June 2018

Buying a home with others

There's a lot to be said for buying a home with someone else (family, friends or significant others). Pitching in together can put a home within reach that might otherwise not have been an option.

But there are challenges to bear in mind. Here are some of the questions you may want to ask yourself (and the people you're thinking about buying with) before you sign on the dotted line.

How will ownership be divided?

Partnerships are rarely equal. People buying a home together may have very different circumstances. Savings, existing debt, credit scores and monthly income are all financial considerations that could affect how ownership should be divided.

It's a good idea to sit down and have a frank discussion about who will pay for what expenses and how that may impact ownership. It's also an opportunity to honestly assess the financial stability of everyone concerned. The mortgage payment calculator is a great place to start the mortgage payment discussion.


How will you deal with ongoing expenses?

It may sound petty, but ongoing expenses and maintenance can become a sticking point. Is a clogged sink everyone's responsibility or only the person who clogged it in the first place?

An ownership/co-habitation agreement can be used to outline day-to-day details and responsibilities. It can also set crucial rules around things like pets, sleepovers, general cleaning and who buys furniture.


Who has access and when?

It's only natural that everyone will want to make full use of their new property, but it's important to come to an agreement about what this includes. Are family vacations okay? Holiday get-togethers? Is there a possibility of renting in the future?

Remember, the property belongs to all the owners, and sharing living space generally means making concessions. If it helps to establish the rules, write them down so that everyone knows where they stand.


Should you consult a lawyer?

You may think an attorney is unnecessary, given the relationships between the people involved, but co-ownership can be tricky to navigate without one.

A lawyer will be able to advise you on whether or not to form an LLC or trust to hold the property title, how to draft an ownership agreement and what possible exit strategies may be appropriate.


What happens when someone wants to move out?

No one can predict changes in circumstances and, at some point, one of the owners may want to get out of the arrangement.

Thinking about exit strategies before you move in may seem counterintuitive, but it makes perfectly good sense to be prepared for unexpected scenarios.


The bottom line is that buying with others has many benefits as well as potential pitfalls. It's important to do your homework and settle all the details before they can become issues.

Contact me about what financing options may be available for your particular situation.

"Pitching In: How to Buy With Others," hgtv.com

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