Which is to say, if you’re thinking about buying a home together without tying the knot, you’re not alone!
In 2019, unmarried couples accounted for 21% of home buyers ages 22 to 29.
And yet, when you mention buying a house unmarried, the response is often wide-eyed warnings and cautionary tales. After all, there’s a strong legal framework for dividing marital property in a divorce. Dividing property in a break up? Not so much. But that doesn’t mean you shouldn’t buy together! It just means it’s important to do it in a thoughtful, deliberate way. Here are our top four tips for doing just that.
1. Make a legal co-ownership agreement.
Not only will your co-ownership agreement outline how you will buy, use, and sell your home, it will also lay out what would happen if you were to break up, or if one of you suffered a debilitating illness or injury. Sure, those aren’t pleasant things to think about, but you’ll be creating straightforward, fair processes for handling difficult situations. If that’s not love, we don’t know what is.
2. Be open and honest.
True, this is good relationship advice with or without shared real estate, but it applies especially to your co-ownership agreement. A legal contract is not the place to be vague or gloss over important issues. It is the place to address your fears, make clear plans, and create security for yourself and your partner.
3. Find the best way to hold title.
Holding title refers to the way your ownership is recorded legally. When you buy together, you’ve got options as to how you do this. Here are the three most common:
- Sole ownership. One person has complete control over the property and is the only one who can sell it, or take out loans against it.
- Joint tenancy. You both own an equal share of the home. If you want to sell it or take out loans against it, you’ll need to reach that decision together.
- Tenancy in common. Your ownership shares don’t have to be equal. For example, you could own a 70% share, while your partner owns 30%. You can also decide independently to sell or borrow against your shares.
In many (if not most) situations, the added flexibility of tenancy in common makes it the most appealing way to own property together. That said, these are very quick overviews, and every state has its own laws governing homeownership. A good attorney with experience helping co-buyers in your area will make sure you select the best ownership model for your situation.
4. Make a “wants vs. needs” list.
This exercise is both fun and highly beneficial. Take some time separately to compile a list of “wants” (things you prefer) and “needs” (things you consider necessary). Then compare! You’ll not only bring your goals and desires into focus, you’ll also get a clear sense of your priorities and your partner’s, and that will go a long way toward finding a home you both love.
Owning a home is an exciting and fulfilling experience, and well worth the effort it takes to do it right. With the proper care, preparation, and professional assistance, you and your partner can co-buy successfully—and enjoy all of the wonderful things homeownership has to offer!