by Craig Venezia

Buying a first or second home with friends or family can make it more affordable.

What you learned in kindergarten about sharing could help in your quest for a home. But this time around, rather than sharing your Lincoln Logs, you'll be sharing your home, with a cobuyer.

Once the domain of married or committed couples, more and more homebuyers are discovering the advantages of teaming up with a relative, friend, or someone else to buy a house. If done right, the shared-purchase approach can get you a home you might not otherwise have been able to afford.

On the other hand, if you don't fully think through the arrangement and set it up correctly, it could lead to financial and legal chaos, not to mention a strained or broken relationship.

Decide How You'll Hold Title

Any time you buy a house, you receive what's called "title," evidenced by a piece of paper called a "deed," which explains how the grantees are sharing the title.

It's important to choose a manner of title-sharing that reflects your true wishes about how you'll share ownership. Your main options for sharing title with a non-spouse include:

• as tenants in common (TIC), and
• as joint tenants with right of survivorship (JTWROS).

(Married couples may also take title as "tenants by the entirety" or as "community property.")

Differences Between TIC and JTWROS Ownership

There are some important differences between a tenancy in common and joint tenancy, particularly when it comes time to sell or dispose of one person's ownership interest.

With a TIC, you and your cobuyer are allowed to own unequal interests (also called shares) in the property. Also, if one co-owner dies, that co-owner's share is transferred to his or her beneficiaries. Tenancy in common (TIC) is by far the most common way for unrelated cobuyers to take title.

With a JTWROS, by contrast, you and your cobuyer have (in almost all U.S. states) no choice but to own equal interests in the property, 50/50. If you buy a home with two others, you each own a one-third interest, and so forth. Upon the death of one joint tenant, the remaining owners gain the deceased owner's interest in the property. This happens automatically, with no need for a court or probate proceeding. In fact, even if the deceased owner wrote a will specifying that the property was to pass to some other person, that request would not usually be allowed.