Buying home under the influence

I was showing a new client into my office the other day when she remarked on how lovely and off-the-beaten-path it was, and then asked how I found it. I related how I had first come into the area to look at an office across the way that was up a steep, long flight of stairs, but I decided against it, "because so many of my clients' down payments are provided by their parents, so I wanted to be sure I had a ground-floor office that their parents can get into!"

That got me to thinking -- my clients' parents had a pretty major impact on my choice of office location, but they often play an even more significant role in their adult children's real estate transactions -- sometimes intentionally, other times totally unwittingly.

The younger the client, the more significant and transparent their parents' impact on their real estate deals and decisions tends to be. I mean, I've had parents call up to ask questions at various points in the transaction to make sure their baby was being treated correctly (mostly because they didn't trust their grown-up kid to choose a good Realtor on their own). But more often, I've had parents call up after closing or approach me at my client's housewarming to hug and thank me for treating their baby right.

It's not at all uncommon for me to run into parents when their children -- from 20 to 40 -- insist that Mom or Dad has to green-light the house before they can make an offer or remove contingencies. Sometimes this seems slightly pathological, as with older clients who are suffering from a clear desperation for parental approval or even a paralysis to make a decision or move forward without it. Other times, it seems quite healthy or even optimal, as with a current client, whose aesthetic tastes are so in sync with her Mom's that when she likes a property but has concerns about how livable the floor plan, say, might be, her Mom steps in as the go-to gal for suggestions and ideas about how a given home might be made to work with my buyer's life.

Similarly, with very young clients for whom home buying is their real first effort to fly beyond the nest, a parent's approval or quiet, background participation in the process can be the supportive nudge that allows the buyer to make decisions boldly and with ease, (mostly) free from overwhelm and anxiety.

And when the parent is gifting, loaning or co-signing to make the transaction happen, well, in the words of my own dear, not-so-old Dad, "He who has the money makes the rules." So, when these parents get involved in the deal, it seems sensible; I encourage their questions, so they can feel comfortable with the transaction and, hopefully, have no drama in the years after closing. I'm constantly surprised, though, by how many of the parents who are giving big-time down-payment gifts just exercise their generosity and then step back, trusting that their adult kid will exercise wisdom and make the right decisions. Perhaps because of that trust level, their kids generally do.

Now, active involvement or authority in an actual transaction is not the only way I've seen parents' influence rear its head -- ugly or otherwise. Maybe it's just the faux shrink I think I am, but I very frequently see my clients' relationships with money and financial habits reflect the influence of their parents, and many of my buyers and sellers are very aware of it. Sometimes they track expenses, meticulously balance their checkbooks, save their money and even choose to buy a much more affordable home than they could afford because that's what their parents did; other times they do it because their parents' money behaviors were so chaotic and out of control. And even with sellers, you can often trace the mortgage and home maintenance recordkeeping, property tax payment habits and equity stewardship back to a parental inspiration. ...CONTINUED

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