How to Buy a House with Someone Who Is Not Your Spouse

Owning a home remains the American Dream.

And for many singles to achieve it, they are buying with another person who is not their spouse.

From a legal standpoint, this requires some extra legal preparation.

Frank conversation about mutual expectations, finances and debt and credit.

Reducing the terms of the arrangement to a written contract.

Some points to be covered:

  1. Do the co-owners have identical interests, equal interests, or unequal interests?
  2. What happens to the co-owner’s interest if that co-owner dies?
  3. What happens if one co-owner wants to sell that co-owner’s interest?
  4. What happens if the co-owners have a fight and cannot bear to occupy the house together anymore?
  5. How are the co-owners’ respective interests valued?
  6. What if one co-owner’s debts result in a lien on the property?
  7. How will the mortgage be paid?
  8. How will mandatory expenses of the property be paid (real estate taxes, probably homeowner’s insurance)?
  9. How will (semi)optional expenses of the property be paid (repairs, improvements)?
  10. How will a co-owner’s share of expenses be paid in the event of that co-owner’s death?
  11. Should each co-owner be required to maintain life insurance for the benfit of the other co-owner?

A little advance consideration and planning is crucial to a successful real estate joint venture outside marriage.

Read more in this MS NBC article: Pros and cons of buying a house with friends.