What kind of buyer are you?

What kind of neighborhood do you want to live in? One where there are baby carriages, everywhere? One where there are no baby carriages? Why?

Look at Boston. In the South End, ten years ago, you’d have been hard-pressed to see more than one baby carriage a day. Now, there are two or three carriages, everywhere you look.

You still won’t see too many baby carriages, in the Back Bay. In the outer boroughs, such as Roslindale and Hyde Park, you may see baby carriages, here and there, but not a lot in one place, at one time.

For some, baby carriages mean “safety”. For others, they mean “family-friendly”. For others, they mean “community”.

Similarly, buyers sometimes use the “Starbucks criteria”. They won’t move into a neighborhood unless there’s at least one Starbucks, within walking distance.

What kind of buyer are you?

Many people who want to become first-time homebuyers lack the down payment, credit history, or income to make such a purchase a reality.

So, some young people decide to buy a condo or home, with a friend.

This solves the problem of coming up with the money to buy, but it also can create a huge number of problems, for the new co-owners.

The Wall Street Journal Online recently discussed the topic:

Buying a home is risky — in part because it’s a large investment that can take a lot of time and expense to sell. And in an arrangement where two individuals are linked by nothing more than a deed and a mortgage, the risks and complications are heightened.

Say your co-owner gets a job transfer to another state. Do you sell the home? Do you buy your partner out or bring in a new co-owner? And what if you don’t even like a prospective replacement housemate?

If you’re the one who decides to move on, meanwhile, getting your cash out of the deal may be more complicated than if you owned a home on your own and immediately put it up for sale.

How to deal with this? Well, it goes without saying, one word: plan ahead.

Lawyers can protect your interests, as well as those of your friend(s).

Although it may sound cold, “You need an exit strategy,” one attorney warns.

Complete story: Tips for Purchasing a House With a Pal to Save on Rent - By Diana Ransom, The Wall Street Journal Online

Looking to buy a home, but not sure, or unable to come up with the necessary down payment?

A “lease option” may be just the thing for you.

Bob Bruss from Inman News discussed it in a column, recently:

WHAT IS A LEASE-OPTION? A real estate lease of a house, condominium or commercial property, which gives the tenant the option to buy the property, offers both the tenant and landlord many advantages. Much like a new car lease, the renter has the choice of buying the property or not by the end of the lease term.

However, a lease-option is not the same as a lease-purchase. With a lease-purchase, the contract requires the tenant to buy the property, usually within a year or two. But a lease-option doesn’t force the tenant to buy.

Lease-options work especially well when the local market has either an oversupply of house and condo rentals and/or an oversupply of houses and condos listed for sale.

Why? Because you rent the house for a year or two, and, only then, if you like where you are, will you decide to buy (at the pre-determined price). You’ve already put money into the property, so you’ve built equity, while bringing the purchase price lower.

However, if you find that you can get a comparable home to the one you’re in, but for less money, you can just walk away, and buy the other house. (And, don’t forget, renters get a tax deduction on their Massachusetts state income tax return.)

Of course, an attorney should be consulted, in order to make sure your interests are protected.

Are you thinking of buying your first house or condominium?

Here’s 8 signs you’re ready to buy, courtesy of Kiplinger.com (more details at their site):

You are ready to buy when …

No. 1: You have a budget — and you know how to use it
No. 2: You have a sizeable down payment
No. 3: You have a reliable source of income
No. 4: You have an emergency savings fund
No. 5: You have your debts under control
No. 6: Your credit report is in good shape
No. 7: You can make a long-term commitment
No. 8: You are prepared to become your own landlord

All things to consider, before taking the plunge!