Two sisters purchasing a house.

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S class

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If two sisters are purchasing a house as joint owners, must they each contribute half the purchase price ?
If for instance for the purchase of a 700,000 euro house, one person is a cash buyer and pays 400,000 euro and the other person takes out a mortgage for 300,000 euro, would this be considered as the first person gifting 50,000 euro to the second person ?
 
It would be cleaner if one paid €350k and the other borrowed €350k.

However, in the above case, it should be treated as a loan of €50k from one sister to the other and it should be documented, and ideally, repaid.

Of course, they could agree that one owns 40/70ths of the house and the other 30/70ths.

Whatever they do, they must do an ownership agreement covering what percentage they own and what happens if and when one wants out.

Brendan
 
S class said:
If two sisters are purchasing a house as joint owners, must they each contribute half the purchase price ?
If for instance for the purchase of a 700,000 euro house, one person is a cash buyer and pays 400,000 euro and the other person takes out a mortgage for 300,000 euro, would this be considered as the first person gifting 50,000 euro to the second person ?
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Just have a tenancy in common rather than joint tenancy so that the person paying more owns higher % of property. Need legal advice though. These things can get messy.
 
With a 4:3 split in ownership, would maintenance and upkeep costs be split in that ratio with other costs like utilities 50:50? All that would need to be agreed in detail in advance to avoid disagreements later.
 
Brendan Burgess said:
It would be cleaner if one paid €350k and the other borrowed €350k.

However, in the above case, it should be treated as a loan of €50k from one sister to the other and it should be documented, and ideally, repaid.

Of course, they could agree that one owns 40/70ths of the house and the other 30/70ths.

Whatever they do, they must do an ownership agreement covering what percentage they own and what happens if and when one wants out.

Brendan
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It would be cleaner if they didn't buy the house together at all. Friends/ siblings buying houses together is always a hassle. One of them meets someone and either wants to move on or wants to move their partner in.
 
Agree Stephen

But if two people would prefer to live in a €700k house than each living in a €350k house, then it's well worth the hassles involved.

But it's essential that they accept that it is very likely that one will want out after 5 years or so and so they must allow for that.

Brendan
 
Brendan Burgess said:
very likely that one will want out after 5 years or so and so they must allow for that
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I think the only way it works is that you have a signed agreement that property is sold after (say) five years, with first refusal to either party, and the proceeds divvied up.
 
No need to set a date for selling the property. They may both wish to stay in it forever. Or one may wish to go earlier.

I would word this part of the agreement along the following lines:

1) After [4] years , either side may give 6 months' notice of their intention to sell the property.
2) If the other partner wishes to buy the property, they can do so at a price agreeable to both.
3) If they cannot agree on a price, XYZ Ltd estate agents will be appointed to decide the value. The cost to be shared by both sides.
4) The seller may then offer to sell at this price or withdraw her offer to sell. If she withdraws her offer to sell, she cannot initiate the sales process for a further two years.
5) The buyer may agree to buy at this price and has 6 months' to complete the transaction.
6) If the buyer decides not to buy, the house shall be put on the market. If they get an offer in excess of the valuation, then it will be sold.
7) The buyer has the right to match the highest offer.

Brendan
 
Steven Barrett said:
Friends/ siblings buying houses together is always a hassle.
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Not at all! Many siblings live happily and successfully together and are healthier than living separately.

It is important to get good advice and have a formal agreement in place. But for many people this is well worth the hassle.
 
I know two sisters who bought an older property then got pp and split it into 2 beautiful 2 bed apartments. They couldn't have afforded to buy two similar apartments in the particular location. One sold up a few years later to buy a home with her new husband, the other lived in her place for another 10 years. They had no problems but it might have been a different story if they were sharing the whole house and one wanted to sell but the other couldn't afford to buy her out.

Siblings or friends who buy together usually means one person has to make life and/or big financial decisions based on the other person's life plans, ie selling up or buying the other half of a house they maybe can't afford. Its not a great situation to find yourself in.
 
S Class, The age of the two sisters matters. Advice would be different if they are two spinsters settling down for retirement together or two young ladies etc.
 
Brendan Burgess said:
I presume by spinsters he means older single women who are unlikely to get married.

Because two young ladies are much more likely
1) To have boyfriends staying over
2) To form new relationships and want to sell out sooner.

Older people are more settled.

Brendan
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Hi Brendan,

You really think that?

It can be hugely difficult for siblings to live cheek-by-jowl with each other throughout possibly decades of long and empty days of retirement, particularly if one or other of them has health or independence issues, and/or there is a lack of money.

For some, this is literally a life sentence.
 
Hi Tommy

I suppose it depends on the individuals involved. If the two sisters do not get on well, they are not going to buy a house together.

I suspect that the original question is about two young women who can't afford to get on the housing ladder.

Brendan
 
Once it's human beings we're dealing with Brendan, everything and anything is possible. It was common decades ago for siblings to live permanently with each other throughout their lives, but that went out of vogue as we got more prosperous and life expectations increased accordingly. I can't help thinking there were good reasons for that decline.

I personally think the sisters mentioned by the OP are crazy to countenance buying a home together. You don't need a €700k house to get on the housing ladder, and one of them already has €400k in funds.
 
I have seen some of these arrangements work very well.

You don't "need" €700k. But in Dublin it might mean getting a very nice house close to where one works and close to other family members.

I like living on my own. But other people much prefer to live with others and may feel vulnerable in a house on their own. But as the old saying goes "houses for courses".

Brendan
 
T McGibney said:
It can be hugely difficult for siblings to live cheek-by-jowl with each other throughout possibly decades of long and empty days of retirement, particularly if one or other of them has health or independence issues, and/or there is a lack of money.

For some, this is literally a life sentence.
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And how is that any different to a couple buying a house and planning to spend the rest of their lives together ;)
 
Cervelo said:
And how is that any different to a couple buying a house and planning to spend the rest of their lives together ;)
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That's easy

Couples can choose to split - divorce if they're married - and if desired never see each other again.

A bit more awkward when you're siblings.
 
T McGibney said:
Couples can choose to split - divorce if they're married - and if desired never see each other again.

A bit more awkward when you're siblings.
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I would have thought it was more difficult for a married couple with kids to split than for two sisters.

But I haven't much experience in that area.

Brendan
 
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