The Five Steps To Co-Ownership

Why The Five Steps?

Our collective experience as a team has taught us that the path to co-purchasing real estate should be completed in five steps in a specific order. When beginning a real estate journey, you may be tempted to jump right ahead and look at houses and begin to envision your dream home. Unfortunately, co-ownership in real estate is a bit more complicated than traditional real estate purchases. The steps need to be done properly and in order.

 

The Five Steps To Co-Ownership

The five steps to co-owning real estate are:

Step 1: Finding Your Purchasing Group

In this step, we will cover the processes for finding and forming your purchasing group as well as covering how to form and build your priorities to better match you with your group. 

Step 2: Building Your Financial Model

In this step, we will cover the financial aspects of preparing your group for real estate purchasing. This includes mortgages and budgets. Get your calculators ready!

Step 3: Creating Your Group Agreement

In this step, we look at creating a group agreement that will be the basis for your co-living arrangements. 

Step 4: Making Your Legal Agreement

In this step, we will go through the process of creating a legal agreement for your group including preparations for many possibilities that can arise. 

Step 5: Finding Your Property

In this step, we will cover how to find your perfect and ideal property as well as tips on zoning, renovations and what to look for in a home. 

But I Want To Look At Houses First…

Finding your property is the last step in this process. Many groups and co-owners want to start their home-buying journey by trying to look at the possibilities. The truth is it is important to build the foundations of your co-ownership purchase and solidify your co-ownership group’s needs, wants and dreams before ever looking at potential homes. 

The process of purchasing is fluid and your group will likely be discussing many aspects of your purchase at once. The steps are here to help prioritize building the relationships between members of your group. By working together through these steps, you will learn about yourself and each other, and be in a better position to determine your co-ownership compatibility. 

We believe that you should always fully explore the living terms of your co-purchasing relationship - both current and future - before any legal or binding decisions are made. 

“Clients are always so anxious to start with houses! But when I sit them down to discuss everything that’s involved, they’re grateful to be prepared.”
— Lesli Gaynor, GoCo Partner

Other posts from The Ultimate Guide to Co-Ownership

Featured
Finding Your Property: Are You Ready To Buy?
Step Five
Finding Your Property: Are You Ready To Buy?
Step Five

Now that you’ve made it this far, let’s talk about what happens when you find a property that you like and that fits your group. Again, the market is competitive so you and your group have to be ready to act fast.

Step Five
Finding Your Property: Let's Talk About Homes and Renovations
Step Five
Finding Your Property: Let's Talk About Homes and Renovations
Step Five

As we said at the beginning of this step, the real estate market is a seller’s market most of the time. In the GTA, that isn’t looking to change any time soon. While there are a lot of different types of properties that your group can look at, you should always keep in mind that supply is limited.

Step Five
Finding Your Property: Your Home Brief
Step Five
Finding Your Property: Your Home Brief
Step Five

Building on your understanding of the needs and wants of each group member, you can begin to create a list of criteria that you are looking for in your co-owned real estate purchase. This Home Brief will help your agent’s guide to finding you a property.

Step Five
Finding Your Property: Setting Yourself Up For Success
Step Five
Finding Your Property: Setting Yourself Up For Success
Step Five

The final step in a co-ownership real estate purchase is to find the perfect property for your group! This step is last because all of the preparation you and your group have done will make this step much easier. So once you are comfortable with your Group Agreement and have worked through your Legal Agreement and budget, you are finally ready to consider properties.

Step Five
Making Your Legal Agreement: Finding a Lawyer and Frequently Asked Questions
Step Four
Making Your Legal Agreement: Finding a Lawyer and Frequently Asked Questions
Step Four

Once you have done the work of determining your legal rights and responsibilities, financial obligations, and future scenarios as a group, we recommend finding a lawyer who has some experience drafting co-ownership agreements. It is essential that your agreement is created with all members of your purchasing group and the contents of any wills or spousal agreements are shared with your lawyer as they prepare your group’s Legal Agreement, so that they align.

Step Four
Making Your Legal Agreement: Future Scenarios
Step Four
Making Your Legal Agreement: Future Scenarios
Step Four

It is impossible to anticipate all future change, and you or members of your group might find yourself in a position of wanting to exit your co-purchasing arrangement. Members of your purchasing group must be in agreement about how and when your property will be divested (disposed of, sold etc.).

Step Four
Making Your Legal Agreement: Financial Obligations
Step Four
Making Your Legal Agreement: Financial Obligations
Step Four

We recommend that you include a schedule for mortgage payments and a clear delineation of other payments, like bills and taxes, in your Legal Agreement.

Step Four
Making Your Legal Agreement: Rights and Responsibilities
Step Four
Making Your Legal Agreement: Rights and Responsibilities
Step Four

Over the next three sections, we will be covering the three important features to include in your legal agreement. Starting now with Rights and Responsibilities!

Step Four
Making Your Legal Agreement: Types of Legal Arrangements
Step Four
Making Your Legal Agreement: Types of Legal Arrangements
Step Four

Generally, there are two types of legal relationships between co-owners: you can buy property as either tenants-in-common or as joint tenants.

Step Four
Making Your Legal Agreement: Introduction
Step Four
Making Your Legal Agreement: Introduction
Step Four

Your legal agreement is an essential part of the co-ownership real estate purchase. It may feel daunting or uncomfortable to discuss certain aspects of your living arrangement through the lens of a legal agreement, but your Legal Agreement is in place to protect you and your group, both individually and collectively.

Step Four
Creating Your Group Agreement: Group Agreement Case Studies
Step Three
Creating Your Group Agreement: Group Agreement Case Studies
Step Three

Finally let’s finish up with some case studies to summarise Step 3 before moving on to Step 4: Creating Your Legal Agreement.

