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Buying a Home With a Friend or Family Member: Smart or Risky?

With home prices climbing and affordability top of mind, many buyers are considering alternative ways to purchase a home—including teaming up with a friend or family member. While co-ownership can be a smart way to share costs and responsibilities, it also comes with potential risks. Here's what you should know before you go in on a home together.


💰 Why People Choose Co-Ownership

Buying a home with someone else offers some serious advantages:

  • Shared Financial Burden: Splitting the down payment, mortgage, and ongoing expenses can make homeownership more accessible.

  • Stronger Buying Power: Combined incomes may allow you to qualify for a better loan or afford a larger or more desirable property.

  • Investment Opportunity: For some, this is a strategic move to build equity and invest in real estate sooner.


⚠️ The Potential Risks

But just like any partnership, co-owning a home has its downsides:

  • Legal and Financial Ties: If one party can’t make payments or wants to sell early, it affects both parties.

  • Disagreements: Differences in lifestyle, maintenance preferences, or long-term goals can create tension.

  • Credit Consequences: If one person misses a mortgage payment, both credit scores could be impacted.


📝 How to Protect Yourselves

If you’re thinking about buying a home with someone else, planning ahead is key:


1. Create a Co-Ownership Agreement

This legal document should outline:

  • Ownership percentage

  • Who pays what (mortgage, utilities, repairs, etc.)

  • How decisions are made

  • What happens if one person wants to sell or move out


2. Decide on Title and Ownership Structure

There are several ways to hold title, such as:

  • Joint Tenancy (equal ownership, right of survivorship)

  • Tenants in Common (can own unequal shares, pass to heirs) Talk to a real estate attorney to choose what’s right for you.


3. Get Pre-Approved Together

Work with a lender who understands co-ownership financing. All parties’ income, debts, and credit will be considered.


4. Plan an Exit Strategy

Discuss your long-term goals and create a plan for selling, refinancing, or buying each other out down the road.


🏡 Is It Smart or Risky?

The answer is: it depends on your relationship, communication, and planning. Co-ownership can be a smart way to break into the market, especially in competitive areas—but it only works if everyone is on the same page.


Thinking about buying a home with someone? Let's chat about how to structure the purchase to protect your finances and future.


Scott Sweeney

Your NorCal Realtor

M&M Real Estate

BRE Lic# 01938720

Cell: Call/Text 707-330-2324


About Scott Sweeney


SweeneySells

Full Time Realtor 13 Years +

Over 100 Families Served

Top 5% Producing Agent

Buying & Listing Specialist

Contract & Negotiation Ninja

CSUS Business & Marketing Graduate 2006


With quickly serving over a 100 families, Scott Sweeney has become a top 5% producing Realtor in the greater Sacramento area who has helped clients from the Bay Area to South Lake Tahoe. Scott has a Bachelor Of Science in Business Administration, with a concentration in Marketing from CSUS. His education, and extensive background in the hospitality, marketing, and real estate industries, have helped Scott to become one of the leading, and most sought after agents in the area.


Reach out to SweeneySells today, and take the first step towards your real estate goals!

📞707-330-2324




Top Producer 2016-2023


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