(NewsNation) — The cost of buying a home is higher than ever; hitting an average of $397,954 in June, according to Redfin.
That is a 4.9% increase on the previous year. The majority of Americans (54%) say they cannot afford a down payment and closing fees, per a survey by Bankrate.
Now, some are turning to a new method; buying property with their friends. Real estate expert Brendon DeSimone told “Morning In America” that there are many risks associated, and the right friend is essential to success.
Compatibility with regard to steady employment, desire to be in the area, as well as having a contract are all necessary for a positive outcome, according to DeSimone.
“Before you buy with somebody else, you need to have an agreement in place,” DeSimone said. “One contract in place which spells out how long you’ll live there, what happens if somebody needs to sell? Do you buy the other one out?
“It can become very contentious down the road. You have to have an agreement in place before you purchase.”
For those unwilling to go into business with friends, DeSimone says there are other alternatives available.
“There’s FHA loans, there’s 3% down payments, there’s VA loans. There’s lots of programs these days for lower down payments. The problem is, rates are so much higher these days; double what they were just a couple of years ago.
“So, you’ve really got to speak to a mortgage broker or talk to your bank and find out what options you have available.”