Zillow recently began airing a “Homeowner Mates” commercial. It depicts three women moving into a house together.
It shows their individual ‘buying power’ followed by your ‘buying power’, the latter of which combines the purchasing power of the three.
The three women have individual purchasing power of $117,000, $124,000, and $131,000, but their total is $372,000 when combined.
This obviously allows them to start buying a home worth around $400,000, even though they’re not getting anywhere close on their own.
While having co-borrowers does boost your purchasing power, the question is is it a good idea when it’s a friend (or two)?
It’s hard enough to buy a house on your own
When I first saw this commercialI was very surprised. It seemed a bit irresponsible, and has a lot to do with the current housing market being unaffordable for most people.
To me, this doesn’t mean forcing you to buy. This could mean postponing your goal of home ownership, saving more money, or perhaps hoping for a raise, or generally getting all of your money in a row.
Oh, and maybe lower your maximum purchase price to something you can actually afford!
Instead, Zillow offers a solution To find a couple of close friends and buy a house today.
It largely ignores what happens after the dust settles and the moving boxes are unloaded.
It’s not even about what happens when one of the roommates wants to move out. He also seems to ignore who gets what room, or what happens if one of the co-owners loses his job.
simply, It offers a very simplified view of homeownershipwithout giving us the full picture, which can get very dark quickly.
After all, it’s hard to be a homeowner without having to discuss everything that might happen with a couple of other people.
It’s a big decision between buying versus renting, and it becomes exponentially more complicated once you multiply that by three people.
Homes are too expensive for many Americans right now
To make matters worse, this commercial only exists because homeownership has fallen financially beyond the reach of many Americans.
The people behind the ad obviously got together and said what are the main pain points that potential homebuyers are facing right now?
They probably all agreed that buying a home is too expensive for most people, thanks to a combination of high home prices and high mortgage rates.
But instead of realizing this, they found a creative solution to deal with the affordability issue, regardless of the likely outcome.
Ironically, the ad says, “This is the time when buying a home became real.” When the three women pooled their income together to make it work.
Unfortunately, they probably don’t know how TRUE It will be after living together and paying the mortgage for a year.
It’s hard to rent with a friend without running into all sorts of pitfalls. Buying a house with a friend and doing so successfully seems like the ultimate feat of all feats.
In other words, things probably won’t go well for most people. And how do you know who will get what if someone wants out?
This all sounds very complicated, but it’s coupled with the three women eating pizza and joking about one of them breaking the other’s vase.
I guess that will be an afterthought once the real problems rear their ugly head.
Maybe this is not the right time to buy a house…
As I wrote in my other article, marriage and mortgage should not be confused, it is perfectly fine to rent at first, especially if your wedding date and housing market conditions don’t quite align.
The same is true here: you don’t have to rush into a purchase, and you don’t need to force it if it doesn’t feel right. Or simply no pencil.
Although I am a huge advocate of homeownership and believe it brings with it a lot of positives, it is not for everyone. It’s also not always the right time.
Personally, I wouldn’t buy property with friends, and maybe even with family when it comes down to it.
Take the time to really think about it if you are considering it. What will owning a home with your friend(s) look like a year from now, three years from now, or five years from now? Will you sell it at some point or will you rent it?
You’ll need a serious plan if you expect to achieve something like this. Even those who have recently purchased a home on their own are feeling the heat.
Now imagine several people dealing with conflicting emotions at the same time. It’s not for the faint of heart.
Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My work experience in the early 2000s inspired me to start writing about mortgages 18 years ago to help potential (and current) homebuyers better navigate the home loan process. Follow me on Twitter for hot takes.
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