Friday, October 7, 2016
Financial Health Buying and Selling
Buying a house with a friend or family member, is it a good idea? The first step is outweighing the pros and cons to see if this is the right decision for you.
Many young people can't afford to purchase a house on their own. Teaming up with another buyer might just put their dreams within reach. But buying a home with a close friend or family member takes what is already a very big life decision and creates a unique dynamic. How will major decisions be made and agreed upon? It certainly is not right for everyone, but with the right pairing and some serious planning, it might be the perfect solution for two parties who are unable to afford a home on their own.
There are positive factors as well as some risks that need to be carefully examined before entering into joint ownership.
Here are some of the benefits. You can share the responsibility of finances, including the deposit, mortgage payments, monthly expenses, legal and real estate fees. You may also qualify for a larger mortgage, which will mean a bigger home or maybe a more desirable location. You can also share the burden of maintenance costs, furnishings and decor.
Here are some of the drawbacks. You might encounter a number of disagreements when sharing ownership - for example, what if one person wants to sell the house before the other? What if one owner wants a few pets and the other doesn't? There could also be complications when it comes to working out how to split up the costs, managing household responsibilities and determining household rules.
Before you purchase, make sure that everyone involved signs a co-ownership agreement. This will set the ground rules ahead of time and act like a pre-nuptial agreement to ownership.