Sponsor Content: Strength in Numbers Through Group Home Buying

34 Windsor Road, Somerville
Photo courtesy of Thalia Tringo Real Estate

Home buying can be daunting and confusing for anyone. Buyers in the Boston area have the added stress of an expensive and competitive market with insufficient inventory to accommodate everyone’s needs. On top of that, buyers and sellers are now dealing with a new set of needs brought on by the global pandemic. The need has increased for more private indoor space for working and schooling at home, as well as for private outdoor space. At the same time, people seek less interaction with those outside their own social/family circle.

Typically, purchasers are couples or single folks. But there are many possibilities for buyers who do not fit the traditional buyer profile. For some, buying a property with another person, couple, or group of people can make the cost more affordable and the process less intimidating. By joining in the purchase with friends, housemates, or family, it can increase your buying power, minimize your risk, and enable you to divide home ownership responsibilities. As a result, more buyers are forming non-traditional groups to reach their goal of home ownership, whether buying a condo, single family, or multi-family.

If you thought you would wait for marriage or children to buy a home and your life took a different course, who can you look to to pool your resources to purchase a property? The possibilities are numerous. You can approach friends, co-workers, couples, and relatives. People in polyamorous relationships in particular have created models for group buying that others can follow.

There are many ways that group buying can help people buy a home that would not otherwise do that. To qualify for most financing, lenders want to see consistent income, good credit scores, and low debt-to-income ratio. Many people are discouraged from buying because they lack one or more of these criteria. If someone with erratic income but a healthy down payment is able to partner with others who have steady income but little or no down payment, they may be able to get a loan together. Some buyers have the skills to renovate and maintain properties but lack the financial means to buy. Others may be qualified to get a loan but lack the confidence or skills to renovate and maintain a home. Together, they may combine financial means and sweat equity to own property jointly.

More funds can help increase the size of the property that can be purchased. Alone, a buyer may only be able to afford a condominium, but by working with others, they may be able to purchase a multi-family home that could have enough units for each party and possibly extra for rental income. In short, you will have the ability to afford more ‘house’ than when buying alone.

By choosing a group to own with, you will be creating your own social bubble. This is not only helpful in the time of COVID, but it also helps you establish a support community for the future. Buying together, you can have a shared love of your chosen building, refurbish or bring an old property back to its glory, develop your own CSA, plant and care for a yard together, making the space truly your own. Ultimately, buying as a group can help you afford a house in an area you want to live in rather than an area you can afford.

The advantages of these arrangements are many. But they also bring up many questions, especially if they are first time home buyers. Where do we start? What type of financing is available? What are the options for taking title (legal ownership)? How do you determine each one’s financial contributions, percentage legal interest in the property, and expense allocation? What kind of arrangements can be made in the event one or more parties want to move on, but others want to keep the property?

We recommend creating a team to help sort through all the questions and the process. Your team should include a local mortgage lender, a real estate attorney, and an experienced real estate agent. Each person will contribute to the entire process in a way to help you successfully reach your goal of finding the right home for you.

If you would like more information about the process, we offer virtual classes here at Thalia Tringo & Associates Real Estate (TTRE) on topics including:

How Individuals Can Buy Property Together as a Group
Next class dates: Wednesday, September 30th or Tuesday, October 20th at 6-8pm
Presented by: Local mortgage lender, attorney, and TTRE agents

First Time Home Buyers
Presented by: Local mortgage lender and TTRE agents
Next class date: Monday, October 5th at 6:30-7:45pm

How to Buy and Sell at the Same Time
Presented by: Local mortgage lender and TTRE agents
Next class date: Thursday, October 15th at 6:30-7:45pm

At each class, we will address the process of buying, where to start, and answer any questions about being a buyer, traditional or non-traditional, in the current real estate market.

Thalia Tringo & Associates Real Estate, an independent agency based in Davis Square