Can we talk about parents buying their adult children luxury homes

[Anonymous]

Anonymous wrote:I trust you are reading the news about the increasing gap between the haves and the have nots? This is what it looks like to build generational wealth.

This. Giving your child money (or property) during your lifetime, when they are trying to build their family and buy a home, is more helpful than them inheriting the same amount when they are 50+ and you die.

As for "luxury" homes, land is a finite resource and, in general, getting in earlier means better returns. I don't know why you would help your kids buy a condo or townhouse if they wanted a detached house and you could afford to help them. Why not put them in their "forever home" from the start? (Obviously if they prefer a condo, that's different.)

[Anonymous]

Anonymous wrote:We do not come from money, like at all. My mom is gambling away any inheritance that I may have received, and my in-laws are absolutely broke. My husband and I are totally self-made and we bought our $900k home in the DMV a year ago at 30 with no help at all. I’m proud of us and I actually feel a bit sad for people who don’t get to see the fruits of their own labor everyday to the extent that we do. I love our life (and home) because we made it happen.

I also bought my own starter home and recent upgrade home, with no parental help. I'm content with my relative good fortune, but I don't really share your pride in it: nobody is totally self-made and everybody has advantages of one kind or another -- in my case, just really good timing. I see the fruits of my labor in lots of things, but not particularly the house.

But my parents could absolutely afford to give us life-changing money now and, being honest on an anonymous forum, I'm annoyed that they didn't and won't. They are blue collar folks and they think the best thing you can do for your kids is leave them something in your will. They intend me and my sibling to inherit multiple pieces of real estate. Meanwhile my sibling and I both have only children when we'd like to have more. (My sibling needs fertility treatment and also has a precarious career; I have a safe but grinding job, and would also need fertility treatment at this point.) It's their choice, of course, and I would never say anything, but receiving that money or property during our 30s would have drastically changed the shape of our lives and families.

BTW, my absolute dream would be for my parents to live with or near us so I could take care of them as they age. They see that as being dependent on their kids and don't want to. The reality is that we'll probably have to liquidate their real estate to pay for their independent living.

[Anonymous]

What happens when the young couple gets divorced? Does the ex get to spilt the proceeds of the house?

[Anonymous]

Anonymous wrote:What happens when the young couple gets divorced? Does the ex get to spilt the proceeds of the house?

My neighbor his parents put down downpayment. House Soley in sons and parents name and closed on house a few months before wedding.

The verbal deal was she produces off spring they take name off title.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't think this is a "trend" per se, it's just parents giving their children what they can afford. In your instance, you are hanging out with people whose parents can afford to help with $800+ homes.

This is very common in other parts of the world. The childhood home I grew up in (not here) was given to my dad by his parents.
My DC are preschoolers now, but when the time comes, if I can afford to do it, I will absolutely help with housing.

Sure, I think it's one thing to help with housing, it's another to put them in a home they would never get close to be able to afford. Forgetting even just the principle and interest on these mortgages the property taxes and maintenance alone on these houses would take a chunk out of their salary.
There is also the matter of what others in their circle think or know of them. I feel like this is almost a face saving or vanity measure for the parents. Yeah my kid only makes 55K but if I put them in a 800K house nobody will think that, they'll think they're "winners" just like me.

I don't see why that matters. DH and I received no financial help from our parents towards housing, but many of our friends did. I'm happy for them and don't judge them for living in a house they couldn't afford to live in without help.

DP. I judge. There’s something about grown adults being self-sufficient and taking care of themselves that will always earn my respect.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We do not come from money, like at all. My mom is gambling away any inheritance that I may have received, and my in-laws are absolutely broke. My husband and I are totally self-made and we bought our $900k home in the DMV a year ago at 30 with no help at all. I’m proud of us and I actually feel a bit sad for people who don’t get to see the fruits of their own labor everyday to the extent that we do. I love our life (and home) because we made it happen.

