REGION – According to the U.S. Census Bureau, over the past 75 years, the percentage of traditional, married households decreased by more than 30%, from 80% to 50%.
The Pew Research Center (PRC) finds that, “The American family has undergone significant changes in recent decades. There is no longer one predominant family form, and Americans are experiencing family life in increasingly diverse ways.”
In 1970, 67% of Americans ages 25-49 were living with their spouse and one or more child under 18. Over the past five decades, that number has dropped to 37%. PRC cites several factors that have contributed to this decline, including that Americans are marrying later in life, or not marrying at all.
As the composition of the American family shifts, so do the demographics of the people combining resources to secure part of the American Dream – home ownership.
Seniors looking to downsize can benefit by cohabitating with a friend or relative, offsetting expenses and sharing chores. Gen Z are perhaps the group most open to cobuying a home with a friend, according to a Newsweek article published earlier this year.
However, there are always risks involved with copurchasing a home, as Hannah Workman from JW Surety Bonds told Newsweek. “Before entering into a cobuying partnership, a clear legal agreement should be put in place that spells out exactly what happens if someone stops contributing to their side of the deal. This agreement should also include how mortgage payments, property taxes, insurance, and maintenance costs will be split, and what happens if people want to exit the partnership.”
Each party should be clear about their expectations from the outset, and determine if costs will be split equitably rather than equally, based on income and other expenses. Some first-time cobuyers will agree to commit to the property for a period of five years or less, at which time an agreement can be extended, or the home could be sold, with the increased equity split between cohabitants who can then move ahead with a solo home purchase.
CoBuy (www.cobuy.io), a website and app developed to guide potential homebuyers with a nontraditional group of investors into the shared purchase of a property, began after its founders struggled to buy a home as nonmarried family members. Staffed by a group of builders, finance, and real estate experts, CoBuy has helped thousands of cobuyers become homeowners since 2016.
“We decided that we had to do something. Homeownership is the foundation for financial stability and security. That’s not to say homeownership is for everyone, but most would agree that buying a home is a life-changing experience. Teaming up can open up a world of opportunities. We wanted to help people build wealth, starting with owning a home.”
“What constitutes ‘family’ today is not what it was when our financial systems were in their formative years. Unfortunately, these very systems ignore how society has evolved through time. Today, folks are buying together for financial and social reasons.”
Profiled in the January Newsweek article written by Alexander Fabino are Kristina Modares and Steph Douglass, founders of Open House Austin, a real estate brokerage specializing in educating and assisting potential buyers in navigating the details of co-ownership.
“Modares and Douglass, 25 and 27, respectively, embarked on multiple co-ownership ventures, investing in four properties and guiding clients through similar processes. Their brokerage became a hub for fostering innovative real estate solutions, empowering clients with knowledge and strategies to make informed decisions in a challenging market.”
“We tell our clients that when you are deciding to partner with someone, you need to make sure this is someone you can have hard conversations with, that they have similar values to you, and that they are good communicators,” Modares stated. “So if things don’t work out (that’s life) then it won’t end in complete disaster.”