{"id":23076,"date":"2023-12-21T15:53:05","date_gmt":"2023-12-21T15:53:05","guid":{"rendered":"https:\/\/www.anthonydidonato.net\/wordpress\/?p=23076"},"modified":"2023-12-21T15:53:05","modified_gmt":"2023-12-21T15:53:05","slug":"buying-with-friends-a-legally-complicated-transaction","status":"publish","type":"post","link":"http:\/\/www.anthonydidonato.net\/wordpress\/buying-with-friends-a-legally-complicated-transaction\/","title":{"rendered":"Buying With Friends: A Legally Complicated Transaction"},"content":{"rendered":"\n<p>What you should know about working with clients who choose this unusual avenue to homeownership.<\/p>\n\n\n\n<p>A small but growing share of home buyers is forging an alternative path to homeownership that is ripe for potential legal consequences: purchasing a property with friends. With affordability near an all-time low, it\u2019s easy to see why some consumers, unattached to family or a partner, would consider such an arrangement prudent. However, these transactions likely will introduce legal issues you wouldn\u2019t typically have to address with clients who are married or buying with family members.<\/p>\n\n\n\n<p>You may not be seeing the trend of friends purchasing homes together in your neck of the woods just yet. There\u2019s a likelihood, though, that you will soon. Only 2% of buyers in 2018 described themselves as \u201cother,\u201d meaning they could be in an unmarried romantic relationship or an alternative family relationship, says Jessica Lautz, vice president of demographics and behavioral insights at the National Association of REALTORS\u00ae. \u201cMarriage rates in the United States have dropped while, at the same time, home prices have increased, so buyers are finding unique ways to enter homeownership,\u201d Lautz says. One result of this trend, she adds, is the share of unmarried couples purchasing homes with roommates is increasing.<\/p>\n\n\n\n<p>While the process of buying a home with friends is similar to purchasing with a partner or alone, there are specific aspects of this type of sale on which you, as the real estate professional, should be able to offer guidance. \u201cThe most important thing is for the friends to be on the same page on legal issues and to have everything in writing,\u201d says NAR Senior Counsel and Director of Legal Affairs Chloe Hecht.<\/p>\n\n\n\n<p>The major issues that could have legal implications include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>How will the down payment be split?<\/strong><\/li>\n\n\n\n<li><strong>In whose name will the mortgage be?<\/strong><\/li>\n\n\n\n<li><strong>How will the title be held?<\/strong><\/li>\n\n\n\n<li><strong>Will the ownership stake be equally split?<\/strong><\/li>\n\n\n\n<li><strong>How will decisions be made about repairs and improvements?<\/strong><\/li>\n\n\n\n<li><strong>How can one of the owners exit the partnership?<\/strong><\/li>\n\n\n\n<li><strong>What happens if one of the owners passes away?<\/strong><\/li>\n<\/ul>\n\n\n\n<p>\u201cIt\u2019s also important to understand how your state\u2019s laws could impact the partnership,\u201d says Hecht, who recommends consulting with a real estate attorney to ensure the buyers have a comprehensive agreement about the joint purchase.<\/p>\n\n\n\n<p>The piece of the puzzle that may cause the biggest legal concerns is the plan for transferring ownership in the event one friend wants to exit the partnership. \u201dThe parties may want to consider allowing the person who is staying a right of first refusal to purchase the other person\u2019s interest in the property they jointly own,\u201d Hecht says. \u201cRelated issues to consider are how the parties will determine a fair market value for the house and what happens if the person staying can\u2019t afford to purchase the other\u2019s interest in the house.\u201d<\/p>\n\n\n\n<p>Beyond legalities, the decision-making process also may be trickier between friends than partners or family members, says Stacey Schalk, associate broker at Berkshire Hathaway HomeServices in Northglenn, Colo. Couples, for example, usually have a firmer understanding of what they want in a home, while friends may need more time to come to an agreement, she adds.<\/p>\n\n\n\n<p>In cases of friends purchasing together, Schalk recommends sitting down with the buyers to firmly establish what\u2019s important to them in a home, including which spaces they\u2019re willing to share, such as the kitchen, family room, and outdoor area. Friends may also need help figuring out how to equitably cover utility bills, maintenance costs, and expenses for common home goods. Shalk says that while it\u2019s exciting to consider living with your best friends, practitioners need to look beyond their clients\u2019 initial enthusiasm about such an arrangement to figure out what the friends really require in their spaces.