The Buddy System

Today’s real estate prices are making it hard enough to purchase property with two salaries, let alone one. So how does a single person buy into today’s market? In many cases, it’s by partnering with a friend or relative.

The first step in entering into what is likely the largest purchase of your life is to sit down with your co-buyer and have a completely honest discussion — no holds barred — about each of your wants and needs, your expectations, and your finances. You can even draft up a list of questions together, then go your separate ways to complete the “survey” before getting back together to compare answers.

Here are some questions you may want to start with:

  • House or condo, and why?
  • Ideal locations and amenities (Parking? Dog parks? Bike paths? Shopping? Public transportation?) that are most important to each of you.
  • Expected size, from an idea of footage to number of bedrooms and bathrooms.
  • What are each of your short-term versus long-term goals? Are you thinking of this property as an investment only, to be flipped after a set period of time? A short-term housing solution until you can afford your own dwelling?
  • Even things that seem like details, but that can cause misunderstandings later are questions like, “Are you a do-it-yourselfer who expects to tackle the home maintenance tasks yourself, or someone who prefers to pay a professional to deal with all repairs and home upgrades?” “How are we going to divide chores?” “What happens if one of us loses our job or becomes ill — should we buy insurance to cover the mortgage payments?”

The financial end of the agreement is a whole separate conversation, which starts with a completely honest disclosure of each of your salaries, credit scores, current debts and financial obligations. From there, make sure you agree on financial points that would include:

  • Expected price point of the property.
  • Amount each of you has to put as a down payment.
  • Understanding of lawyer’s fees and closing costs.
  • Agreement on if you’ll be splitting the cost of the mortgage and expenses 50/50, or if there’s another ratio you’ll be following.
  • Confirmation of maximum budget requirements per month.
  • A review of the expected costs of running a home, from the costs of buying the property (closing costs, legal fees, etc.) to property taxes, utilities and maintenance.
  • When the day comes that one of you wants to pull out of the agreement, you’ll need to talk about how to agree upon a fair ownership split, and the right of first refusal from the remaining owner.

These points are just a start. Make time to meet with both your mortgage representative and real estate representative, and be prepared to ask lots of questions and take lots of notes. Get pre-approved for a mortgage so you know exactly what you can afford, and meet with a lawyer to draft up a cohabitation agreement to clarify the type of agreement you have, complete with financial obligations.
Now the fun part — it’s time to ask your real estate representative to set up home viewings, knowing exactly what features will make both you and your property partner happy!


For more information, contact: