Thinking about purchasing a home with someone other than your spouse—perhaps a friend or relative? Before you do, put together a plan and ask your counterpart (and yourself) some key questions.
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When arriving at the decision to buy a home with someone you’re not married to, you’d be well advised to explore a few questions before taking the first steps toward the purchase.
First, what’s your relationship to this person? Are you looking for a short-term living arrangement (maybe with a friend from college) or is it a longer-term move (maybe with a sibling)? More importantly, how long do you expect the relationship to last? This is a fundamental aspect of the buying process because you’ll need to consider how the title will be held between the two (or more) of you.
If the relationship is foreseeably short-term, you’ll want to know if either party can be “bought out” of the relationship. Let’s say, for instance, your friend decides to sell to someone else that lives in another state. Is this something you’d be comfortable with?
How will you manage the rent if both incomes are needed? If the mortgage is dependent on your dual incomes and someone were to lose their job, will you have a plan of action in place to preempt this dilemma?
Though you’re like-minded about buying the home together in the beginning, what if, later, one party wants to sell the home when the other doesn’t? That sort of question could potentially arise, so it’s important to have the answers spelled out and specified before any purchase is made.
If the mortgage is dependent on your dual incomes and someone were to lose their job, will you have a plan of action in place to preempt this dilemma?
Once these questions are answered, it’ll be time to answer the all-important question of how exactly to handle the title. If the parties would like to have joint title to the property, there are two ways that this can be done—joint tenancy and joint tenants in common.
Under joint tenancy, you would possess survivorship or the right to the whole property in the event that your counterpart dies.
Under joint tenants in common, each owner possesses an individual share in the property, and therefore, has autonomy to sell their share at any point in time.
Lastly, decide how repairs and utilities will be handled.
It might sound like I’m cautioning you against a move of this nature. Having a plan in place is not only recommended, but it's also critical to preventing potential ownership complications down the road. That’s why I recommend meeting with a skilled title insurance attorney who can help you formulate a plan beforehand.
If you’d like more information on this topic or if you need help with any of your real estate needs, please don’t hesitate to send me an email at Charlotte@CharlotteMabryTeam.com. We’d love to help!
