On Not Waiting Until Marriage (To Buy A House)

Buying A Home With Your Significant Other

At Thanksgiving I checked in with one extended family member who recently bought a house with her boyfriend. After Christmas I checked in with my little brother, who’s considering buying a house with his girlfriend.

All I need is a third example and I can write a trend story for the New York Times!

Just kidding, I don’t need a third example. I’m a blogger. Anyway, the frequency with which unmarried couples buy property together has been increasing for years. In 2014, the Boston Globe reported:

Data from the National Association of Realtors show that, on average, married couples accounted for 61.6 percent buyers from 2001 to 2011. Unmarried couples made up an average of 7.5 percent.

That article goes on to give advice to cohabiters who want to take their living situation — but not their marital one — to the next level, including “Swap financial histories,” “figure out about taxes,” and, most importantly, “sign a contract.”

couples should enlist an attorney and draw up a purchase contract before buying a home. Such a pact should outline details of how much each person is contributing, whether it’s money, taking on a loan, or paying to cover maintenance and other costs.

‘‘It has to be very clear who is putting the money in, who is going to do the improvements, so they have a good understanding of ownership,’’ said Monica Rebella, a certified public accountant in Tustin, Calif.

The pact also can set out how the couple wants to split any equity gained in the home, for example. The contract’s details can help sort out how much of a financial interest each person has in the home in the event of a split-up, which could lead to the home being sold or one person offering to buy out the other.

Every article I’ve come across on the subject agrees with this assessment. Before you go in together on real estate, work with a lawyer to lay out what your individual and joint responsibilities will be, and how you will deal with this asset if one of you either moves out or, eek, dies. Will you be joint tenants, which is to say, equal owners? Or will you one of you be the sole owner? What rights will each of you have to equity as it builds?

The Mortgage Reports suggests two contracts, a cohabitation agreement and a property agreement, and also two lawyers:

The Cohabitation Agreement is a document which describes each person’s financial obligation to the home. It should include details on which party is responsible for payment of the mortgage, real estate taxes and insurance; the downpayment made on the mortgage; and necessary repairs.

It will also describe the disposition of the home in the event of a break-up or death of one party which, unfortunately, can happen.

The second document, the Property Agreement, describes the physical property which you may accumulate while living together, and its disposition if one or both parties decide to move out.

A well-drafted Property Agreement will address furniture, appliances, plus other items brought into the joint household, and any items accumulated during the period of co-habitation.

It’s permissible to have a single real estate attorney represent both parties but, for maximum protection, it’s advised that both buyers hire counsel separately. This will add additional costs but will be worth the money paid in the event of catastrophe or break-up.

Catastrophe or break-up is a bit of a theme, if you do a lot of internet research into the question of whether buying a house with your significant other is a wise idea. Your credit can take a hit because of the actions of your partner, warns one lender. “The best advice is probably to wait until you are married,” advises the Realty Times. Here are “three reasons not to buy a home with your honey before you’re married,” courtesy of Your Tango.

“Bullshit,” says personal finance blogger Emma Lincoln, who offers a fun and instructive account of her own adventures in non-marital home-buying. Her relationship didn’t last, but the house did, and she regrets nothing.

Is this something you’ve tried, or are considering trying? Feel free to share your cautionary and/or inspirational tale!

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