B.C. residents 'hack' unaffordable housing by partnering up to buy homes
Collaborative Home Ownership site offers shared partnership 'matchmaking' and events, says Vancouver Realtor
Some Lower Mainland residents are turning to unorthodox methods in the battle against unaffordable housing prices, choosing, in some cases, to pool money with strangers in order to buy a home.
Vancouver Realtor Noam Dolgin says clients entering the market together are hoping to move to areas they couldn't otherwise afford, to save money or to build a community with neighbours they like.
"This is a housing hack to create affordability in an otherwise unaffordable city and to create community in a situation where most people are feeling more and more socially isolated," said Dolgin, who started the website Collaborative Home Ownership (CoHo B.C.) to help clients meet potential co-buyers and provide guidance on shared ownership.
While Dolgin says he believes this type of housing is a positive solution to the housing crisis in the Lower Mainland, legal and financial experts are warning homebuyers to properly protect themselves and be wary of the potential risks.
"Folks are getting creative. It's really a sign of the times of the situations … It's kind of like a marriage of convenience," said Paul Lagace, a legal advocate for the Prince Rupert Unemployed Action Centre.
"The major difference here is to carry on that metaphor … You're sharing a mortgage together, and if you split up, it would play out much like a divorce settlement."
WATCH | See how strangers work together to buy homes:
'Matchmaking' for compatibility
Dolgin also uses the metaphor of marriage to describe the process of shared home ownership.
He says the first step is the dating phase, where potential buyers look at the market to see what's available and "date" partners by speaking with friends, family, or strangers to see who has similar values and goals.
To facilitate the initial meeting, Dolgin says CoHo B.C. "offers matchmaking services via an online classifieds page, online events, in-person events and even direct matchmaking."
The next step is engagement, says Dolgin, when potential co-owners discuss finances and personal quirks to "see if you're compatible." At this stage, Dolgin suggests creating a draft legal agreement and considering financing options.
"Once you feel confident in the partner and in the model, then we'll help you find the right home and pull the trigger [to] buy property," Dolgin said.
However, Lagace warns potential buyers that shared ownership is nothing like a typical roommate or landlord-tenant relationship if there are conflicts or disagreements.
"You can't evict the other person because you both own the house, so there's no tenancy to dissolve," said Lagace, adding the only way to dissolve the relationship is by selling either a portion or the entire house.
"People just want to own something … [but] you really got to work all those details out … so there's a lot of prenups involved in it."
Stranger danger
Mark Ting, a partner with Foundation Wealth, has seen the good and the bad when it comes to shared home ownership with strangers.
Seven years ago, Ting and a realtor friend purchased a fourplex in New Westminster by partnering with a couple he barely knew.
The group met for the first time at a viewing for the property, where Ting says they drew up a tentative plan and made a successful offer that same day.
Ting advises people to clearly outline timelines, exit strategies and "variables that can differ greatly for an [investor and] a family considering a property as potentially their forever home."
"We wrote everything down. So we made a handbook that went over all these different types of situations. If someone wanted to sell, if they got divorced, if they died, we had a plan in place which was agreed upon," he said, noting he had more confidence in the sudden partnership given his friend's relationship with the couple as their Realtor.
Ting adds in case of conflict, they signed a side agreement covering topics like insurance, home valuation, parking, storage rates, and more.
"Pick your partners wisely. There has to be a meeting of the minds that comes to things for who pays for what and responsibilities."
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With files from Shivani Joshi and Sohrab Sandhu