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Six things to discuss before buying a home with your parents

Multigenerational homes are increasing in popularity in the U.S. According to the Pew Research Center, as of 2016, 64 million people live in multigenerational homes, as opposed to 32.2 million in 1950. A multigenerational home is defined as a home where at least two adult generations live, or homes that include both grandchildren and grandparents.

Some of the shift is due to the growing diversity of the population. Americans born elsewhere are more likely to live in these types of households. Other factors contributing to the shift are increasing home prices and the growing costs of long-term care for older Americans.

Buying a home is a complex and often frustrating process. Before you consider buying a home with your parents, you should think through and discuss all that will be involved.

Discuss must-haves with both sides

When most people shop for a home, they have an idea of certain features they may consider must-haves, particularly if it is not their first home purchase. However, having a long list of desired features will make house shopping harder. Before you begin your search, talk with your parents about things they consider deal breakers for the purchase of a home. Both sides will need to be somewhat flexible in the search, but knowing what everyone wants beforehand should make the process go smoother.

Talk about sharing the house hunting

One person doing all the house hunting may be overwhelming. Sit down with your parents ahead of time and discuss how you will divide home searching duties. Perhaps you can try to go see some houses together, or maybe each one of you can actively look for homes. Just try to avoid a situation where one person does the hunting, and everyone else just rejects the homes they do not like.

Before you move in together, declutter

Whenever people move in together, there are usually some redundancies in household items. You probably are not going to need three blenders, five sofas and two dining room tables. If your parents are moving out of a home they have lived in for some time, they have likely accumulated a lot of possessions. Discuss going through old boxes, and getting rid of things before you buy a home together.

Decide whether you want a move-in ready home or want to renovate

Some mother-in-law suites are simply not as polished as others. You may want to consider talking to a realtor that specializes in multigenerational homes. He or she can advise you on the best areas to look, and whether you can find a home that works for your family, or if renovating will be easier. If you do decide to renovate, consider issues like soundproofing to provide privacy to both your family and your parents.

For renovations, consider zoning restrictions

If you are dividing a single-family home into a two-family home, you will likely need to get approval from the city to rezone your home. Perhaps you are thinking about building a separate home on the site of another property, this too will likely be regulated by the city. You may also have to make other changes to the property to make sure you are up to code for such renovations.

Consider the taxes and other money implications

Many older Americans do not want to have a mortgage or rent payment. Discuss how you will divide up the purchase price and the mortgage payment. Having to pay extra taxes because you did not think the process through could hurt both your family and your parents. You may want to consider contacting an attorney that understands the complexities of real estate transactions, particularly for aging parents. An attorney can examine your unique situation and help you decide what is best for both sides.

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