Step Three
Creating Your Group Agreement: Conflict Resolution
Step Three
Creating Your Group Agreement: Conflict Resolution
Step Three

Conflict resolution is an important aspect of co-ownership and collective functioning. Find out the best ways to get through these situations.

Step Three
Creating Your Group Agreement: Communication Is Essential
Step Three
Creating Your Group Agreement: Communication Is Essential
Step Three

Communication is an essential part of a co-ownership agreement. Your group needs to open and honest as well as regular in your frequency when it comes to house meetings and general communication.

Step Three
Creating Your Group Agreement: Collective Decision Making
Step Three
Creating Your Group Agreement: Collective Decision Making
Step Three

There are many models and resources for collective decision making, and we recommend that you determine a decision-making structure with your group early on.

Step Three
Creating Your Group Agreement: Identifying Your Shared Goals
Step Three
Creating Your Group Agreement: Identifying Your Shared Goals
Step Three

It’s important to harmonise and identify your group’s shared goals. This will build the foundation for your group agreement.

Step Three
Creating Your Group Agreement: Getting Started
Step Three
Creating Your Group Agreement: Getting Started
Step Three

It’s time to look at how your group is going to function when living in a co-ownership arrangement.

Step Three
Building Your Financial Model: Summary & Next Steps
Step Two
Building Your Financial Model: Summary & Next Steps
Step Two

Summarize Step 2 and take a look at the final parts to make sure you’re ready for Step 3!

Step Two
Building Your Financial Model: Combine-Leverage-Split
Step Two
Building Your Financial Model: Combine-Leverage-Split
Step Two

Finally, the last piece of your financial puzzle is to assess your ongoing costs using the Combine-Leverage-Split method!

Step Two
Building Your Financial Model: Creating Your Budget
Step Two
Building Your Financial Model: Creating Your Budget
Step Two

It’s Budget Time! Check out the example of the McGill group and create your group budget together!

Step Two
Building Your Financial Model: Get Your Financial Profile Ready!
Step Two
Building Your Financial Model: Get Your Financial Profile Ready!
Step Two

It’s time to get your finances together and create your financial profile! Get together with your group and create a group outline to figure out your buying power!

Step Two
Building Your Financial Model: Who Will Lend To You?
Step Two
Building Your Financial Model: Who Will Lend To You?
Step Two

Now that you’ve completed your crash course on mortgages, it’s time to move on to who will lend to you and how will you convince them to lend to your group.

Step Two
Building Your Financial Model: What's In A Mortgage?
Step Two
Building Your Financial Model: What's In A Mortgage?
Step Two

Mortgages can be complicated. Co-ownership can make the process even more complicated. While it is helpful to have a working knowledge of the basics on mortgages, we’ve compiled a quick crash course aimed at co-ownership.

Step Two
Building Your Financial Model: Introduction
Step Two
Building Your Financial Model: Introduction
Step Two

Now that you’ve got your group together and you’ve decided that you would be a good fit, it’s time to get real about everyone’s financials.

Step Two
Finding Your Purchase Group: Summary And Next Steps
Step One
Finding Your Purchase Group: Summary And Next Steps
Step One

That’s all of step one and finding your purchasing group for co-ownership. This step can take a lot of time depending on a number of factors but, as it is the first step, it’s one of the most important. You need to work hard and dig deep to solidify your purchasing group and ensure the success of your co-ownership purchase.

Step One
Finding Your Purchase Group: Sketching Your Ideal Home Together
Step One
Finding Your Purchase Group: Sketching Your Ideal Home Together
Step One

Now that you have a clearer sense of your own needs, wants, and dreams in co-purchasing a home, and you’ve found a group of people that share your vision of co-ownership, you can assess and discuss your compatibility with your co-purchasing group. The more detailed and clear your ideas are, the easier they will be to convey to others.

Step One
Finding Your Purchase Group: How To Find Your Group
Step One
Finding Your Purchase Group: How To Find Your Group
Step One

There are many ways to form a purchasing group for co-ownership purposes. While co-ownership is still relatively new, there are plenty of services that are available to you even if you are a single buyer looking for a group.

Step One
Finding Your Purchase Group: Getting Creative About Cooperative Living
Step One
Finding Your Purchase Group: Getting Creative About Cooperative Living
Step One

There is a broad spectrum of co-purchasing relationships. You and your potential co-purchasers get to decide where you fit on that spectrum, and develop your own shared goals for your home. You might be entering into this process with friends or family members, or with complete strangers.

Step One
Finding Your Purchase Group: What Do You Want?
Step One
Finding Your Purchase Group: What Do You Want?
Step One

There is a broad spectrum of co-purchasing relationships. You and your potential co-purchasers get to decide where you fit on that spectrum, and develop your own shared goals for your home. You might be entering into this process with friends or family members, or with complete strangers.

Step One
Finding Your Purchase Group: Introduction
Step One
Finding Your Purchase Group: Introduction
Step One

Co-purchasing is a significant commitment that can have high stakes. You and your group will jointly manage what may be your most important asset, and this project must be undertaken with care and planning to be successful. Every group is different and you will develop your own models and methods to facilitate the functioning of your home.

Step One
The Single Moms Merger
Intro to Co-ownership
The Single Moms Merger
Intro to Co-ownership

With good planning, your co-ownership purchase can be a profound and rewarding experience. The following are 3 entries are studies from groups who co-purchased their homes. While not all of these groups remain together, their stories demonstrate the importance of preparation and following the 5 Steps. Check out how Two Mothers fared in this case study example!

Intro to Co-ownership

Lesli Gaynor gaynor.lesli@gmail.com