Co-buying a house guide

{{whyLabel}}: Misaligned expectations are the primary cause of co-buying failures.

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• Discuss long-term goals: Is this a 5-year starter home or a 20-year investment?
• Define lifestyle rules: Discuss noise levels, guests, and shared vs. private spaces.
• Agree on a 'minimum hold period' (e.g., 3-5 years) before anyone can sell.

{{doneWhenLabel}}: A written summary of shared goals is signed by all parties.

{{whyLabel}}: Lenders use the lowest middle score among all applicants to determine the mortgage rate.

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• Each person pulls their report from a free official source like AnnualCreditReport.com.
• Share scores transparently to identify if anyone needs to improve their credit before applying.
• Aim for scores above 720 for the best interest rates.

{{doneWhenLabel}}: All participants have shared their current credit scores.

{{whyLabel}}: Lenders typically require a DTI ratio below 43% for mortgage approval.

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• List all monthly debts (student loans, car payments, credit cards) for every person.
• Sum the total monthly debt and divide by the total gross monthly income.
• Ensure the projected mortgage payment fits within this 43% limit.

{{doneWhenLabel}}: A spreadsheet exists showing the combined DTI ratio.

{{whyLabel}}: You need to know exactly how much you can put down and what remains for closing costs.

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• Each person documents their available cash for the down payment.
• Factor in 2-5% of the purchase price for closing costs (taxes, fees, inspections).
• Ensure a 'cash reserve' of 3-6 months of mortgage payments remains after closing.

{{doneWhenLabel}}: A total 'Buying Power' figure is agreed upon.

{{whyLabel}}: Understanding the mechanics of property as an asset helps treat the co-purchase as a business.

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• Focus on the chapters regarding financing and property management.
• Use the 'Four Square' method described to analyze potential deals.
• Discuss the 'BRRRR' strategy if the group plans to renovate.

{{doneWhenLabel}}: All participants have read the core chapters and discussed takeaways.

{{whyLabel}}: TIC allows for unequal ownership shares and lets you pass your share to heirs rather than automatically to co-owners.

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• Assign ownership percentages based on down payment contributions (e.g., 60/40 or 33/33/33).
• Confirm that each owner can sell or mortgage their interest independently (with agreed restrictions).
• Avoid 'Joint Tenancy' unless you want the 'Right of Survivorship' (common for couples, rare for friends).

{{doneWhenLabel}}: Ownership percentages are documented and agreed upon.

{{whyLabel}}: This 'Real Estate Prenup' prevents legal battles by defining rules before conflicts arise.

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• Define how monthly costs (mortgage, taxes, insurance) are split.
• Establish a 'Right of First Refusal' for buyouts.
• Include a 'Forced Sale' clause if one person defaults on payments for more than 60 days.

{{doneWhenLabel}}: A draft agreement covering finances, exits, and usage is complete.

{{whyLabel}}: A professional ensures the agreement is enforceable in your specific jurisdiction.

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• Provide the attorney with your drafted Co-ownership Agreement.
• Ask specifically about local partition laws and how to waive the right to partition to prevent forced sales.
• Ensure the deed reflects the 'Tenancy in Common' status correctly.

{{doneWhenLabel}}: The agreement is reviewed, finalized, and notarized.

{{whyLabel}}: Mixing personal and property finances creates accounting nightmares and legal risks.

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• Choose a bank that offers easy digital access for all co-owners.
• Set up automated monthly transfers from each person's personal account to this joint account.
• Use this account exclusively for mortgage, utilities, and a 10% maintenance buffer.

{{doneWhenLabel}}: The account is active with the first 'buffer' deposits made.

{{whyLabel}}: You cannot make a serious offer in 2025/2026 without a verified pre-approval letter.

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• Apply as 'co-borrowers' to pool your incomes.
• Provide all W-2s, tax returns, and bank statements to the lender.
• Request a 'Loan Estimate' to understand the true cost of the loan.

{{doneWhenLabel}}: A pre-approval letter for the target amount is received.

{{whyLabel}}: Multiple buyers mean multiple opinions; a list keeps the search objective.

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• Rank priorities: Number of bedrooms, proximity to transit, or outdoor space.
• Agree on 'deal-breakers' (e.g., no major structural repairs needed).
• Use a shared ranking system (1-10) for every house viewed.

{{doneWhenLabel}}: A shared 'Property Scorecard' is created.

{{whyLabel}}: Co-buying involves complex communication; you need an agent who can manage multiple stakeholders.

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• Interview agents and ask if they have handled 'Tenancy in Common' sales before.
• Ensure they are comfortable with group emails and multi-signature documents.
• Verify their knowledge of the local market's 2025 inventory trends.

{{doneWhenLabel}}: A buyer's agency agreement is signed.

{{whyLabel}}: Emotional buying leads to regret; data-driven viewing ensures the best investment.

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• Attend open houses or private showings together.
• Fill out the 'Property Scorecard' immediately after each viewing.
• Take photos of specific areas (HVAC, roof, basement) for later comparison.

{{doneWhenLabel}}: At least 5 properties have been viewed and scored.

{{whyLabel}}: In a competitive market, your offer must be strong but protect your group from 'money pits'.

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• Include an inspection contingency and a financing contingency.
• Use the pre-approval letter to prove financial strength.
• Ensure all co-buyers sign the offer document simultaneously via e-signature.

{{doneWhenLabel}}: An offer is submitted and accepted by the seller.

{{whyLabel}}: Hidden defects can bankrupt a co-buying group if not identified early.

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• Hire a certified inspector to check the foundation, electrical, plumbing, and roof.
• Attend the inspection in person to ask questions about future maintenance.
• Use the report to negotiate repairs or a price reduction if issues are found.

{{doneWhenLabel}}: A full inspection report is reviewed by all co-owners.

{{whyLabel}}: This is the legal transfer of ownership and the finalization of the mortgage.

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• Review the 'Closing Disclosure' (CD) 3 days before signing to verify costs.
• Wire the down payment from the joint account or individual accounts as agreed.
• Sign the deed, ensuring it explicitly states 'Tenants in Common'.

{{doneWhenLabel}}: Keys are received and the deed is recorded.

{{whyLabel}}: Documenting repairs is essential for tax purposes and for future resale value.

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• Use a shared cloud folder to store receipts for all repairs and upgrades.
• Create a schedule for recurring tasks: HVAC filters (quarterly), gutter cleaning (bi-annually).
• Assign a 'Maintenance Lead' for each quarter to ensure tasks are done.

{{doneWhenLabel}}: A shared digital log is active and the first task is scheduled.

{{whyLabel}}: Regular check-ins prevent resentment over unpaid bills or unexpected costs.

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• Review the joint account balance and upcoming property tax/insurance bills.
• Adjust the monthly 'buffer' contribution if utility costs have risen.
• Confirm all owners are current on their contributions.

{{doneWhenLabel}}: The first quarterly meeting is held and documented.

{{whyLabel}}: Small daily costs (cleaning supplies, lightbulbs) add up and cause friction if not tracked.

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• Use a free tool like 'Splitwise' or a shared spreadsheet.
• Log every shared household purchase immediately.
• Settle the balance monthly via the joint account.

{{doneWhenLabel}}: All owners have the app installed and the first expense is logged.

{{whyLabel}}: Life circumstances (marriage, jobs) change; the agreement must remain relevant.

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• Discuss if anyone's timeline for moving out has shifted.
• Update the 'Fair Market Value' estimate using local 2026 market data.
• Re-confirm the buyout process and interest rates for internal loans.

{{doneWhenLabel}}: An annual 'Exit Strategy' memo is signed by all owners.