<\/p>\n\n\n\n<p>Some real estate professionals have been on the consumer side of a transaction with friends and struggled with the process. Daniele Kurzweil, a sales associate with Compass in New York, says she was a silent partner when she bought a single-family home that was converted into a two-family home with two of her friends in 2011. Kurzweil says she was confident she was making a solid investment but left specific decisions, such as the location and finishes of the home, up to her friends. Kurzweil contributed to the process by helping her friends understand the types of renovations they should undertake versus a major project. \u201cI trusted that my friends would make the right decisions. Had I tried to get involved, it would have been a distraction, and nothing would have gotten done,\u201d Kurzweil says, describing the transaction as having \u201ctoo many cooks in the kitchen.\u201d<\/p>\n\n\n\n<p>Kurzweil and her friends didn\u2019t draw up legal documents describing their ownership stake in the property, though they have since formed an LLC and are figuring out how to clear legal hurdles as they go. Kurzweil says she wouldn\u2019t advocate a property purchase with a friend before asking yourself a few questions:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Would you trust your friends to do the right thing, with or without a legal document? (Spoiler: You should always have a legal document in place when purchasing with friends.)<\/li>\n\n\n\n<li>If, for some reason, you were unable to make a decision regarding a problem with the property, would you trust your friends\u2019 judgment?<\/li>\n<\/ul>\n\n\n\n<p>\u201cIf your answer to either of these questions is no, then making it legal with a contract won\u2019t change things,\u201d Kurzweil says.<\/p>\n\n\n\n<p>None of this is to say that buying a home with friends is necessarily a bad idea. But the possible legal and personal ramifications cannot be understated, says Jake Lizarraga, a writer for <a href=\"https:\/\/www.reits.org\/\" target=\"_blank\" rel=\"noreferrer noopener\">REITS.org(link is external)<\/a>, a website dedicated to helping people understand real estate investment. \u201dFor those who don\u2019t qualify for a mortgage on their own, it\u2019s a great idea,\u201d he says. \u201cFor those who wish to keep a friendship, not so great.\u201d Lizarraga likens buying a home with friends to going into business with friends: The individuals must agree on a vision moving forward for the arrangement to work. However, it\u2019s likely with friends that, eventually, they\u2019ll have different visions\u2014which can sour the relationship quickly. Then again, it\u2019s always possible that a home purchase with friends can lead to a lifelong partnership.<\/p>\n\n\n\n<p>\u00a9National Association of REALTORS\u00ae<br \/>Reprinted with permission<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What you should know about working with clients who choose this unusual avenue to homeownership. A small but growing share of home buyers is forging an alternative path to homeownership that is ripe for potential legal consequences: purchasing a property with friends. With affordability near an all-time low, it\u2019s easy to see why some consumers, &hellip; <\/p>\n<p><a class=\"more-link btn\" href=\"http:\/\/www.anthonydidonato.net\/wordpress\/buying-with-friends-a-legally-complicated-transaction\/\">Continue reading<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,8],"tags":[5,32,4,9],"class_list":["post-23076","post","type-post","status-publish","format-standard","hentry","category-news","category-real-estate-tips","tag-anthony-didonato","tag-news","tag-real-estate","tag-tips","item-wrap"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Buying With Friends: A Legally Complicated Transaction - Real Estate Agent and Sales in PA - Anthony DiDonato Broomall, Media, Delaware County and surrounding areas in Pennsylvania<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/www.anthonydidonato.net\/wordpress\/buying-with-friends-a-legally-complicated-transaction\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/buying-with-friends-a-legally-complicated-transaction\\\/#article\",\"isPartOf\":{\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/buying-with-friends-a-legally-complicated-transaction\\\/\"},\"author\":{\"name\":\"admin\",\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/#\\\/schema\\\/person\\\/964792b6994e8cc4cbddc36ad4824908\"},\"headline\":\"Buying