Buying A Home With A Partner....

Living Together

Many single people purchase their first house with a friend; both parties can benefit from the investment in homeownership and reduce the financial burden and risk. Friends who buy houses together need to legally protect themselves from life's changes. They may not be friends forever; one person may need to move away for marriage or other reasons, so before friends buy together, they should visit an attorney together to write a property agreement.

For tax reasons, it is important to keep good written records about who came up with the downpayment, who makes the monthly payment and who pays for upgrades and repairs, or how all the financial obligations to owning a home are split between the owners.

Just because you are not married does not mean you can't go through the same headaches as married couples who divorce. If you decide ahead of time how you will handle a break-up and put that in your property agreement, you may save yourself a lot of arguing and attorney fees if a break-up occurs.

You may decide that if either one of you wants to sell, the other has 60 days to get a mortgage to buy out the other person's half of the house. If you disagree about the value of the house, each of you can hire an appraiser and you can average the two appraisers' estimates of your home's value.

If you and a friend are joint tenants and the other person dies, you get the house. If you are tenants in common, the partner can Will half the house to someone else – someone who may force you to move out and sell the house.

You can Will each other a life tenancy, so that your partner's heir has to wait until you both die to collect the inheritance. Make sure you know what happens if you both die and you Will the property to different people. And while joint tenancy may help keep probate costs down, you may still owe state or federal taxes after the death of your house partner.

In a handful of states, registered domestic partners automatically inherit, but having a Will or a living trust is a surer bet. Other states allow community property, where you each own half the house and your Will says what happens to your half when you die.