The B.C. Society of Notaries Public conducted an internal online survey of members on key real estate topics in November 2015 and found that more than half of notaries’ first-time home buyer clients are typically getting help with their down payment from parents.
While notaries don’t formally track whether or not parents contribute, how much or how they structure the funding, of the 133 notaries who participated 57 per cent said that in their experience first-time buyer clients in their community were typically getting help with their down payment.
Another 30 per cent of notaries said new buyers are typically funding the down payment on their own; and others didn’t know.
Virtually all of those who are getting financial help are receiving it from parents, rather than other family members or friends: About half, 52 per cent, are receiving less than 25 per cent of the down payment; a third are getting 25 to 50 per cent; and 15 per cent are receiving more than half of the down payment from mom and/or dad.
The same notaries reported that almost 70 per cent of parents are gifting the money, 17 per cent are going on title, and 15 per cent make “other” arrangements, which includes private informal or formal loans, a second mortgage or co-signing to guarantee the loan.
“Deciding whether or not you can or should support your child’s purchase of a first home, and how to structure the arrangement is a personal choice for each family,” said Tammy Morin Nakashima, president of BC Notaries Society in Richmond.
“There are several things families should consider, including whether or not the lending parents should share in ownership and how everyone should plan for the unfortunate possibility of death or divorce.
“We help our clients choose an arrangement that’s right for them.”
Notaries provide conveyancing or other legal services on more than half of all real estate transactions in B.C. and are highly trained and experienced in both simple and complex real estate transactions.
Notaries from Greater Vancouver, the Fraser Valley, Vancouver Island, Northern B.C., and the Okanagan, Kamloops and Kootenay regions participated in the survey, which showed that the percentage of first-time buyers typically getting a financial kick-start varied throughout B.C.