Cobuying a Home
by
Craig Venezia
Buying a first or second home with friends or family can make it more affordable.
What you learned in kindergarten about sharing could help in your quest for a home. But this time around, rather than sharing your Lincoln Logs, you'll be sharing your home, with a cobuyer.
Once the domain of married or committed couples, more and more homebuyers are discovering the advantages of teaming up with a relative, friend, or someone else to buy a house. If done right, the shared-purchase approach can get you a home you might not otherwise have been able to afford.
On the other hand, if you don't fully think through the arrangement and set it up correctly, it could lead to financial and legal chaos, not to mention a strained or broken relationship.
Decide How You'll Hold Title
Any time you buy a house, you receive what's called "title," evidenced by a piece of paper called a "deed," which explains how the grantees are sharing the title.
It's important to choose a manner of title-sharing that reflects your true wishes about how you'll share ownership. Your main options for sharing title with a non-spouse include:
- as tenants in common (TIC), and
- as joint tenants with right of survivorship (JTWROS).
(Married couples may also take title as "tenants by the entirety" or as "community property.")
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