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Writer's picturelezleyknott

How to Buy a House With Friends

Buying a house with a friend can be a smart way to share the financial burden and enjoy the benefits of homeownership. Here are the steps to successfully buy a house with a friend:


1. Discuss Financial Expectations and Responsibilities

  • Open Communication: Have an honest conversation about your financial situations, goals, and expectations.

  • Budgeting: Determine how much each person can contribute towards the down payment, monthly mortgage payments, and other expenses.


2. Check Credit Scores and Financial Health

  • Credit Reports: Obtain and review each other's credit scores and reports. Both will affect your mortgage approval and interest rates.

  • Financial Health: Assess each person's income, debts, and savings.


3. Get Pre-Approved for a Mortgage

  • Joint Application: Apply for mortgage pre-approval together. This will give you an idea of your combined purchasing power.

  • Compare Lenders: Shop around for the best mortgage rates and terms.


4. Draft a Co-Ownership Agreement

  • Legal Counsel: Consult a real estate attorney to draft a detailed co-ownership agreement.

  • Details to Include:

  • Ownership Shares: Specify the percentage of ownership for each person.

  • Financial Contributions: Outline each person’s contribution to the down payment, mortgage, taxes, and maintenance.

  • Responsibilities: Define who is responsible for what aspects of the property (e.g., maintenance, bills).

  • Exit Strategy: Plan for scenarios where one person wants to sell their share or if there are disputes.

  • Dispute Resolution: Establish a method for resolving disagreements.


5. Decide on the Type of Ownership

  • Tenants in Common: Allows each person to own a specific percentage of the property. Shares can be unequal and passed on to heirs.

  • Joint Tenancy with Right of Survivorship: Each person owns an equal share, and ownership automatically transfers to the surviving owner(s) upon one owner’s death.


6. Start House Hunting!


Reach out today to get started. I can help guide you every step of the way!

619-746-1669 or email me at LezleyMJones@gmail.com



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