Dawna was simply amazing! She was knowledable and kept me well informed on the matters of the sale of my house. Beyond keeping me informed she took it upon herself to act as my instructor in real estate which was so very helpful. Dawna is also a wonderful and honest agent, it was such a pleasure working with her. Her assistant Jodi was also a real asset in the sale of my home. I thank you both so much!
- Keep agreements simple- All agreements should be easy to explain to outside parties (other children, family members, legal advisors, tax advisors, etc.) Have all agreements in writing, this avoids conflicts over assumptions and expectations.
- Know the benefits to all parties- Over 33% of first-time homebuyer purchases involve gift/loan funds, according to a recent CAR Homebuyer Survey. This is an increasingly common way of transferring wealth or advance inheritance to the next generation. It can make the purchase much easier for the buyer, lowering interest rates and monthly expense because of to a higher down payment.
- Determine how to contribute- Per IRS.gov, there is a maximum amount each individual can gift to another person annually. This can be significant amount towards a purchase. For example, if two parents each made gifts to their child and partner, this could be a substantial gift towards a downpayment. Of course, gifts can be larger, but may have tax consequences. Consult your tax advisor for more information.
- Decide if you want to be in a partnership- If you are a joint owner or lender to your children, you are in a form of a partnership with your child. It may be more beneficial for all parties to keep interests separate by gifting.
- Review your own estate plan- See your financial planner, CPA, and estate planning attorney for advice on how you can contribute and to determine if it’s feasible with your current personal financial plan and needs.