Buying a home together is a big decision and an even larger investment. The co-buying process involves many moving parts, steps, and people. But it’s not only about a transaction. The day you close on a joint home purchase, co-ownership begins. Much is at stake—money, relationships, time, and energy.

The potential financial and social upside are considerable, but co-buying and co-ownership are challenging to execute successfully.

A concept developed in 1955 called the Johari Window is helpful here. It teaches us that there are things we know that we know (known-knowns) and things we know we don’t know (known-unknowns). But there are also unknown-unknowns—things we don’t even know we’re unaware of. As we explore the complex process of co-buying a home together, we’ll move as much as possible into the realm of known-knowns.

This course aims to provide you with the knowledge and tools to navigate the co-buying process successfully.

Before we begin, let’s define a few key terms.

Key Terms

Here are several key terms we’ll use throughout this course:

A co-buyer is someone who buys a home with a friend, relative, or partner who is not their spouse.

Co-buying is the process of buying a home as co-buyers, which is structurally unique and considerably more challenging than the traditional homebuying process.

A co-owner is someone who shares ownership interest in a home with anyone to whom they are not married.

‍Co-ownership is homeownership that involves co-owners—also referred to as shared homeownership or joint homeownership.

A co-buyer group or co-owner group refers to friends, family members, or couples buying a home together or who co-own a home. This may include two people or more.

We use standard terminology for well-established terms related to traditional real estate, mortgages, and property. Otherwise, we do our best to steer clear of jargon.

You can find a comprehensive list of terms in the Glossary.

☝️ Heads up
‍
For co-buying and co-ownership, we use terminology developed at CoBuy. Many media outlets, traditional real estate platforms, and even governments have adopted our definitions, but not everyone.

Some sources use (and misuse) terms like shared equity, shared ownership, fractional ownership, and others. Often, these refer to ownership models where a corporation or an investment firm takes an equity position in your home, either outright or through a funky legal structure. We suggest caution. Many of these models leverage information asymmetry and do not align incentives.

Who Should Take This Course?

This course is intended for co-buyers of residential homes (1 - 4 units) in the US. We’ll focus on situations involving properties that will serve as primary residences, secondary homes, or vacation homes. That said, many of the principles are broadly applicable to other cases.

What You’ll Gain From This Course

Outcomes

This course is for the real world. By the end, you will be in a solid position to:

1. Make progress in your co-buying journey, equipped with knowledge and an action plan or
2. Confidently decide that co-buying and co-ownership aren’t a great fit for you now, or ever.

Delivery

We focus on the practical aspects of co-buying and co-ownership gained from our professional experience working with thousands of co-buyers and co-owners and our personal experience on your side of the table.

You’ll progress through self-contained sections that you can tackle at your own pace. We’ve condensed the information and process that we have used to great effect with CoBuyers over the years, adding:

• Pro tips from the field
• Insights related to everyday common challenges and mistakes, and corresponding solutions
• Section reviews to reinforce the material
• Tools, templates, and checklists to support your co-buying journey

Suggestions For This Course

Everyone learns differently, but we’ve seen some common threads over the years.

1. Write things down if it helps you learn. For many folks we’ve worked with through our platform, at events, and on webinars, writing some things down improves retention.

2. Get everyone involved. Most co-buy groups, big and small, include one person who takes the lead on driving things forward. But getting all participants involved at every stage of the process is important. When everyone participates, there’s stronger momentum, less friction, and better communication. You help each other. Questions and concerns surface before they become problems. It’s also a great way to build confidence and decide if moving forward is a good idea.

3. Use the tools and templates. Getting multiple people on the same page is tough in any circumstance. In this context, we’re dealing with large sums of money, emotion, and complexity. Using these tools and templates promotes action, dialogue, and transparency between co-buyers.

4. Share the outputs from the tools and templates with your Loan Officer and RE Agent. These people work for you, but when you minimize their workload and provide them with relevant info, it benefits you. You’ll reduce execution risk, receive greater mindshare, and get better results.

Co-buying Pro Tips

We’ll share plenty of pro tips in the appropriate sections. A few deserve to be covered early.

• Group size: Groups of 2-4 co-buyers (not including children or renters) tend to work best. That’s not to say larger groups don’t work! Groups of 6 or more co-buyers will likely face challenges in the mortgage loan process with a conforming or conventional loan. We’ll go into more detail later.
  

• Process: Follow the process. Skipping steps or taking a DIY approach doesn’t work. Groups who don’t follow the process generally either (i) spend months or years in a do-loop, (ii) give up, or (iii) create problems that materialize down the road.

• Deal heat: Fight the natural urge to rush because of the excitement in the moment. Rely on preparation, fundamentals, and logic to guide your decision-making in a large, multi-party asset purchase.
  

• Expectations: Calibrate your expectations from emotive to rationale, if and when necessary. Many folks form and hold on to irrational expectations during the homebuying process, which leads to poor decision-making, stress, and disappointment. Again, proper research and planning are the best controls.
  

• Transparency: Be transparent with your co-buyer(s), financial institutions, and the IRS. Not only will you save time, money, and stress, but the consequences of not being transparent are ugly. Information tracking has improved dramatically in recent years, and you do not want to invoke transfer taxes or mortgage loan violations unwittingly. Likewise, treat any signs of lack of transparency as red flags.
  

• Selecting professionals: Be selective and carefully vet any professionals you choose to work with, including your Loan Officer, RE Agent, and others. You’re entrusting your deal team of professionals to assist you with a complicated transaction, and you don’t want to make selections based purely on vanity metrics or personal relationships. Choose the best folks for the job.
  

• Over-relying on professionals: Even the best Loan Officer, Real Estate Agent, Attorney, and CPA do not share your long-term interests. Be stringent in selecting who you work with, but also remember that co-ownership extends beyond the purchase transaction. Many of the decisions you make and the responsibilities you create extend past your engagement with any professional service provider. Plan accordingly.
  

• Documentation: In all things financial, if it is not in writing, it does not exist! Treat this as a universal rule before, during, and after your purchase. Verbal agreements can’t be relied on in numerous scenarios. Things don’t have to blow up between you and your co-buyer(s)/co-owner(s) for lack of proper documentation to result in headaches, expenses, or worse. Get everything in writing.

• Becoming a co-owner without co-buying: If you inherit ownership interest in a jointly-owned property or want to “buy in” to an existing homeownership/co-ownership arrangement, it is best to treat changes in the ownership as a formal transaction. If the property has an outstanding mortgage, contact the lender before making any changes to avoid triggering a due on sale clause.
  

One Last Thing

We strongly recommend that you and your co-buyer(s) complete the entire course before you start your co-buying process.

Knowledge is power, and more is better.