lake through the trees (though it has a cantilevered deck overlooking an awesome ravine). The people who have had the money to buy vacation property in the past few years aren't looking for that...they want a plot of land where they can put a big white house that's got 2-3 stories, central air, and can be seen from the water.

I think that's starting to change as the economy recovers though...people who would be interested in a cute old cottage are out looking again. The last sale I am aware of in the community didn't get torn down...the couple's father is doing a bunch of renovation/upkeep work on it, but the cottage itself is staying put.

Yeah, that's like exactly what I want. Good news is, hopefully I will be able to afford a place like that in the mountains in a few years, given that everyone else seems to want the nasty cookie cutter McMansions

 

[otc]



Yeah, that's like exactly what I want. Good news is, hopefully I will be able to afford a place like that in the mountains in a few years, given that everyone else seems to want the nasty cookie cutter McMansions

This is the most egregious example in the community.

Bing says the picture is from 2013 so the place is wrapped up for the winter...but even without the shutters, it looks really out of place. Its hard to tell in the photos, but its actually on a decent sized hill. I can't imagine how you plop a 3 story building down on a sand dune and expect it to stay put if the water levels ever rise back to what they have been in years past. Most of the places around it are twice as far back/up the hill. A bit up the beach where the hill isn't so high, the cottages that are the same distance from the water show clear signs of erosion...

edit: our families place is somewhere in the top of this photo:

You can see our sunfish wrapped up in a blue tarp in the dune grass.

 

[aravenel]



This is the most egregious example in the community.

Spoiler: Warning: Spoiler!

Bing says the picture is from 2013 so the place is wrapped up for the winter...but even without the shutters, it looks really out of place. Its hard to tell in the photos, but its actually on a decent sized hill. I can't imagine how you plop a 3 story building down on a sand dune and expect it to stay put if the water levels ever rise back to what they have been in years past. Most of the places around it are twice as far back/up the hill. A bit up the beach where the hill isn't so high, the cottages that are the same distance from the water show clear signs of erosion...

edit: our families place is somewhere in the top of this photo:

You can see our sunfish wrapped up in a blue tarp in the dune grass.

Yeah, that's ridiculous.

Our place looks much like yours. Quiet little cottage back in the woods on the lake. The good news is that at our place, most of the shore is national forest or owned by the power company, so there's not much development. There has been a bit of buying and tearing down over the last few years and it's gotten many more day-trippers, but it hasn't gotten nuts.

I grew up in Charlotte, and the lakes around there are absurd--every house is an 8,000 sq ft gaudy new-money monstrosity put up by some Nascar driver or something. I can't stand the lakes around Charlotte for that reason.

 

[Ataturk]

As if I needed another reason to hate the government...should have bought R22 instead of gold.

 

[VLSI]

Pool maintenance. DIY or pay a service?

Also should be closing on my first place shortly

 

[SkinnyGoomba]

Drywall preppin'

 

[The Dentist]

Pool maintenance. DIY or pay a service?

Also should be closing on my first place shortly

That's usually the duty of your gardener or butler. But I'm assuming you don't have a butler so gardener it would be!

 

[SkinnyGoomba]

Painting. I'm not sure if I enjoy more the process or the fact that I'm covering up 'ugly'.