Well done, PP

Just because my parents gave us some help with our first house (which was 20 years ago now) and a few other things doesn't mean we haven't worked hard at our jobs and earned our own money of which we are proud...and I did try to give my parents back the money. They 100% didn't want it - they are wealthy and it gives them pleasure to help out while they are still alive versus when they die. Win Win for all of us.

My parents are not wealthy.
They are working class essential workers, probably middle class


But they saved and helped their kids as much as possible and would never hear of us paying them back.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Oh please.

My parents did this, and it helped us build equity in a good investment. After a while we sold our first home and bought our second without any additional help.

It’s not different than any other advantages the well off have.

And I am sure you paid your parents back for all that they did for you.

If parents are trying to pull kids into the UMC, they don’t want to be paid back after they transfer wealth

DP. If the parents are gifting their kids luxury homes, the family is UC, not UMC.

[Anonymous]

Anonymous wrote:

Anonymous wrote:What happens when the young couple gets divorced? Does the ex get to spilt the proceeds of the house?

My neighbor his parents put down downpayment. House Soley in sons and parents name and closed on house a few months before wedding.

The verbal deal was she produces off spring they take name off title.

They'll be in for a surprise if they divorce. Assuming your neighbor's son's wife files with cause, she's entitled to some of those proceeds - regardless of their "verbal deal" and irrelevant that her name is not on the title.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Oh please.

My parents did this, and it helped us build equity in a good investment. After a while we sold our first home and bought our second without any additional help.

It’s not different than any other advantages the well off have.

Did you pay your parents back the initial sum they gave you from the equity? I can’t imagine just keeping such a large sum of ‘help’ if I was able to pay it back. Dh and I did the normal scrimp and save for our first starter home and built our own equity. It’s much more satisfying knowing mommy and daddy didn’t do it for us.

+1 completely agree. I feel like it would be embarrassing and infantilizing to accept so much money for a house when you could afford one on your own, just not an 800k one

You can't fathom it because your parents don't have extreme excess wealth that they can't spend fast enough before they die. There is no need to "pay it back" because it will just come right back to them anyway. These kids will get the money one way or another: they got it for school, for all of the high end belongings their whole lives, their first car, investment accounts from birth and maybe even a trust fund, and so on, the house is just another thing for super wealthy people to spend money on and this one is actually a long term investment.

DP. This is all correct. Among the greatest of unearned privileges is socioeconomic or wealth privilege. But, unsurprisingly, this is not a type of privilege that the ruling class or powers that be like to focus on or criticize.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I know it's not new for parents to help their adult kids out with their first home financially but the number of parents I know buying their adult kids luxury homes is astounding. Has this become a new trend? I recently reunited with a few old friends from high school (we are now all in our early 30s and yes we grew up in expensive homes in a HCOL area) and a number of them have managed to buy 800K plus homes with their parents co-signing the mortgage because they would never be approved for it on their own. These people include a lawyer who put out a shingle and ekes out 65k a year, a friend who went to dental school and has the loans to prove it but upon graduation got married and pregnant and never practiced while her husband is a middle school teacher and an HR assistant at a fortune 500 company making 55k a year. I get helping your kids but why buy them such expensive houses when there salary would never justify it?

Maybe the HR assistant bought $1000 of Etherium in December 2016 and paid for the house in CASH. You assume a lot and have a toxic jealous mind. you should focus on yourself and not worry about the financial circumstances of others. It isn't healthy

They've openly admitted to their parents co signing so there's no assumption there. There is no jealousy here, I personally would not allow for my parents to co-sign a jumbo loan for me in my 30s. I just find it infantilizing and you'll always be beholden to your parents for their financial help rather than growing up and being an adult.

Totally agree. In a way, it means the parents are still in charge. I’m sure the PPs who were gifted homes have great parents, but usually when someone gives you a large sum of money, they expect things from you in return.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Oh please.

My parents did this, and it helped us build equity in a good investment. After a while we sold our first home and bought our second without any additional help.

It’s not different than any other advantages the well off have.

