Not Married...but Buying a Home

Speaker 1: [0:09] Hello, hello, and welcome to another episode of the Awesome in Seattle podcast. This is your host, Christian Awesome, with the Awesome Nossum Group at Wilson Realty. I have with me my amazing co-hosts, the one and only Mr. Jason Saldarriaga.

Speaker 2: [0:23] Who, me?

Speaker 1: [0:25] And the one that we refer to as the dog whisperer, Mr. Les Cutting.

Speaker 3: [0:32] I don't know why I did that. Sorry.

Speaker 1: [0:35] Are sitting your Hall show or

Speaker 3: [0:36] something? Uh, right. What's going on? And you wanna know what's funny? I actually did the whole sign, too, so.

Speaker 1: [0:41] Ah. I don't know if you could see it, but anyway. That's funny. Um, all right. So we are a group of Seattle area real estate agents, and we love our city. We love the metro Seattle area. And, uh, today's episode is, you know, we're expanding on something that we hear from clients a lot, and that is, "We are not married, but we want to buy a house together. How do we do this?" And that is what this episode is all about. I never thought it was that big a deal. I personally have done this, so, um, it is what it is, and people need to know how to get it done. Before we get into that, though, I definitely want to make it clear we are not giving legal advice. We are not lawyers. We are not attorneys. We are not giving legal advice in this episode. We are just talking about the different scenarios that we see a lot and giving some info that we have seen people do, uh, and we just wanna educate you about the different options out there. So it is always a good idea to consult with an attorney. Do not rely on us for this info. We're just trying to share what we know. Again, we have helped a lot of people do this, and this is really for, for those couples that are not married yet but are wanting to buy a house. Here are some of the ways you can go it. So Jason, let's go into the basics real quick.

Speaker 2: [1:51] Yeah, just a couple things before we dive deep. Uh, first off, this is not just for couples. So while we're gonna focus on that potentially, a lot of what we discuss will also apply if you're just buying a property with a friend or a family member. Like, so it's, like, multiple people basically buying. You know, it, it, I think it's really important to acknowledge this because a lot of people get these two things mixed up: mortgage versus title. When you take a mortgage, you're responsible to pay that loan. You know, you're financ- you're committing financially to paying off that loan, whereas title is separate. A lot of times they're combined because the same people are responsible for each, basically, or, uh, their name is on each, but they can be separate. Title refers to who owns the home. So in other words, I could buy a house For somebody else, um, for, you know, a person named Joanna, and Joanna could own title, but I could be financially responsible and have the mortgage in my name. Yep.

Speaker 3: [2:53] All right. So while we are on the topic of finance, let's just get into financing. When two people inquire about getting a loan, so you'll go to your, you go to your, your mortgage broker, and then he'll pull both your s- credit scores. So it could be a couple, or like Jason mentioned, could be a friend, and he will pull your credit score. They're gonna use the middle of the three credit scores. They're gonna look at your debt-to-income ratio. And sometimes they're gonna find that one of you is better positioned to get a better deal on a mortgage, and they're gonna likely run all scenarios. So they're not just gonna look at one person. They're just gonna look at every scenario in which possible way, and they're gonna figure out the best possible deal for whoever that is. Sometimes some couples, they choose to only have one person on the mortgage because it's a better deal, like I just mentioned. That's pretty much it.

Speaker 1: [3:38] Yeah. All right. So title. So again, title is who owns the house. There's a few different ways you can go about this. Sole ownership is basically one person owns the house alone. That's pretty cut and dry. Tenants in common is another form of ownership. That can be an unequal way of owning the house. So for instance, one person could say, "I own 75% of the house," and the other person only owns 25% of the house. If one person dies, uh, that share then goes to their heirs, like kids, parents, siblings. The reason you would set this up this way or you could set this up this way is, you know, if, if one person paid a majority of the down payment, maybe they paid 75% of the down payment, that's why they set it up that way, 75/25. There's really- Unending number of ways you can go about setting it up, but tenants in common is one way. Another way is joint tenancy with right of survivorship, and that's when you own it equally, but if one dies, the property goes to the other person. I'd say a lot of times people go this route. But again, remember that you can be on title and not be on the mortgage. Let's talk about some prior agreements. So some c- couples actually make agreements prior to purchasing a house together. They're often called cohabitation agreements or living together contracts. These agreements often state who owns the property, who's responsible for paying the mortgage, taxes, and any other expenses that pop up. It also kinda answers what happens if someone has a loss of income or dies. I know it's a little morbid, but you do gotta think about these things when you're buying a house and spending a lot of money together. Uh, it also says who will get the write-off on, you know, all the benefits of owning real estate. There are a lot of tax write-offs. And remember that unmarried couples file separately, so only one person can write off the property on their return, and this is why it's important to set this up ahead of time. Again, have an attorney draft this all up if this is something that you're interested in. And if the agreement includes real property, which obviously real estate is real property, you must get this notarized, otherwise it really doesn't matter.

