Buying a new place with your partner is an exciting occasion, although the commitment itself is scary for many couples. It is not just because it often signifies a new chapter in life but also because it is a responsibility that requires you to get comfortable talking about money. And as everyone is different and has different experiences, here are the most important things couples can do before buying a home together.
#1 Openly discuss why you want to buy a home
Thinking critically and deeply about your motivations for purchasing a home is the first essential aspect couples should consider. For example, is it better to buy than to rent in your current market? Or because you are both financially ready to invest in your own nest? Or maybe you are trying to keep up with friends? Discussing these questions will enable you to understand your partner’s motivations and, more importantly, your own.
#2 Talk about whether you want to hire a real estate agent
A realtor is not a must when you buy a home, though having one comes with benefits, and often as a buyer, you do not pay a real estate agent’s commission. Still, this might be something that you want to agree on with your partner in advance.
If you decide to use one, opt for a realtor who has purchased their real estate agent insurance online, as it will be easier for you to verify their certificate of insurance. These types of insurance protect their business from accidents, injuries, and legal fees. There are different insurance packages that typically include general liability, real estate E&O, commercial auto, workers’ compensation, and commercial property. And that is important for you, especially if you buy a property from them directly.
#3 Address how much each of you can afford
Based on various factors and diverse experiences, you and your partner may have different viewpoints on realistic spending on housing. That being said, deciding on how much you can afford to spend on a home is vital in confirming you both stay within your means.
Talking openly about this will help you avoid future financial problems and misunderstandings in your relationship. The simplest way to do this is for both of you to make honest financial budgets and projections. This includes how much money you bring in each month, all bills, possible debts, and so on. Knowing how much you can realistically afford for your new home paves the way for how you will go about purchasing it.
Photo by Becca Tapert on Unsplash
#4 Honestly speak about details around the mortgage
A mortgage is usually necessary if you can not pay the total cost of a home out of pocket. However, there are some cases where it also makes sense even though you have the money to pay it off. So, consider whether you are going to take one? Are you both eligible to sign it? Who has a better credit score? Will there be one or two names on the deed?
Above all, do not forget to discuss expenses such as the down payment, monthly mortgage bills, and any closing costs. Naturally, these are not the most pleasant conversations to have, but they will prepare you for any situation.
#5 Consider opening a joint account
Having a joint account is an excellent way to keep track of all finances related to your home. From here, you can conveniently pay the mortgage, home insurance, transfer fees, and other property-related costs.
However, before you do that, make a plan for maintenance, unexpected breakdowns, and utility bills. Though transferred to your joint account, these financial obligations will mean that each of you will be held accountable.
#6 Visualise your home together
Once starting with your home search, set time aside to talk about what you want to see in your new home. First, identify your top priorities, details, and red lines. Then, discuss location, size, amenities, age of the property, and price. Be prepared that you will not agree on every little detail. For this reason, you must both be honest and flexible. The goal is for both of you to enjoy this process while also remembering that you must be able to compromise.
Being open and honest with your partner when deciding on purchasing a home is the most important thing you can do to make this vital life transition smoother. In addition, communication around money and expectations can help you build financial intimacy that is very important since it creates safety and stability within your relationship. Our final piece of advice is to make it an unforgettable experience because it will all be worthwhile in the end!