Buying Real Estate Solo: Investment, Not a Capitulation
It was an instance of life imitating art--if you can call a crudely drawn cartoon character art, that is. “Cathy” happened to be house-hunting in the funny pages at the same time Barbara Griffith was house-hunting in the classified pages.
Adding to their similarities, both women are spunky, thirtysomething, independent and single. The only major difference between them is that Griffith has a 10-year-old son--plus “Cathy” is fictional, insofar as she can be distinguished from creator Cathy Guisewite.
So Griffith could relate to “Cathy’s” humorously expressed concern that settling into a home sans husband would mean never having to say “I do.”
“On the wall behind my desk at work, I have a ‘Cathy’ cartoon, where a Realtor tells Cathy, ‘Oh, I see, you gave up,’ ” Griffith said with a laugh. “That’s sort of the way I felt--that I’d given up. But you can’t sit around waiting for someone to come along on a white horse.
“However, I’d be happy to share my little house with the right person.”
Like thousands of other single people in the county, Griffith decided that she is “sick of throwing money away on rent” and took a solo flight into the intimidating world of escrow.
“We have more and more single clients,” said Steve Stovall, president of A Neighborhood Emporium, a Century 21 franchise in Fountain Valley. “Today 15% of our clients are single, compared to less that 5% five years ago.”
“I didn’t think I’d ever be able to buy a house,” Griffith, 32, wrote in a letter to Single Life. “My salary as controller for a country club is good, but after rent, car payments and child-care expense, there wasn’t much left to apply to a down payment.
“Then in early 1987 I fulfilled a lifelong dream after winning $8,500 on ‘Jeopardy.’ I accumulated enough to purchase a two-bedroom house with a large country kitchen.”
Griffith self-deprecatingly attributed her success on “Jeopardy” to a “mind that’s full of useless information.”
“My winnings gave me a big jump on getting together a down payment for a house,” she said. “I was tired of sharing apartment walls with strangers.”
Griffith’s scope of possibilities was confined to houses in the under-$130,000 price range--a tall order in Orange County.
Yet she steered clear of “fixer-uppers”: “I’m not a handyman. Not having a husband, I needed a house that wouldn’t require much work.”
Rigid prerequisites and all, Griffith eventually unearthed “the perfect home”--just a few years old and in good condition--in Rancho Santa Margarita. “I fell in love with it the second I saw it.”
Griffith said the tax write-off almost reduces her house payments to the cost of monthly rent.
“When you take into consideration the tax advantages, I’m paying about $900 a month, and I was paying $750 to rent,” she said.
The only regret Bruce has about buying a house is that he didn’t do so sooner. “If I’m ever reborn, I’ll buy earlier,” he vowed.
Two years ago, Bruce became the proud owner of a three-bedroom house with a swimming pool in Buena Park. “It also has an enclosed patio and two fireplaces. All this for $125,000,” Bruce, 38, wrote Single Life. “My net house payment, with tax deductions, is less than my rent was.
“When I saw my first tax refund, it all came home to me. If you don’t buy your own house today, you’re nuts.
“It’s scary in the beginning; a house is the biggest purchase most people will ever make in their lives. But as soon as you adjust to the payments, the whole thing becomes a piece of cake.”
“Real estate is such a solid investment,” Century 21’s Stovall said. “In 1986, my wife and I bought a house for $285,000. If we put it on the market today, we could attain $410,000. Where else can you get that kind of return on your money?”
But although the purchase of real estate is, in general, a reliable investment, financial planner Ron Gable said he does not advise it as a matter of routine to every financially able single.
“You have to look at each case individually,” said Gable, a consultant with Financial Analytical Services in Fountain Valley. “If you come to me and say: ‘I have $20,000 to invest. Should I buy a house?’ I want to know a few things about you before I make that recommendation.
“Suppose you have the goal of moving to a bigger company in another city within the next two years; you might not want to make a commitment to a house. Getting in and out of a house is not easy.
“So I’d ask you about your job security. I’d ask if you’re happy with your occupation. I’d ask if you’re planning a change of life style, such as marriage, in the near future.
“Money in real estate is not money you can call on in 20 minutes or even a few days. So I’d ask, ‘Are you willing to sacrifice some of the luxuries you have, such as expensive vacations?’ ”
“We have had to make sacrifices,” Griffith concurred. “Before I bought a house, my son and I took nice vacations every summer, like to Hawaii. But we’ve been on zero trips over the past two years. And we’ve had to cut down on Christmas presents. But my son is very understanding.”
