Buying with a friend?

Buying with a friend?


Whether buying a residential or investment property with a friend, encourage your clients (and you as well) to consider talking about these questions and their answers with your friend BEFORE buying. Why? Before is easier than after even when such conversations can be difficult and before is cheaper both financially and emotionally than after.

According to the National Association of REALTORS® (NAR), buying properties together among friends and unmarried partners is a growing segment of the housing market. NAR indicates that 15% of all Millennial buyers are in unmarried, friend relationships/partnerships and 8% of ALL buyers are in unmarried, friend relationships/partnerships.

That this segment of the market is growing makes sense…most first-time buyers simply cannot afford a down payment on a home and/or a home mortgage on their own. In the last decade alone, according to the New York Times, median home prices have increased +27.5% and home prices are predicted to increase at twice the rate of inflation and wage growth.

Here are some questions and conversation topics to discuss BEFORE buying residential and/or investment property with a friend/partner.

  1. How will you divide ownership and equity? Who will hold the mortgage and title?
    1. Sometimes, friends/partners have significantly different incomes.
      1. Will you divide your financial responsibilities evenly in a co-ownership arrangement?
      2. Will you split the costs based upon your different income ratios?
      3. Will one person pay for the entire down payment?
      4. Will one person loan the other person(s) half of or a portion of the down payment?
    2. How will you handle repairs, upgrades and labor?
      1. This question/conversation involves some of the same elements as #1.
        1. Who pays, how much does each pay, etc. based upon, perhaps, different incomes?
        2. When one friend/partner does the labor, does that person get reimbursed for time, materials, etc.?
      2. This question/conversation also involves aesthetic considerations. Who decides on paint colors and/or decorations?
      3. This question/conversation also involves how long family members and/or houseguests are welcome?
    3. What happens when one person dies or if the relationship or friendship ends?
      1. Decide BEFORE the purchase who inherits the dead person’s portion of the property in the deed, will or written agreement.
      2. Once friends/partners begin to co-mingle funds and share assets, a court/judge can regard the friends/partners being in a common law domestic partnership regardless of a co-ownership agreement. You must check specific state laws on this point.
    4. How formal/informal do you want your co-ownership agreement to be?
      1. Some people want an informal, verbal, hand written agreement that all parties sign.
      2. Some want to work with a mediator.
      3. Some people want a formal agreement where each party hires their own attorney, similar to a prenuptial agreement
        1. Tiffany Elkins, an Oregon lawyer specializing in real estate litigation, told the New York Times,If you don’t do it right and you have to clean it up later (after you buy), you’re spending ten times the amount of money that you would have spent if you’d hired an attorney before you purchased.”
        2. Frederick Hertz, a lawyer and mediator specializing in creating housing agreements, told the New York Times,“The difference is that the rules of relationships are dramatically different if you’re married or unmarried…if you fail to have a legally binding agreement, the law will impose a very different set of rules.”

Thanks to


Posted on July 18, 2019 at 10:46 pm
Kevin MacInness | Category: Uncategorized

Gen Z Says “Not So Fast” to iBuyers

Who would have thought that nine out of ten digitally native Gen Z homebuyers would prefer to work with a real estate agent rather than an iBuyer when ready to purchase a home? Certainly not David Mele, president of His company recently surveyed more than 1,000 young adults ages 18 to 24-years-old on their buyer preferences.

“These results were a surprise,” said Mele. “Gen-Zers have never known a world without digital connectivity, have all the information at their fingertips and they are saying that the quality of a real estate agent and their ability to understand what they want are more important…” than technical tools.

Such results fly in the face of assumptions that young adults will buy homes with technically powered services or go it along. This demographic group points to specific agent qualities as being most important:

  • 1% – understanding what I want
  • 1% – expertise about the local market
  • 1% – excellent negotiating skills

Another surprising statistic from this study indicates that 86% of Gen-Zers want to own a home before turning 35 years old rather than being foot loose and fancy free as a mobile nomad.

Gen-Zers see the top barriers to home homeownership as being making enough money to buy a home (42%), saving enough to make a down payment (21%) and student loan debt (20%). The vast majority of Gen-Zers (64%) believe they will have to pay 11% or more of the purchase price of a home as a down payment while 25% anticipate having to save for a down payment of 20%.

According to Mele, the average first-time buyer puts down 6%-7% and the average down payment across all buyers equals 5.3% of the purchase price.

Thanks to News from

Posted on July 13, 2019 at 7:07 pm
Kevin MacInness | Category: Uncategorized

Smaller utility bills come with these improvements

Do you and/or your clients want to have smaller utility bills?

First thing, according to a recent article in CNBC, do a home energy assessment to actually know what is and what is not working most efficiently in your house. A home energy assessment costs approximately $100 but such an assessment could save you some 20% – 35% in energy usage, assuming you make the improvements the assessment may indicate.

According to the former acting deputy assistant secretary for energy efficiency with the Office of Energy Efficiency and Renewable Energy under the US Department of Energy, consumers can save an average of $105 – $627 annually. The Energy Department says that consumers will not only save money in the long term, their house will be more comfortable and the air quality in their house will be healthier.

