Shared Ownership – How Does It Work?

Due to the high prices of real estate at present, there are ways that first time buyers can get a foot on the property ladder, so to speak, and own between 25-75% of the property. Typically, the cost of the property is divided into 4 equal shares, and these are offered to third parties, or those who wish to partly own their own home.

If you are planning to invest in real estate soon, here are some things you need to know.

Professional Advice

Any person who is considering a shared ownership deal should talk to a law specialist who handles conveyancing Brisbane property owners rely on, as they would be able to run through the fine print to ensure that there are no hidden surprises. Low cost housing associations usually offer shared ownership, which is a great way for a young person to buy a share of their home.

The Right to Buy

When you purchase part of a property that is owned by a housing association, you would have the option to buy more, and even up to 100% of the property. Prior to entering into any shared ownership property deal, you are strongly advised to let a conveyancing solicitor study the small print on your behalf, as he would make you fully aware of your obligations and rights as a part owner. There is some further reading on shared ownership, which is recommended reading if you are thinking about buying a share in a property.

Calculating the Deposit

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Most people who buy a share of the property have to pay a percentage of the deposit, which might be as high as 5% of the current market value, and once you have a mortgage pre-approval, you are ready to proceed. It is very important to source a reliable conveyancing lawyer, who can help you with the terms and conditions of the contract of sale, among other things.

Paying Rent

The portion of the house that is owned by the housing association has to be rented by the part owner, until such time as they can afford to buy the remainder of the property. As with all contracts, there are terms and conditions, and you should hire the services of a competent conveyancing solicitor, who will scrutinise the terms and conditions on your behalf.

Affordable Alternative to Outright Purchase

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When you consider the very high cost of buying property, shared ownership is the only way that a young couple can get their first foothold on the property ladder, and, of course, it is a lot easier to obtain a mortgage when you are buying a portion of the property.

If you are thinking about shared ownership, it is important that you fully understand the terms and conditions of the agreement, and once you have a complete understanding, you can then make an informed decision. There are certain fees involved with any property purchase, so you do need to crunch the numbers to be sure that you can actually afford it, and with the help of a good conveyancing lawyer, you can take the first steps to becoming a property owner.

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