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Advice for co-buying success

Wednesday, 25 April 2007 12:00 AM

House hunters considering getting on the property ladder by co-buying are being given key advice by a leading property website.

SmartNewHomes.com says the key consideration for buyers thinking about the more affordable option of investing in a share of a home rather buying a property outright should be keeping to the rules.

It is essential that all the parties involved in the co-buy are aware of the legal implications before entering into the house buying process, SmartNewHomes advises.

"Buying with a stranger is proving an increasingly popular way for young buyers and would-be investors to get onto the property ladder or extend their existing portfolio," commented David Bexon, SmartNewHomes managing director.

"While for some it may still seem a relatively unconventional way of buying a property, for those who are struggling to find sufficient funds alone this offers a great solution.

"In fact, there are a number of advantages of buying with a stranger. Unlike when buying with existing friends, when purchasing a property with a stranger a lot more information is agreed upfront - everyone tends to be much clearer about the long term plans and aspirations of all involved and terms are set out from the offset.

"When proper legal advice is sought and followed then co-buying can be very successful for all involved."

SmartNewHomes advice for co-buying property

  • Discuss in detail what you are looking to gain from the shared-buying relationship, how long you are looking to own the property for, and what your plans are for the future.
  • When you start the search for your home with your co-buyers, it is essential you all agree how any initial costs will be split. These include such things as legal fees, mortgage arrangement fees and survey costs. This will reduce stress and save time later.
  • You need a Declaration of Trust (also known as a Deed of Trust) to co-buy. This is a document between the buyers that is signed at the exchange of contracts, setting out legal rights over the property. These include what percentage of its value you each own, how the major costs of ownership are to be split and how the relationship between buyers will end.

For more shared-property ownership advice and to search for other co-buyers see www.smartsharedhomes.com

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