The Energy Department suggests the following:

  1. Temperature control: Make sure the HVAC system in the house is appropriate to and for the house.
    1. If the HVAC system is too large, the AC pumps too much cold air into the house, which could lead to too much moisture, condensation and mold.
    2. Those living in colder climates ought to have proper insulation installed throughout the house, including the attic.
    3. Seal up any leakage in the HVAC ducts and crawl spaces.
  2. Lighting:
    1. Switch to LED lighting.
    2. Efficiency can be increased by 85% with LED lighting.
  3. Appliance upgrades:
    1. Look for Energy Star labels for any and all appliance upgrades
    2. Go to the Energy Star website for additional information.
  4. Water heater
    1. Check the age and functionality of the current water heater.
    2. A new water heater could provide 3-4 times more efficiency.
  5. Check out the website DSIRE to search for policies and incentives provided for energy efficiency by state.

Thanks to Tim and Julie Harris at


Posted on July 5, 2019 at 5:54 pm
Kevin MacInness | Category: Uncategorized

Declining Mortgage Rates

Declining mortgage rates are currently leading to spikes in refinance loans. During the week of June 7, 2019, the Market Composite Index jumped a staggering 26.8%.

CNBC put together a list of specifics on mortgage activities during mid-May. Take a look:

  • The Refinance Index spike +47% from the week of June 1 to June 7, 2019.
  • The refinance share of mortgage activity increased to a whopping 49.8% from a week earlier when that index was 42.2%.
  • The seasonally adjusted Purchase Index increased +10% from the week before, June 1 to June 7.
  • The adjustable rate mortgage sector of mortgage activity increased to 7.9% of total mortgage applications.
  • The share of FHA mortgage applications fell from 9.5% to 8.9% of all mortgage activity.

Thanks to

Posted on June 27, 2019 at 8:54 pm
Kevin MacInness | Category: Uncategorized

Some variables affecting mortgage rates

Some variables affecting mortgage rates

Lenders consider several items when pricing your interest rate. Here are some of the more important ones:

Credit score.   The higher your score, the less risk you pose to a lender, so you’ll receive lower rates. FHA guidelines won’t allow a loan with a credit score below 580. 760 and above gets the best rate.

Down payment.   20% down eliminates private mortgage insurance (PMI).

Property location.    This can affect rates. Is the property in an appreciating area or depreciating area? Is it too close to commercial properties? A highway?

Loan amount/closing costs.  If you ask a lender to roll your closing costs and other borrowing fees into your loan, your rate may increase.

Loan type. The type of mortgage you choose, Fixed or Adjustable Rate Mortgage (ARM), will have a different rate. Surprisingly, an ARM starts at a lower rate, but in the long term, those rates could increase.

The lender you choose.    Different lenders may have different rates, however, not all lenders are created equal. Sometimes the lowest interest rate may not necessarily be the best lender. Get references. Choose wisely.

Premier Mortgage Group Boulder CO

Posted on June 19, 2019 at 6:35 pm
Kevin MacInness | Category: Uncategorized

Homeowners benefit by refinancing as rates drop

Homeowners benefit by refinancing as rates drop.

According to Diana Olick of CNBC, there are more than 5.9M homeowners who could see their rates drop by at least 75 basis points by refinancing.

Black Knight, a mortgage software and analytics company, indicated to Olick that more than 2M people in just the last month could take advantage of refinancing and drop their rates. Just think of it…May 21 of this year had interest rates at 4.23% and now rates are 3.94%.

This 2M people represents the largest group of eligible candidates to benefit by refinancing in nearly 3 years. This 2M people also represents $1.6B in potential monthly savings to the tune of approximately $271/month.

Potential homebuyers could also benefit from these lower interest rates especially since home prices are in a “cooling off” mode. In March 2019, home price appreciation was up +3.8% annually, the “first time growth has fallen below its 24-year average of 3.9% since 2012,” according to Black Knight.

Due to interest rates, affordability is the “best it’s been in a year,” wrote Olick. Monthly payments on an average-priced home are down -6% (with a down payment of 20%) over the past six months.

Ben Graboske, president of Black Knight’s data and analytics division says, “When we factor income into the equation, we see that it takes 22% of a median income to purchase the average-priced house, not the more usual 25% that may be difficult for buyers with excessive non-mortgage debt.”

Thanks to Tim and Julie Harris 6/12/2019


Posted on June 13, 2019 at 11:29 pm
Kevin MacInness | Category: Uncategorized

Home Renovation Myths

There are some myths when it comes to renovating your home. Today we’re breaking those down so that you can avoid catastrophe.

A common misconception of home renovations is that you can simply add the cost of renovations to your home price tag. While this would make all sellers happy, this is simply not true. Some renovations you make in your home may merely be an expectation of buyers in the market, therefore if you tell them you’re charging extra for something that should already be there, they’ll probably walk away.

Something that is important to know before you make renovations is this: permits are not optional. Knowing this can save you a lot of stress down the road. If you make renovations without a permit, you could be required to undo all the changes and do it the right way, all the while paying for all of these costs. Additionally, some people believe it is cheaper to DIY, but we can not stress how untrue this is. Unless you’re an experienced professional, you should always hire someone to do the job right so that you aren’t having to retrace your steps and pay for the damages to be repaired.

Lastly, a big misconception is that repairs are cheaper than replacement. In no way is this true as some repairs are temporary fixes which would be cheaper to simply replace. Always talk with a professional as to what actually is a repair as opposed to a replacement.

Thank you to Premier Lending, Boulder, CO May 2019

Posted on June 7, 2019 at 9:26 pm
Kevin MacInness | Category: Uncategorized