Buying a home with friends, ever considered that idea to get your foot on the first step of the HOMEOWNERSHIP ladder? Stay tuned for some valuable tips.
Rents have been on the rise and homes prices are going up, some people are making the choice to partner with friends and buy a home together. This is a creative way for people who would not be able to afford a house to share expenses and achieve the dream of becoming homeowners. Pretty attractive idea vs. renting. The question is how do you know if buying property jointly is the right move for you?
Here are few 8 tips to consider before buying with a friend.
Tip #1: A very important tip to remember is that this is a business transaction, so you and your friends will have to approach it that way. It’s just business. You and your friends need to have a very frank and open conversation about their future plans, finances and what to do if one of the owners want to sell. Ok I’ll say it if this type of conversation is uncomfortable or you are concerned about the effect they might have on your friendship, then buying a home with friends is probably not the right choice for you!
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However, if you and your friends can come to terms, owning a home while sharing the burden of all the costs can help you build your savings while gaining equity in a home.
Tip #2: Everyone should to be aware of everyone’s credit scores, income, savings and any other relevant assets. YOU must make sure that you and your friends are financially prepared to become homeowners.
Tip #3: Decide how payments and costs will be split. You need to consider how much each person will contribute to the down payment and if that will affect how you and your friends divide the mortgage payments.
Tip #4: Utility bills and repairs. How will those expenses be split? Evenly or by percentage. It is so important that these details be worked out and understood by everyone involved before the home is purchased.
Tip #5: Decide on the type of house. Are you planning on buying a
single-family home, multi-family home or condo, you all need to be together on
this decision.
Questions to discuss. Do you see yourself sharing a kitchen and bathroom, or are you looking to buy a place where you will each have your own private residence like a duplex? Will you have other roommates? All important things to discuss in advance.
Tip #5: Make a realistic “must-haves” list. Bet you will learn a lot more about your friends on what is important. This way your REALTOR can seek the right property that will work for everyone.
Tip #6: Get everything in writing in a contract, including the financials, responsibility and if a friend wants to sell or be bought out.
Tip #7: Have local attorney draw up an agreement, all parties should sign and retain a copy before you buy. This will help you to avoid conflicts and surprises down the road. Buying a home is an important decision, and whether you are doing it on your own or with a friend. If you enter the arrangement educated and prepared, co-purchasing a home can be a great way to get your foot on the first step of the homeownership ladder.
Tip #8: Use an experienced REALTOR with years of experience that will negotiate on your behalf and help you stay focused on the issues that are most important.
We are REALTORS that are knowledgeable, offer years of experience and want to be your go to team. Give us a call if you are considering buying or selling a property.
It’s your HOME, your LIFESTYLE and WE are your REAL ESTATE team!
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