what to know when co-buying property

Are you interested in co-buying a property?

Whether you are a group of friends purchasing a vacation home, a multigenerational family, or are looking for a large residence, co-ownership has many advantages. 

If you’re thinking about buying a home with a group, you probably have some questions about the process.

Keep reading if you want more information about co-buying a property.

co-buying basics

Buying a home as a group is more common than you may think.

In recent years, there’s actually been a rise in interest in communal living as both home prices and interest rates skyrocket. 

Here are some frequently asked questions people have when buying a home as a group:

can people in a polyamorous relationship or throuple legally buy a house together?

Yes, polyamorous buyers in a relationship with more than one person can absolutely buy a house together.

In fact, having more people on your loan can help you get approved for a larger mortgage. 

how many people can legally buy a house together in maryland?

In Maryland, there is no limit to the number of people that can be on a deed.

does it matter if anyone in your group is married or not?

Yes, in terms of the deed.

There are some automatic property rights granted to spouses.

However, if you’re interested in a communal living situation that levels the playing field, there are options to override those terms as long as you do it at the time of purchase.

In real estate, the terms of co-ownership are defined in the deed at time of purchase, so it’s important to have an understanding of how co-ownership works.

defining terms of co-ownership

There are three basic forms of co-ownership in real estate: 

• Tenancy in common
• Joint tenancy
• Tenancy by entirety

These forms of co-ownership are controlled by state law, but can vary by jurisdiction.

Let’s look into these a little more:

tenancy in common

Tenancy in common is a type of ownership that preserves the rights of the individual with separate interests.

In this type of ownership, the co-owners are entitled to own the entire property and must hold equal shares unless otherwise stated. 

How this works in practice is that while you may have a separate bathroom or bedroom, the majority of the residence is considered communal space.

This type of ownership is a good democratic model if you’re looking to level the playing field. 

But what happens if one of the homeowners dies when the property is owned equally?

Let’s look at this scenario more closely. If a co-owner dies:

• No individual member can sell the entire property without consent from the other co-owners
• Every co-owner of the property is entitled to equal possession of the property unless otherwise stated. 
• If a co-owner passes, the shares of the property owned get distributed according to the co-owners’ will
• Remaining members would have to buy out the interests of the departed member, with the proceeds typically going to the heirs of the late owner

This is a good option for a thoughtful group of people who want to purchase a residence but maintain the value of their individual investment. 

joint tenancy

Joint tenancy is similar to tenancy in common in that a group buying a house has equal rights to the property. This means they are responsible for only their share of taxes, mortgage, insurance, etc.

However, what happens in the event of a co-owner passing or leaving is different.

With this type of ownership, the surviving members absorb the interest when one of the members dies.

The last survivor has all the rights of sole ownership, including the right to pass the property to any heirs.

tenants by entirety

This type of deed structure is ownership by married couples where spouses have equal, undivided interests in the property.

Early common law viewed a married couple as one married person, so usually there’s no right to divide the property. One spouse can’t pass a 50% interest to someone else.

With tenants by the entirety, owners have the right to pass their property to any heirs and the last survivor is given total ownership of the property.

finding an inclusive realtor

The Realtor you work with can have a major impact on the tone and success of your home-buying journey. It’s important to work with someone who’s not judgemental of your relationship and the criteria you use to buy a home.

But how do you find a Realtor you trust?

Here are some things to consider:

fair housing laws prohibit discrimination based on the nature of your relationship

If you’re in a polyamorous relationship, Realtors legally cannot discriminate against you based on your relationship status. 

There are many legal protections under federal and state housing laws in Maryland and beyond. Discrimination is illegal based on color, family status, ancestry, disability, race, religion, sexual orientation, gender, beliefs, age, marital status, and source of income.

A Realtor cannot discriminate against you based on your household structure. 

If you’ve experienced housing discrimination in Maryland, you can review your options with the Maryland Commission on Civil Rights.

do you have to disclose the nature of your relationship with the people you’re buying a house with?

You don’t have to disclose your relationship to the seller or with your Realtor. 

If you are getting a mortgage, the lender will need to understand whether anyone in your group is a dependent or married. The title company will also need to know about the nature of your relationship to make sure they’re creating the correct deed (type of ownership) at time of purchase.

Keep in mind Realtors may need clarification on who they’re representing, specifically, who the decision makers are.

It’s not uncommon in a couple for one person to be solo on a mortgage and two people to appear on a deed, but that’s a decision that could be based on credit. So, while the Realtor is loyal to all parties, the lender might only require documentation from one.

working with the right realtor

The best Realtors will support your vision and be on your side 100%. They’ll understand that buying a home is an impactful, personal decision that requires support.

guerilla has been helping group home buyers since the company’s inception. Our polyamorous clients can be more guarded with their personal details at the beginning of the process, but we strive to earn their trust as we do with all our clients.

We are networked with lenders who support many different household structures and title companies committed to professionalism and inclusivity.

guerilla has always been committed to providing an individualized, welcoming experience so you find your ideal home.

Ready to take the next step in your home buying journey?

Reach out to us today to schedule a free real estate consultation.