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If you’re thinking about buying a home with someone you’re not married to, you’re far from alone. Recent study found that about one in three Americans bought a home with someone other than a spouse, and most Americans are considering buying a home with a loved one, friend, or family member.

Some of these changes may be related to a broader change in people’s attitudes towards marriage. AT 2020the marriage rate in the United States was 5.1 per 1,000 compared to 9.8 per 1,000 in 1990. There is also the changing financial reality of homeownership. National Association of Realtors® calculates buying a home is now 55% more expensive than just a year ago.

And while there are many good reasons why you should consider buying a house with a friend, there are also a few reasons why you should think twice before sharing a mortgage with someone.

We reached out to experts to find out which boxes you should check before signing the dotted line with your best friend.

1. Put it in writing first

To protect your profits and your relationship, cover all aspects of any real estate agreement.

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Agree with friends and family about relative merits Lady GagaPickles and a gas barbecue can be a great basis for building a relationship compared to a charcoal barbecue, but shared tastes and interests don’t mean you’ll have the same approach to finances.

To protect your profits and your relationship, describe every aspect of any real estate agreement, from purchase to sale, in writing with your guarantor before even bidding on a house. The process of creating an agreement will most likely teach you a lot that you didn’t know about your friend.

“You want to put absolutely everything in writing from the very beginning,” says Kurt Gross, real estate agent at Realty One Group in Las Vegas. “You want to know how everything will work, down to the smallest details. What if someone wants to rent out their half of their garage or part of their house? Who pays for the maintenance of the property, and is everything divided equally? What happens if a major overhaul is required and one party cannot pay?”

Have a lawyer review your written agreement in its entirety for anything you may have overlooked and make sure it is legally binding.

Bill Samuela Chicago developer from Blue Ladder Development offers to open a joint bank account.

“You need to get a shared spending account and make regular and equal contributions to it,” says Samuel. “That, and also having a clear plan in advance showing how expenses will be handled, is very important if you want to avoid problems in the future.”

2. Have a final budget and stick to it.

Sticking to a budget is important if you’re buying a house with someone you’re not married to.

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Before you start looking for a home in earnest, you should have a budget and a maximum amount that you agree not to exceed under any circumstances.

Glenn Brunker, president of Ally Home in Detroit, says the budget should include not only how much home you can afford, but how you will manage the additional costs associated with buying a home, such as closing costs, taxes, attorneys’ fees , utilities, maintenance. , and more. Ideally, the division of these costs should be documented in writing to avoid any future conflicts as a result of planned or even unforeseen expenses.

“Preparing and following a budget is very important if you are buying a house with someone you are not married to,” says Kim Chan, founder and CEO of DocPro. “It is important to agree on scenarios where one co-owner cannot afford to cover the agreed costs, and what happens if one of the participants refuses to honor the agreement.”

Chan also recommends reducing personal risk by purchasing mortgage insurance.

3. Set how the property will be called

Joint tenancy and joint tenancy with the right to inherit are two types of joint ownership.

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“There are two types of co-ownership where you buy and share a house with a person,” says Teresa Raymond, broker of Smokey Mountain Realty in Tennessee. “A joint lease allows you to share ownership of a property for whatever reason that makes the most sense. If one partner contributes most of the down payment, he can own 70% of the property, while the other party can own 30%.

But in such an agreement, if one of the participants dies, his share does not immediately pass to another co-owner. Instead, it will become part of their property, Raymond says.

“Leasesharing with inheritance is easier,” says Raymond. “This usually happens if you are going to divide the ownership of the property equally. When one party dies, the other party inherits its share.”

4. Hard Talk: Death and Exit Strategies

It’s hard to imagine the end of a relationship before it even started, but it’s wise to discuss the topic before buying a house with a friend.

Melanie Hartmann, owner of Creo Home Buyers in Maryland, brings up a few questions you should ask yourself and each other: “If one person wants to move, will another person buy them out? Do you ultimately want to rent out your house? Or would you rather end up selling and splitting the proceeds?”

Most problems can be avoided with honest conversations and clear contractual agreements that establish who covers what and when, what happens if one person’s financial situation changes, and, in the worst case, who will inherit the property if one person dies.

This is not funny talk. But if you want reality to live up to the dream of buying a house together, they are essential.

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