Coupling low interest and mortgage rates with current home affordability means that buying a home has never looked so appealing, especially to those in their 20’s. In the past many young adults entering the work force were unable to afford the staggeringly high interest rates that went along with purchasing a home; however, in today’s economy that has completely changed. More and more 20-somethings are upset by the ever-increasing price of rent in desirable locations, and are encouraged by the lure of the housing market or the notion of paying less than a comparable rental property while gaining equity. This is one of many reasons why young adults are beginning to purchase homes prior to other life milestones. However, there are certain complications inherent with buying property before being settled and/or being married. Many 20-somethings are often uncertain about their career, location, or future spouse which is why a non-marital property agreement is a wonderful tool to protect younger adults with the purchase of their first home.
A property agreement is a legal compromise between two or more individuals purchasing or living in a home together. Examples of property agreements where the purchase of real estate is involved could include a young unmarried couple that may someday get married, looking to save money on rent; or multiple roommates who are all trying to gain equity and lower their monthly payments. Whatever the situation, a property agreement is a useful document that discusses how much of the house each party owns, how title will be recorded, and what happens to the home if there is a dissolution of the relationship. The agreement protects assets and specifies what will happen in the occasion that there is a breakdown of the relationship between the parties who purchased the home. The agreement will typically describe how the property will pass, be appraised, and whether there is a buyout right for any of the original parties to the agreement.
If you or anyone you know is interested in purchasing a home and would like to know more about property agreements, please contact the Law Office of Erin McBee and we would be happy to speak with you.
(drafted by Chelsea Portney, Associate)