My grandparents are selling their house to me and my boyfriend for less than market value. This gives us instant equity, which is great! However, it’s complicated because we want only one person on the mortgage for financial reasons. I have better credit, so I’m the one applying for the mortgage, but we want both our names on the deed. I want to ensure that, should we sell the house, my boyfriend is fairly compensated for his contributions, especially since he’ll be paying more than half of the mortgage and bills. I’m considering putting in writing that he gets 35% of the profit if we sell, plus a proportional share of any money he puts into repairs. Does this make sense? How can we do this cost-effectively? Should we draft something ourselves and have it notarized? My boyfriend and I are committed to each other, but I want to protect both of us in case circumstances change.
It’s great that you’re thinking ahead about how to structure this. It makes sense to have a written agreement detailing profit sharing based on contributions. Consulting with a real estate attorney can help ensure that your agreement holds up in court.
Definitely get everything in writing. A cohabitation agreement might be a good idea, outlining contributions and profit-sharing. This can protect both of you and clarify expectations.
Adding him to the deed while only you are on the mortgage is a common practice, but make sure you have clear documentation regarding financial contributions. A notarized agreement is a good step, but legal advice is recommended for long-term protection.
Consider how you will handle decisions about repairs and renovations as well. Setting up a fair process for discussing costs and contributions ahead of time can help prevent conflicts.
You’re smart to think about these things now. Life can change, and it’s best to have protections in place. Make sure you both feel comfortable with the arrangements and keep communication open.