Let's answer those questions:
What happens if someone can't make a mortgage payment?
Given the qualifications for a DubbleUpp, this should be a very rare occurrence, but still something the DubbleUpp agreement covers.
Even if you are friends with someone, you’ll want to have some framework for making financial decisions. This will help prevent larger arguments in the future. If the other party pays the missed amount on the mortgage, there are multiple ways you can handle it. You can just require repayment with or without interest. You can add it to the amount the non-defaulting party contributed in the beginning and then adjust the equity. It can also be a choice of the non-defaulting party as to what remediation option to pursue.
In the DubbleUpp Agreement, there is a whole section dedicated to leaving early and how profits are shared and any penalties. All of these sections have default values we give you, but this a contract between the two buyers and anything can be negotiated.
How long is a DubbleUpp?
The recommended term of a DubbleUpp is 5 years.
If you know you only want to be in an area for a few years, this does not exclude you from doing a DubbleUpp. You can agree upfront on allowing someone to rent the extra space. Once one or both parties leave the house, you will want to establish an agreement on how to handle maintenance and decision on the renters. If you are thinking about this, your DubbleUpp team can help you walk through options.
If both parties want to stay in the house more than 5 years, the contract can automatically renew for another year if both parties agree.
Can I get out of the house early if something changes in my life or job?
Life can change and you may unexpectedly not be able to continue living in the house or just want to move out because of an advancing relationship. By discussing that potential ahead of time and including conditions in the agreement, you’ll have a solid framework for decision making. You’ll want to agree ahead of time on who approves renters, how is general maintenance covered with only 1 owner living in the house, and what happens to any rent amounts above or below the mortgage payment.
Do we need to ask permission for guests to spend the night?
You both own the property and shouldn’t have to ask permission to have someone come over or even spend the night. Having what you are comfortable with included in your DubbleUpp agreement gives you the framework to know what is acceptable. We recommend agreeing up front on a certain number of days that are allowed. This prevents someone from becoming a permanent guest. Open communication about changes to your life will help make it easier if you need to go beyond what was initially agreed upon.
Who gets the primary or master bedroom?
This can be a tricky piece of negotiation prior to agreeing to buy a home with someone. If you are looking to negotiate for the master or primary bedroom, here are some common items that we have seen people give up in exchange for the larger bedroom: extra bedroom for an office, garage space, parking space, paying more for utilities. To make it easier, you can also look for homes with 2 equally large bedrooms, a large bedroom with ensuite bathroom, or a large basement.
What if I have pets?
Pets are OK with us but you will both need to give it the stamp of approval.
Who pays for property maintenance like an appliance needing repair?
All maintenance is split according to the DubbleUpp Agreement. The default value is 50-50, but that can be negotiated differently if both parties are responsible for different amounts of the mortgage or if one party uses more of the rooms in the house (home office). If you are also DubbleUpping with an investor, the investor would not be responsible for any normal maintenance below a certain threshold defined in the DubbleUpp Agreement. A home warranty may help control costs of unexpected expenses.
Do I have to pay for anything upfront?
All upfront costs (down payment, closing costs) are split according to the DubbleUpp Agreement. The default value is 50-50, but that can be negotiated differently if both parties are responsible for different amounts of the mortgage or if one party uses more of the rooms in the house (home office). If you are also DubbleUpping with an investor, the investor will cover all upfront costs.
Who pays for large expenses like a new roof or HVAC system?
All maintenance is split according to the DubbleUpp Agreement. The default value is 50-50, but that can be negotiated differently if both parties are responsible for different amounts of the mortgage or if one party uses more of the rooms in the house (home office). If you are also DubbleUpping with an investor, all parties will be responsible for larger expenses as defined in the DubbleUpp Agreement. In that scenario, the investor will cover 50% of the costs and the buyers would split the remaining 50%. A home warranty may help control costs of unexpected expenses.
What if I want to do home improvements – how does that get divided up?
Any home improvements will have to be negotiated between all parties owning the home. Depending on who will use the improvements, it may not be a 50-50 split. The increased home value should also be considered in the negotiation. If there is a must-have improvement, this should be discussed prior to closing on the house to make sure everyone is in agreement.
Can I DubbleUpp with an investor and someone else to help with monthly payments?
Yes, this is something that can be done and is easily possible by adjusting the DubbleUpp Agreement. Adding an investor not only helps with upfront costs, but can also give additional assistance by sharing in the major expenses. A home warranty may also help control costs with unexpected expenses.
What if we can’t agree on a house?
If you can’t agree on a house, then we can help match you with another buyer who may be a better fit for your house requirements. Part of the process is knowing what matters to you and finding someone with the same view.
Who pays for the difference if an appraisal comes in lower than the purchase price?
That is a decision that will have to be discussed between you and the other party. Before putting in an offer, your real estate agent will give you a realistic idea of the estimated appraised value of the house. You can then have a discussion before putting in your offer so know who will be responsible for any extra amounts.
Are there any qualifications to be a buyer?
If you are matching with another buyer who will be living in the house, there are no qualifications for the program outside of normal loan program requirements. It is generally a good idea to match with someone in a similar credit/income level as you so neither party adversely affects the loan. If you are matched with someone you know, you may be ok if the rate you have to pay is a little more because of their credit. Our mortgage bankers will let you each know your credit position and you can make the decision if it is worth it or not.
What are the matching criteria?
The matching criteria when using the DubbleUpp.com site include credit, home qualification, home style, personal preferences, location, and habits. Although you may not be a 100% match for someone, you will see their profile so you can make a decision if those points matter to you. On the dubbleupp.com website, you will be able to control what preferences matter to you and control the compatibility score.
Who mows the grass?
Mowing the grass (and any of the household chores) should be discussed upfront and divided up between the DubbleUpp parties. If someone can do more of the chores, maybe they get a break on utilities or maybe that is how they get the master bedroom. Another option is to pay for the service split the costs like any other monthly service.
Should we share a single Netflix account? Amazon? Hulu?
You’ll have to check with each service, but most streaming services allow people in the same house to share a single service. This can be another advantage of doing a DubbleUpp versus renting on your own. If you are going to share services, know that viewing/purchase history is normally visible to anyone so just know that before you agree to share.
Should we share groceries?
This can be a very tricky situation and can lead to petty arguments when someone uses the last of the milk and doesn’t replace it “fast enough”. We would generally advise against this but every situation is unique and you may be able to find a good solution talking through things early. One possible solution we have seen partially work is where all grocery receipts are split equally, and all food is then shared. That is normally only short term as people eventually end up slowly buying a few more things that only they like and then things end up being split up.
How should title the property (Tenancy in Common vs. Joint Tenancy)?
If you have done research into co-ownership, you most likely came across articles about these two ways to title a property. The way you title a property controls things like how ownership is transferred if one party dies, how you can use your share as collateral for loans, and how creditors can come after the property. With Joint Tenancy, ownership us transferred to the surviving owners if someone dies. You cannot pass it on through a will. Because of this reason, we normally advise for using Tenancy in Common. The other benefits of Tenancy in Common are being able to use your portion for collateral without permission from others and limiting the ability for creditors to force a sale of the property to go after one owner. There are special circumstances where Joint Tenancy may be better. This is something the DubbleUpp Certified team can help you understand.