Paige T on the Power of a Monetary Gift
Paige, a 30 year old, senior software analyst in Fort Collins, Colorado, is an old friend from college who has become a seasoned homeowner since we graduated. For the last three years, she’s lived in a beautiful townhome south of downtown, renting her spare room to a friend and going on adventurous trips in her free time. As long as I’ve known her, she’s been decisive and pragmatic. I could just tell that she had wisdom to share when it came to buying a property.
When I first approached her to share her buying experience though, her response was unexpected. She was happy to tell the story but immediately clarified in our text exchange that she couldn't claim sole ownership of the purchase; her dad had provided the down payment.
This swift disclaimer about ownership in general triggered a cascade of thoughts;
Because she didn’t pay for the down payment on her own, did that mean the house wasn’t completely hers?
How common is it for people to buy a home without any kind of help, financial or otherwise?
And if not through a monetary gift, how do we account for the value of early financial education or a family member setting the example prior to our own purchase?
Personally, I couldn’t think of many homeowners that hadn’t received some form of the support listed above. And even still, I would define all of them as sole owners because of the subsequent responsibility that begins after they sign the closing documents.
Going back to Paige’s disclaimer, I sensed something else attached to the monetary gift. I wanted to learn more about how she perceived her own role in becoming a homeowner.
Paige’s path to homeownership
Finally, we got together in person. The last time I’d seen her was on the beach in Costa Rica months prior for a birthday trip. We’d soaked in vacation mode abroad and didn’t speak of work. This time, we hovered over hot lattes on an overcast day and were all business.
Her professional superpower shining through, Paige explained that her original decision to buy was relatively simple. Owning at the time was more affordable than renting. Planning to stay put for at least three years because of her job, she saw the opportunity to build equity in a physical asset and take advantage of low interest rates. An easy analysis.
The process unfolded smoothly for her. Through the guidance of a trusted realtor from Cyclebar, an indoor cycling studio where she taught classes on the side, Paige connected with a lender who later pre-approved her for a loan.
Her dad, who had always been business-savvy, a tactical investor, and lived within his means, was especially helpful at this time. She valued his perspective on real estate so when he recommended a particular loan, she listened. When he encouraged her to move forward with an offer, she went for it.
Upon going under contract on her now home, her dad unexpectedly made the offer to pay for the down payment while they were discussing it. The surprise proposition gave Paige pause; she hadn’t intended to ask for help and didn’t want the burden of repayment. However, as they talked through her concerns, he explained that he saw it as a chance to give her an early inheritance and invest in her future. After careful consideration, she decided to accept.
So far, Paige had seamlessly painted the picture of a person who thoughtfully evaluated her options, strategically managed her finances and invariably remained open to sage advice. It was clear that she was proud of herself for navigating the circumstances as she did. Instead of feeling some type of way about having received a financial gift, she was just recognizing the significance of her dad’s gift during the purchase.
The ripple effect of giving
The gifted down payment obviously relieved some of the financial pressure in closing on the house, but it ended up equating to so much more than a few dollars saved.
After closing on the home, Paige reflected that receiving support had made her want to give to someone else too. When another friend from Cyclebar was seeking housing days later, she didn’t even hesitate to offer her spare room at an under-market monthly rent. It was her way of paying the financial gift forward.
Beyond a mindset shift, the experience also had a significant impact on her relationship with her dad. The transaction, and eventually the house itself, consistently gave them something to talk about, think about, and learn about each other through. At some point, her dad conveyed strong opinions about how Paige ran her household which forced them to establish new boundaries in their communication. On top of that, they had to utilize a new method by which Paige made updates; first she completed the work and then told him afterward. While the home was very much hers, he’d been intertwined in the entire journey. That was special to her even if it wasn’t always easy.
Reframing financial support
Paige's story underscores just how far a gift can stretch. In her situation, it eased her transition into homeownership, encouraged her to help others around her, and brought her closer to her dad. An incredible outcome to her forward thinking desire to own a home.
Furthermore, it emphasizes the importance of discussing forms of support, such as assistance with a down payment, with family members who may be in a position to help. Though Paige didn't initiate the request, engaging in a conversation with potential supporters could yield benefits beyond personal gain.