Did you pay your parents back the initial sum they gave you from the equity? I can’t imagine just keeping such a large sum of ‘help’ if I was able to pay it back. Dh and I did the normal scrimp and save for our first starter home and built our own equity. It’s much more satisfying knowing mommy and daddy didn’t do it for us.

+1 completely agree. I feel like it would be embarrassing and infantilizing to accept so much money for a house when you could afford one on your own, just not an 800k one

PP here.

What is and isn’t infantilizing really depends on your culture and social group. This kind of help is incredibly common among my peers.

It wasn’t a big deal for my parents to give us 150-200K for a down payment. They also gave us 50K for furnishings, and paid for our wedding, and paid for graduate school, and are funding our kids’ 529s, etc.

There are a lot of people who are not trust fund wealthy but still wealthy enough to get significant help from their families.

This is true. I know of people in their thirties that still have mom do their laundry. Many adults who are still taken care of by their parents feel comfortable with it and not infantilized whatsoever.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Oh please.

My parents did this, and it helped us build equity in a good investment. After a while we sold our first home and bought our second without any additional help.

It’s not different than any other advantages the well off have.

God, I'm so tired of these worthless adult children who cannot manage to eke out a living for themselves. It's so infuriating. My younger brother is the same way and it's definitely a generational crutch. I don't know how the boomers allowed their kids to make it into 30s and 40s while still supporting them. These "kids" are such a drain on the workforce because they cannot actually do things for themselves. They have no residency, no ingenuity, no resolve. They simple just ask mom and dad to open up their wallets and all their issues solved.

This is precisely why in hiring I look at where these kids went to HS. I want to know if they're part of the man-child class of kids who grew up with substantial wealth and privilege and are unable to leave the nest and make a living on their own. I don't want that class working for me.
Parents, we must do better by our kids. I know it's hard, but teach them how to make it themselves. Your kids will learn a lot through hardship. Even if you can afford more, make them work for it themselves. They will thank you for it in the end - and so will society.

There is definitely some truth to this. Being handed everything on a silver platter tends to affect one’s character in unfortunate ways.

[Anonymous]

Anonymous wrote:I know it's not new for parents to help their adult kids out with their first home financially but the number of parents I know buying their adult kids luxury homes is astounding. Has this become a new trend? I recently reunited with a few old friends from high school (we are now all in our early 30s and yes we grew up in expensive homes in a HCOL area) and a number of them have managed to buy 800K plus homes with their parents co-signing the mortgage because they would never be approved for it on their own. These people include a lawyer who put out a shingle and ekes out 65k a year, a friend who went to dental school and has the loans to prove it but upon graduation got married and pregnant and never practiced while her husband is a middle school teacher and an HR assistant at a fortune 500 company making 55k a year. I get helping your kids but why buy them such expensive houses when there salary would never justify it?

Why does this matter or bother you? It is their family’s business how the parents want to support their kids. It is not up to you to judge or try to figure out the whys and how.

[Anonymous]

I really don't see why people care about this. There will always be people who are richer than you and wealth of parents is a benefit for their children. Yes, it can be both a blessing and a curse. As others have mentioned, it makes sense financially for parents to transfer wealth before they pass away.

fwiw I was raised LMC by a single parent and do not have this benefit. I don't judge people who are are lucky by circumstances of being birthed into wealth (unless they are snobs or jerks). I also don't believe in excessive taxation because I do not believe that state-directed wealth redistribution is an effective measure to address inequality.

[Anonymous]

Anonymous wrote:The truly rich have always given everything to their kids as soon as possible. Donald Trump was being assigned ownership interests in properties and businesses when he was still a young child.

This idea that your kids need to work hard and eek out an existence all on their own is just a story that elites tell the middle and working classes to keep them locked out of the ownership class. In reality, look at how wealthy elites treat their own children.

It’s also partly why the elites like to preach endlessly about intersectionalism and critical race theory. If they can keep society focused on white privilege and racial division, then their vast mountains of financial privilege are less likely to be challenged.