Speaker 3: [5:42] All right. So let's get into name changing during a transaction. Um, so sometimes couples, they buy a house while they're engaged, and obviously they don't have the same last names yet. And sometimes the home will close either after the wedding or right before. People wonder how they're gonna change their names or, like, what it is. So it's pretty simple. If you wanna change it before the transaction's over, escrow will have you sign a name affidavit and it says, you know, so and so will now be known by their new last name, and that's one of the simplest ways to do it. Or you could d- if that's not possible to do that during the transaction, what you could do is you can go to the Social Security, uh, office and get your name changed there and get all, all your documents there changed. Christian, I'm gonna fall back on you on this one. Didn't you have to deal with this at some point in time? Or do you have a little more information on this one?

Speaker 1: [6:31] Uh, yeah. I mean, we've definitely had a lot of clients deal with this in the past. Um, I've personally dealt with this with my own wife, and it's really not that big a deal. The easiest way, again, like you said, is if you are under contract and then, you know, the house closes, uh, while you're under contract, so you gotta change your name, it's easy enough to just get one simple addendum written up and add it to the real estate contract that you have. It's very- Yeah … very simple.

Speaker 3: [7:00] It's not that hard. We act- I've actually have, uh, clients right now that are actually going through the same thing. They started the transaction with me engaged, and now they're married, and we're still in the transaction. So they now share the same last name, so what we're gonna do is we're just gonna draw up an addendum, uh, change their last names, and we're gonna keep it pushing.

Speaker 1: [7:18] Yep. Easy, easy.

Speaker 2: [7:19] So I picked the short straw and get to discuss what happens if you break up. Yay. Everyone's favorite topic, I know. So, uh, you know, like Christian said earlier, we're not lawyers. This is not legal advice or anything of the sort. Um, s- but, you know, that said, if you do have a, a prior agreement Like Christian mentioned, some of the agreements people might have when they're purchasing property together, then that agreement likely dictates what happens to the house, to that property when you break up. That was most likely the point of creating that agreement in the first place. Usually, what happens when a couple breaks up and they own a house together, it's very common they sell the home and split the proceeds accordingly, or one person buys the other out because maybe they wanna stay in the house or keep ownership in the long term. Now, if one person does buy the other person out, it's really important to ensure that the sole owner's name is part of the agreement. You don't wanna be taken off title but still have, uh, mortgage responsibility at the end of the day because that's probably not what you had in mind when you split the property up. So just keep that in mind.

Speaker 1: [8:31] Perfect. Well, let's talk about, um, kinda… Other states call this, uh, or have called this common law marriage or even committed intimate relationships, and a lot of people have heard this. I've heard clients refer to this in the past, and that's where, you know, you're a couple, you've lived together for numerous years and, you know, there's often other factors that have to be present as well. But after a certain number of years, the law treats you as a married couple, even though you might not be. Washington State actually doesn't have common law marriage, but they do have something called a committed intimate relationship. Now, again, we are not attorneys. Consult your attorney about all this stuff. Pretend like I'm not even telling you the truth. Verify everything with your attorney. That's not me. What I will say is that if you want to own property on your own and you have a partner that is living with you, there are a few ways to protect yourself from falling into this committed intimate relationship category. Again, consult with your attorney. You could have a prior agreement. You could have your partner sign a lease. You just gotta do some things to make sure that you're not commingling funds and, you know, you just don't wanna be looked at, uh, as if you are in this committed intimate relationship. If you are going to consult your attorney, I'm sure they have a very simple way to make this clear, but that's, that's definitely something that you need to pay attention to as well. So if you are with a partner or a friend or family member and you're looking at buying something together, here are some questions to discuss ahead of time. So get out your pen and paper, write these down. These are what you want to answer Who is going to be on the mortgage? Who will pay what amount of the mortgage? Who is gonna be on title? And if you want equal ownership, joint tenants with a right of survivorship is often the choice people make. So again, consult with your attorney about that. Who is going to get the tax benefits of owning the home? How are you gonna pay for repairs and other, other home expenses that come up? And, you know, what happens if things go wrong? Income loss, you break up, death, disability, et cetera, et cetera. These are the questions that you want to answer before you go in and buy a property with someone, uh, that you are not married to yet. That is it. That was actually a pretty quick episode. I hope you got a lot out of it. I know a lot of our clients, again, uh, are in this situation, so don't hesitate to reach out and ask us questions. We can put you in touch with people that can assist you with figuring this all, this all out. But that's it for today. If you have any sort of questions, you wanna reach out to us, you wanna talk about potentially buying and you wanna see if it's possible, you wanna talk about selling and see what the market's doing right now, do not hesitate to look us up online. Our names again is the Awesome Nossum Group. You can look us up at awesomenossum.com. You can always schedule free appointments right there. Uh, and lastly, we have another Beers and Home Buying class coming up on February 24th. Um, feel free to sign up. They're totally free. Uh, it is the easiest way. It's the best one hour of your day you could possibly spend if you're considering buying a house, and it's free to sign up at beersandhomebuying.com. That's it. Another shameless plug. Thanks for listening. Exactly. All the time, but we gotta get it out there. Yep. All right. Well, thanks for listening. We'll talk soon.

Speaker 2: [11:54] Bye. All right. Bye, guys.