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How Co-Buying Can Help You Become A Homeowner
Dated: July 27 2019
Want to get out of the cycle of renting a home but you can't afford to buy it on your own?
There is a thing called co-buying to help you achieve the American dream of owning a home!
Co-buying is becoming more and more common in the last few years especially when property prices increase compared to most people's regular salaries, people are getting married later in life is a trend and rent is becoming as expensive or sometimes more expensive than paying a mortgage.
What is Co-buying?
It is when two or more people buy a property and agree to share ownership for it. It can be a partnership between close friends, relatives, couples or even a company.
What are the options in doing this?
There are two options for co-buyers in deciding on how you will both take and hold the title to the home and share ownership of it.
1. Joint tenancy with Right of Survivorship (JTWROS) - this is when the ownership is divided equally between the owners regardless of the investment each of you have in it. In the event of death, the surviving owner will automatically assume the remaining shares even if a will says otherwise. It helps to avoid the long, complicated and expensive legal process of validating a will and distributing the probate property. This is common with married or unmarried couples.
2. Tenancy in common (TIC) - Shares of the property is not divided equally. The ratio of ownership can be proportion on the amount you invested. Each owner can designate the inheritors of their share in the event of death. This is most common because of the flexibility of the ownership.
Where do I start?
So, if you decided to co-buy a home with someone, the first thing to do is you need to draft and sign a co-ownership agreement to clarify 1) who owns what percentage, 2) who will shoulder the expenses and 3) provisions and agreement if one of you decided to get out of the co-ownership.
If you need professional help in doing this, and looking to buy a home in Alaska especially in Anchorage, call or text 907 570-6757 or 907-720-4663 so we can help!
To our next blog, we will discuss the pros and cons of co-buying a home, so stay tuned!
Vanna has called Alaska home for the past 15 years. As a mother, real estate investor and previous business owner, Vanna brings many different perspectives when working for her clients. She has been a....