Would you buy property with a stranger?
Many prospective buyers would balk at the concept, but an online listing is offering a 2,992-square-foot home in British Columbia’s Lower Mainland for $750,000 at “half the rate with no splits.” , some people might pause for a moment.
The property on Lockhart Road in Richmond, which has five bedrooms, five bathrooms, two fireplaces and a two-car garage, is also listed on Realtor.ca for purchase. He admits the arrangement is unusual.
The property description says, “Yes, it’s unusual.”
The listing, which has been open for 170 days, urges potential buyers to do their homework and ask questions such as “Who will I share ownership with?” “Do you want to sell the other half?”
“We don’t know these answers,” the list adds in all caps. “Call your real estate agent, mail the documents and ask for clarification.”
Lawyer Richard Bell said while it’s extremely rare for strangers to share property, it’s becoming increasingly common for family members and close friends to share property, and that’s a factor in B.C. He pointed out that many communities have astronomical housing prices.
“It’s too expensive to buy individually, so people start looking for sharing opportunities,” Bell told CTV News. “Affordable is a great word, but it’s pretty hard to find in major centers and even in smaller centers.”
There are currently no single-family homes listed for less than $1 million in Metro Vancouver, and no homes listed for $1.5 million that have five bedrooms and five bathrooms.
The Lockhart Road property was recently appraised at $2.1 million, but whether that makes the asking price of $750,000 with half interest an attractive deal is, in part, raised by the property listing. It depends on the answers to the many unanswered questions asked.
CTV News reached out to the real estate agent representing the home for more information, but did not receive a response.
A five-bedroom, five-bathroom home in Richmond, British Columbia is being split with a 1/2 title for $750,000. (Realtor.ca)
Generally speaking, Bell said the key to shared ownership arrangements is to consider as many potential situations as possible.
For example, if two couples are choosing to buy a home together, they must first agree on what will happen if one of the couples separates or moves.
“What happens if someone has to sell? Is there a process in the contract to agree to a meeting with a potential new buyer? Is there an approval process like there is in a co-op?” Bell said. .
“It’s an arrangement where people commit to something very different than what they’ve grown up with, but sharing the same space during college is another thing, but that’s another story.”
Funding issues may also arise. No matter how much money each buyer contributes toward the down payment, the full owner’s name will be on the mortgage, and lenders will assume each buyer is 100% responsible for the remaining balance, Bell said. He pointed out that he considered it.
“Most people would say, ‘Okay, I’m going to take out a $500,000 mortgage and you’re going to take out a $750,000 mortgage.’ But in reality, you two Both individuals will be liable for $1.25 million in damages,” Bell said.
Continuing to carry this debt could affect the owner’s ability to finance a new car or apply for a new credit card, the attorney added.
But Mr Bell said despite the potential complexities, shared ownership could be a great way to enter the property market. In fact, he shares his home in Vancouver’s Mount Pleasant neighborhood with all of his children in just such an arrangement – this is until his wife died of cancer four years ago. It was a dream from before.
Bell is also the president of Small Housing, a nonprofit organization that advises the British Columbia government on how to bring “moderate density” to areas that are primarily made up of single-family homes.
He said the state’s recent move to ease zoning barriers in urban areas — allowing single-family homes to be divided into multiple units — is a step in the right direction, adding that stratified He pointed out that real estate allows each buyer to obtain their own mortgage, making it possible to reduce mortgage costs. Potential for awkward situations to arise.
“Shared ownership is a solution that works in many situations, but tiering would be much better in other situations,” Bell said. “And you’ll see that play out in the near future with state efforts and some local government efforts.”