The high cost of housing can make purchasing a home on a single income difficult. But did you know that you can join forces with a friend or even a group of friends to overcome this challenge? Co-buying a home is a practical solution that not only makes homeownership more attainable but can also lead to unexpected benefits.
Benefits of Co-Buying with Friends
– Shared Costs: By splitting the down payment, mortgage payments, and other home expenses, co-buyers can ease the financial burden of purchasing a home.
– Increased Buying Power: Combining resources means you can afford a larger home or one in a more desirable location than you might on your own. This also applies to vacation properties!
Financing Your Co-Buy
Co-buying is similar to buying a home alone or with a spouse. You’ll be qualified based on your combined income, down payment, and credit scores. The process doesn’t differ significantly, but it’s crucial to plan accordingly.
Home Options for Co-Buyers
– Accessory Dwelling Units (ADUs): Homes with separate living spaces are ideal, offering privacy and autonomy.
– Duplexes, Triplexes, and Four-Plexes: These properties provide multiple living units within one building, accommodating different living arrangements.
-Homes with Potential for Modification: Look for properties where a second kitchen can be added or that have the potential for separate access.
Crafting a Co-Buying Agreement
While co-buying with friends can be rewarding, it’s important to outline your exit strategy in advance to avoid potential conflicts. Consider these elements when drafting your co-buying agreement:
– Right of First Refusal: Will you offer each other the chance to buy out the others before putting the property on the market? Define terms such as seller financing or cash buyouts.
– Third-Party Sales: Decide if co-owned shares can be sold to outsiders and set parameters regarding usage rights, approvals, and maintenance responsibilities.
If you’re interested in exploring co-buying as a solution to the high cost of housing, we’re here to help. Contact us to navigate the process and turn your homeownership dreams into reality.
If you’ve been thinking about selling, we’d love to discuss it with you and ensure you receive the top price for your home. Simply email Julia@splanhomes.com or call 801.949.9878.
Looking forward,
Julia and Kate
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