In his initial meeting with hopeful home buyers, Mr. Hertz begins with this warning: “If you can’t make it through a two-hour meeting with me discussing the issues, then you shouldn’t be buying a house together.” The idea isn’t to discourage them, it’s to initiate them into their new role as co-owners, a role that will most likely involve long discussions, complex negotiations and emotionally challenging conversations. The kind of questions that Mr. Hertz asks range from the morbid (What happens if one of you dies?) and the aesthetic (How will you make decisions about paint colors and other decorative improvements?) to the familial (How long is a houseguest allowed to stay?).
Some topics to cover are space allocation (Does someone get to have a home office? Does one person get exclusive use of the garage?), landscaping and yardwork (Is one person in charge of the labor and the other person in charge of the cost? Who gets to decide how much to spend on that birdbath?), upgrades and repairs (If somebody tiles the bathroom, do they get reimbursed for their labor? What happens if the furnace breaks and only one person can afford the repair bill?) and rules for houseguests. This is especially important if you’re considering buying a house with a friend who is not a romantic partner. When will a boyfriend or girlfriend stop being an overnight guest and start being treated as a roommate? Are aging family members welcome to live with you? What about children?
These conversations might seem unnecessarily granular but the result is that you and your prospective co-owner will become comfortable discussing difficult topics. “Very few people are self-aware enough to know how they’ll behave as co-owners.” Mr. Hertz said. “Sometimes the best outcome is for both parties to realize they are not a good match as co-owners.”
What happens if the relationship or friendship ends?
Allegra Brantly, 32, an entrepreneur from Austin, Tex., had been dating her boyfriend, Jake, 28, a data scientist, for over a year when they started talking about buying a house together. They had watched housing prices in Austin creep higher as housing prices hit record highs in 2017 and again in 2018.
“We definitely weren’t ready to talk marriage or forever, but we also realized that by the time we were ready to buy a home together, we wouldn’t be able to afford it.” Ms. Brantly said. “The risk of splitting up seemed less than the risk of being out-priced.”
Before they agreed to buy a house together, the couple discussed potential outcomes at length, like what would happen if one of them lost their job and couldn’t contribute to the mortgage payments, or if they broke up. They eventually decided that if their relationship ended, they would both move out and keep the property as an investment, with a property manager doing the day-to-day management.
“Obviously we hope to stay together happily for years, but at the end of the day, our house is an investment and a financial decision, and so no matter what happens with our relationship, we want to preserve our equity.”