Getting Creative to Buy Property Comes with Challenges

Pooling resources with family members or friends makes sense, but shareable properties like duplexes or single-family homes with auxiliary living units are scarce in the East Bay market.


This Ivy Drive duplex, sporting a lush backyard, sold quickly.

Open Homes Photography

Diversity, culture, fantastic weather, and breathtaking vistas rank high on the list of reasons to live in the Bay Area. However, with home prices continuing their record-breaking ascent, house hunters at the edges of affordability are increasingly turning to creative solutions in hopes of grabbing the Golden Ring of home ownership.

“A lot of people inquire about purchasing a home with additional living quarters so they can commingle finances with a friend or relative,” said Red Oak Realty’s Deidre Joyner. “What they don’t realize is how rarely these types of property come on the market and the prices they command.”

A typical scenario, Joyner said, might involve several people or families who want to purchase one property to share—a duplex, a large single-family home, or a property with an accessory building or secondary structure. The primary buyer might have a budget of $750,000 but could increase that to $1 million with the second party’s finances.

“What people think of as a $150 or $200K difference in their budget range is more like $400 to $500K,” Joyner said. “Coupled with the scarcity of these types of properties, well, it’s like looking for a needle in a haystack.”

Joyner sold one such property in 2016—a mid-century modern duplex on Ivy Drive with skyline and Lake Merritt views—for close to $1.4 million, which nearly doubled the sellers’ original purchase price.

“The sellers were friends who purchased the dual-family home together in 2005,” Joyner said. “However, when it came time for the co-owners to sell, the property was difficult to price, because of the dearth of comparable properties.

“A lender will only give you a loan based on an appraised value based on like-kind properties,” Joyner said. “There was virtually no data available to determine a market value to set a price. I was afraid I might not be able to procure a loan for a prospective buyer.

“Duplexes are not only rare, but very desirable for their income potential and mortgage subsidy—live in one, rent the other,” Joyner added. “We showed the house for two weekends and couldn’t believe how many people came to the showing. We had 15 offers, with four in cash.”

Based on the market temperature and extreme interest, Joyner advised her clients to pursue the cash bids and simplify the transaction.

 Younger buyers are looking for where their dollar can buy more, Joyner said. “They want to live in the flats, near urban centers,” she said. “Duplexes and multi-family buildings in these areas could be the pathway to the home ownership—if you can find them.”

Published online on Oct. 13, 2016 at 4:45 p.m.

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