With Friends: A Legally Complicated Transaction\",\"datePublished\":\"2023-12-21T15:53:05+00:00\",\"mainEntityOfPage\":{\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/buying-with-friends-a-legally-complicated-transaction\\\/\"},\"wordCount\":1065,\"publisher\":{\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/#\\\/schema\\\/person\\\/964792b6994e8cc4cbddc36ad4824908\"},\"keywords\":[\"Anthony DiDonato\",\"News\",\"Real Estate\",\"tips\"],\"articleSection\":[\"News\",\"Real Estate Tips\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/buying-with-friends-a-legally-complicated-transaction\\\/\",\"url\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/buying-with-friends-a-legally-complicated-transaction\\\/\",\"name\":\"Buying With Friends: A Legally Complicated Transaction - 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Skilled, smart and enthusiastic about his work and his life, Anthony DiDonato has the appealing combination of business sense and people skills gives him an edge in an industry that demands both. Educated at Drexel University with a dual major in accounting and finance and minors in management and psychology Anthony DiDonato offers over 25 years of experience in the real estate industry. He has been a real estate investor since 1985 and a member of H.A.P.C.O. (Landlord Association). He became a licensed Realtor in 1992 and a member of the Local, Pennsylvania and National Associations of Realtors. Anthony DiDonato is also a member of the Computerized Multiple Listings, (MLS) and Internet Marketing Programs. In 1997 Anthony DiDonato became Century 21 All-Elite, Inc. Corporate Secretary. Anthony DiDonato believes in taking his profession to the highest level of quality service. He is known for finding that \u201cperfect\u201d property in Philadelphia, Delaware County, Chester County, Montgomery County and surrounding areas in Pennsylvania for his buyers and helping his sellers prepare their properties so they sell quickly and efficiently. When it comes time to negotiate the terms of a contract, Anthony DiDonato has the knowledge, experience, and professionalism applied to meeting \u2013 or exceeding \u2013 his clients\u2019 expectations. His service to his clients is second to none. His honesty and integrity have been his claim to fame. For Superior Real Estate Representation in the Delaware Valley, Philadelphia, Delaware County, Chester County, Montgomery County and surrounding areas in Pennsylvania\u2026 call Anthony DiDonato.\",\"sameAs\":[\"http:\\\/\\\/www.anthonydidonato.net\"],\"url\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/author\\\/admin\\\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Buying With Friends: A Legally Complicated Transaction - Real Estate Agent and Sales in PA - Anthony DiDonato Broomall, Media, Delaware County and surrounding areas in Pennsylvania","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"http:\/\/www.anthonydidonato.net\/wordpress\/buying-with-friends-a-legally-complicated-transaction\/","twitter_misc":{"Written by":"admin","Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"http:\/\/www.anthonydidonato.net\/wordpress\/buying-with-friends-a-legally-complicated-transaction\/#article","isPartOf":{"@id":"http:\/\/www.anthonydidonato.net\/wordpress\/buying-with-friends-a-legally-complicated-transaction\/"},"author":{"name":"admin","@id":"http:\/\/www.anthonydidonato.net\/wordpress\/#\/schema\/person\/964792b6994e8cc4cbddc36ad4824908"},"headline":"Buying With Friends: A Legally Complicated Transaction","datePublished":"2023-12-21T15:53:05+00:00","mainEntityOfPage":{"@id":"http:\/\/www.anthonydidonato.net\/wordpress\/buying-with-friends-a-legally-complicated-transaction\/"},"wordCount":1065,"publisher":{"@id":"http:\/\/www.anthonydidonato.net\/wordpress\/#\/schema\/person\/964792b6994e8cc4cbddc36ad4824908"},"keywords":["Anthony DiDonato","News","Real Estate","tips"],"articleSection":["News","Real Estate Tips"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"http:\/\/www.anthonydidonato.net\/wordpress\/buying-with-friends-a-legally-complicated-transaction\/","url":"http:\/\/www.anthonydidonato.net\/wordpress\/buying-with-friends-a-legally-complicated-transaction\/","name":"Buying With Friends: A Legally Complicated Transaction - Real Estate Agent and Sales in PA - Anthony DiDonato Broomall, Media, Delaware County and surrounding areas in