How to co-buy a house and make it work

Seven years ago, Phil Levin and his girlfriend, Kristen Berman, pondered a common question: should we move in together?

Levin assumed they would take a predictable path and find a more affordable apartment outside of pricey San Francisco. But Berman, a behavioral scientist, shared her reservations about leaving their friend network – and some facts to back it up.

"All the behavioral science research shows that that's one of the worst things you can do for your happiness," Levin says.

Instead, the couple rented a Victorian-era mansion and invited nine friends to move in. Today, they co-own a multiunit property in Oakland, Calif., which houses 17 adults and two infants.

The now-married couple couldn't imagine designing their life — or raising their daughter — any other way.

"Being able to have this extended family of 'aunties' and 'uncles' close by has been wonderful," Levin said.

In the National Association of Realtors' 2022 Profile of Home Buyers and Sellers, a record-high 5% of first-time home buyers were "other household compositions" – that is, something different than single, married or coupled.

"It can be a great situation, and a way to enter the market that they wouldn't be able to enter otherwise," said Don Koonce, a real estate agent in Seattle. Many co-buyers Koonce has worked with are platonic friends who have been living together for years. But they are as diverse as the types of homes they buy.

Recently, Koonce helped a mother and daughter buy a split-level that they renovated into two distinct units, including separate kitchens.

"It was beautiful," he says. "I don't see any problem with a resale on that, because somebody could rent it out."

Even for family members or experienced roommates, the financial commitment of co-buying raises the stakes.

Ashley Agnew is an investment adviser and financial therapist with Centerpoint Advisors, a wealth management firm in Needham, Mass. When working with co-buyers, she role-plays worst-case scenarios to "stress test" the relationship.

"You really do have to get a little bit financially naked with the person that you're buying with," she says. "There has to be a lot of transparency."

Agnew always recommends that co-buyers seek legal counsel. An estate attorney can draft a cohabitation agreement — something that's not just for romantic partners, she notes. That way, all parties know what to expect if someone wants out.

"It's almost like running a minibusiness, especially if it's not a coupleship," Agnew says.

An estate attorney can also help co-buyers understand options for titling the home, such as joint tenancy or tenancy in common.

To move your plans from dream to reality, it's essential to find a lender that is familiar with — and supportive of — co-buyers' unique needs. That's often the first hurdle, Koonce noted.

Koonce earned a professional certification established by Seattle-based real estate startup CoBuy. The company offers education for real estate agents, attorneys and lenders, as well as services for co-buyers themselves.

After establishing Radish, Levin found his inbox flooded with questions about co-buying and co-living.

So in 2020, Levin teamed up with close friend Gillian Morris to co-found the Substack newsletter Supernuclear. It provides advice, templates and tools to navigate common challenges of co-buying and co-living.

"We didn't invent this concept," Levin said. "We're sort of standing on the shoulders of other people, so there's sort of a pay-it-forward element where we wanted to have other people experience the happiness and meaning that we've gotten through this."