“I was hesitant about buying at first,” said Jeff, 34, who works for an airline company. “I didn’t want to put myself in a position where I’d have to work 80 hours a week just to make payments.”
Jeff bought his first house a few years ago with a longtime friend. “I might have never worked up the courage if I’d gone it alone initially,” he said. “We gave each other moral support.”
When his house mate transferred to another city last year, the two men sold their house and Jeff bought a condo in Newport Beach. “We split everything right down the middle, cut and dry,” Jeff said.
Single friends combining resources to buy property together has become a common occurence in recent years. “There’s a new trend in building condominiums with two master bedrooms--one for each single person,” Stovall said.
However, even the best of friends should enter into joint ownership with great caution--a lesson that Beth learned the hard way.
In 1980, Beth and her then-boyfriend impulsively decided to buy an oceanfront house together in Seal Beach.
“We saw the house on a Saturday, and on Monday we were in escrow,” she said. “The only agreement we had was a verbal one. I said, ‘If you ever want to sell your half, give me first crack at it.’ ”
Three years later the couple split up, but neither person would budge from the property. In defiance, Beth’s ornery house mate stopped making payments for a few months, leaving her responsible for the entire tab. When Beth tried to sell her half of the house to her former boyfriend, he refused her offer. Likewise, he rejected her suggestion that they put the house on the market.
“It was an ongoing nightmare,” said Beth, 47, a high school teacher in Huntington Beach. Finally, she managed to sell her share of the $400,000 house last year to a man desperate to live on the beach.
Newport Beach lawyer Scott W. Wellman, who specializes in business real estate, recommended that singles thinking of buying a home together first obtain legal counsel.
“My advice would be to draw up a partnership agreement, in case of a dispute that cannot be resolved or in case of a dissolution of the relationship,” Wellman said. “The agreement should clearly outline the ownership of the house.
“It is impossible to sell a house without the approval of all parties involved. And a house is indivisible property--you can’t physically cut it in half. So if you’re buying a house with a friend, you should treat it as a business transaction. Get everything down in crystal-clear writing.”
Once out from underneath her horror story, Beth bought a condo--this time alone--in Huntington Beach. Today she exudes homeowner’s contentment rather than buyer’s remorse.
“I love condo living,” she said. “I found a real gem.”
And buying a home single-handedly does not necessarily imply “giving up” on marriage, Bruce said. “I’d still like to get married someday. But I didn’t want to keep shoveling out rent while waiting for the right person to come along, because who knows when the right person will come along?”
Living together unmarried . . .
Once upon a time, cohabitation was an act of rebellion against social mores. Then in the ‘70s, it became a commonplace step in the path to marriage. Is “living together”--committed but unmarried--still an almost routine stage in relationships? Would you insist on it before setting a wedding date, or would you prefer to go straight to the altar? Have you ever “played house” with a boyfriend or girlfriend? Did it lead to marriage or to the realization of incompatibility? Do you currently live, unwed, with a lover, and why? Let us hear from you.
Blind Dates
Did you think that when you graduated from college you had also graduated from blind dating, only to find yourself years later once again meeting mystery dates for dinner? With the greater emphasis today on knowing the person you’re with before jumping into a fling, have you become more amenable to the matchmaking efforts of friends? Do you feel that going out with a friend of a friend increases your chances of having something in common with your date? Let us know. Is blind dating in vogue now more than ever?
Slim Pickings
We’re taking a survey. Stop what you’re doing, go peek in your refrigerator, jot down every edible in stock, and mail your grocery list to us. Ever notice how married folks’ fridges are always chock full of nutritious goodies, while yours contains about four items--including the loaf of moldy bread and the can of dog food? We’re trying to ascertain the sociological import of this phenomenon, and we hope you’ll contribute to our study.
Triangle Time
Meryl Streep and Robert De Niro romanticized these lovers in “Falling in Love.” Glenn Close and Michael Douglas pulverized them in “Fatal Attraction.” Extramarital affairs--are they lovely, or are they lethal? If you, as a single, have ever been involved with a married person, we’d like to hear from you. What led to your entanglement with an “unavailable” lover? Was the experience fulfilling or painful? Did you feel like a cheat, or did you feel cheated?