Pennsylvania","isPartOf":{"@id":"http:\/\/www.anthonydidonato.net\/wordpress\/#website"},"datePublished":"2023-12-21T15:53:05+00:00","breadcrumb":{"@id":"http:\/\/www.anthonydidonato.net\/wordpress\/buying-with-friends-a-legally-complicated-transaction\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["http:\/\/www.anthonydidonato.net\/wordpress\/buying-with-friends-a-legally-complicated-transaction\/"]}]},{"@type":"BreadcrumbList","@id":"http:\/\/www.anthonydidonato.net\/wordpress\/buying-with-friends-a-legally-complicated-transaction\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"http:\/\/www.anthonydidonato.net\/wordpress\/"},{"@type":"ListItem","position":2,"name":"Buying With Friends: A Legally Complicated Transaction"}]},{"@type":"WebSite","@id":"http:\/\/www.anthonydidonato.net\/wordpress\/#website","url":"http:\/\/www.anthonydidonato.net\/wordpress\/","name":"Real Estate Agent and Sales in PA - Anthony DiDonato Broomall, Media, Delaware County and surrounding areas in Pennsylvania","description":"Properties and Real Estate for Sale","publisher":{"@id":"http:\/\/www.anthonydidonato.net\/wordpress\/#\/schema\/person\/964792b6994e8cc4cbddc36ad4824908"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"http:\/\/www.anthonydidonato.net\/wordpress\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":["Person","Organization"],"@id":"http:\/\/www.anthonydidonato.net\/wordpress\/#\/schema\/person\/964792b6994e8cc4cbddc36ad4824908","name":"admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"http:\/\/www.anthonydidonato.net\/wordpress\/wp-content\/uploads\/2020\/03\/anthony-110x150.jpg","url":"http:\/\/www.anthonydidonato.net\/wordpress\/wp-content\/uploads\/2020\/03\/anthony-110x150.jpg","contentUrl":"http:\/\/www.anthonydidonato.net\/wordpress\/wp-content\/uploads\/2020\/03\/anthony-110x150.jpg","caption":"admin"},"logo":{"@id":"http:\/\/www.anthonydidonato.net\/wordpress\/wp-content\/uploads\/2020\/03\/anthony-110x150.jpg"},"description":"For all of your Real Estate needs, place yourself in the competent hands of a career Realtor who is a Philadelphia native and Delaware County resident. Skilled, smart and enthusiastic about his work and his life, Anthony DiDonato has the appealing combination of business sense and people skills gives him an edge in an industry that demands both. Educated at Drexel University with a dual major in accounting and finance and minors in management and psychology Anthony DiDonato offers over 25 years of experience in the real estate industry. He has been a real estate investor since 1985 and a member of H.A.P.C.O. (Landlord Association). He became a licensed Realtor in 1992 and a member of the Local, Pennsylvania and National Associations of Realtors. Anthony DiDonato is also a member of the Computerized Multiple Listings, (MLS) and Internet Marketing Programs. In 1997 Anthony DiDonato became Century 21 All-Elite, Inc. Corporate Secretary. Anthony DiDonato believes in taking his profession to the highest level of quality service. He is known for finding that \u201cperfect\u201d property in Philadelphia, Delaware County, Chester County, Montgomery County and surrounding areas in Pennsylvania for his buyers and helping his sellers prepare their properties so they sell quickly and efficiently. When it comes time to negotiate the terms of a contract, Anthony DiDonato has the knowledge, experience, and professionalism applied to meeting \u2013 or exceeding \u2013 his clients\u2019 expectations. His service to his clients is second to none. His honesty and integrity have been his claim to fame. For Superior Real Estate Representation in the Delaware Valley, Philadelphia, Delaware County, Chester County, Montgomery County and surrounding areas in Pennsylvania\u2026 call Anthony DiDonato.","sameAs":["http:\/\/www.anthonydidonato.net"],"url":"http:\/\/www.anthonydidonato.net\/wordpress\/author\/admin\/"}]}},"_links":{"self":[{"href":"http:\/\/www.anthonydidonato.net\/wordpress\/wp-json\/wp\/v2\/posts\/23076","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.anthonydidonato.net\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.anthonydidonato.net\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.anthonydidonato.net\/wordpress\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.anthonydidonato.net\/wordpress\/wp-json\/wp\/v2\/comments?post=23076"}],"version-history":[{"count":0,"href":"http:\/\/www.anthonydidonato.net\/wordpress\/wp-json\/wp\/v2\/posts\/23076\/revisions"}],"wp:attachment":[{"href":"http:\/\/www.anthonydidonato.net\/wordpress\/wp-json\/wp\/v2\/media?parent=23076"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.anthonydidonato.net\/wordpress\/wp-json\/wp\/v2\/categories?post=23076"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.anthonydidonato.net\/wordpress\/wp-json\/wp\/v2\/tags?post=23076"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}