What You Should Know About Buying a Home Together
With changing interest rates, rising costs of living, and a bad outlook for the economy, many South Africans think that the best way to get into the property market is to share the costs.
Married couples might buy something together. Prenuptial agreements address unanticipated events. When friends, siblings, parents, and children, or unmarried couples, form a plan like this, a good contract is just as vital to cover all possibilities.
We shouldn’t feel secure because we’re related or in love with our buying partner. Life can change one or both partners’ situations at any time.
Life happens, and we need to be realistic about making a partnership agreement that protects both sides.
But not all parties are always the same. Depending on the person and circumstances, this might be 50/50, or each partner could provide more or less.
Partners who buy a house together can pool their salaries or contribute according to their incomes. As long as each applicant has solid credit, banks will give multiple mortgages for the same home.
Discuss opening a joint bank account for bond payments, insurance and rates, taxes, and mortgage payments at the start. When done effectively, a joint account can make expense splitting and tracking easier and fairer. It’s also a good strategy to save for an emergency or home repair.
What else should we consider and include in our agreement before placing an offer on a home with someone else besides payment?
Who contributes?
From the deposit to their share of payments, running costs, etc., everyone should know how much they own. Who brings what furniture? The offer to acquire and, more crucially, the title papers should list each person’s shareholdings. Selling the house will be easy. It’s important to know that if the shares only go into one person’s name, a lawyer will have to do the work, which will cost money.
However, you and your co-owner are equally liable for paying the monthly bond payment, regardless of property ownership. As banks require, you and your partner are each responsible for your share of the loan amount.
Broken agreement
Before buying, consider selling. This may be a mutual decision, but it could also happen if one person in a non-romantic partnership meets someone, gets a new job and needs to move, or is laid off and can’t pay. The contract should state how you’ll exit the partnership and split the selling proceeds. Real estate investments are long-term, so plan ahead. Thus, plan your escape.
Choosing
If you will live in the house together, consider how significant decisions will be made between buying and selling. Improvements, decorating, and rules for shared spaces like kitchens and toilets are examples.
These factors may make buying a house with someone difficult. It’s a terrific way to start in real estate and use two incomes to go ahead if you think and act correctly.
Joint purchases done well can help more people buy homes. It boosts the economy and expands the housing market. Everyone wins when buyers carefully choose their spouses and properties.