As prices dip and banks get stingier, first-time buyers are breaking into the market by pooling their cash. They’re also carrying sibling rivalry and roommate drama well into adulthood

Bert Archer
Toronto Life
April 2009

The buyer’s market is bringing out the creativity in cash-strapped Torontonians. To score a livable home in a livable neighbourhood, wannabe owners are summoning courage (and humility) and sharing finances with friends, colleagues or family. Co‑buying seems like a smart way to spread the financial risk, but it carries the danger of rupturing long-term relationships.

Mike Jacobs is a 32-year-old filmmaker who recently got a $20,000 payday from developing a Cartoon Network series. He wants to use it to buy a house and is convinced that now is the right time. To pad his down payment, Jacobs is going in on a place with some friends: Shea Lowry, a 26-year-old screenwriter, and her boyfriend, Paul Malcolm, a 37-year-old CBC producer. The trio is looking for a three-bedroom south of Bloor between Bathurst and Lansdowne, something in the $350,000 to $500,000 range that could be easily divided into two separate spaces. They’re hammering out a written agreement on how to split expenses, future sublets, and what happens if the couple has kids or breaks up. Jacobs isn’t worried about making a profit. “If it’s not something we’re going to make money on in six or 10 years,” he says, “then we’ll just hold onto the property longer.”

Jacobs is looking into securing his financing through Mortgage Architects, a brokerage that has seen a rise in co-buying situations. “During the boom, we had 40‑year mortgages and 100 per cent financing,” says firm co-owner André Semeniuk. “People didn’t need to partner up.” With banks more wary, joint purchasing has become necessary for some.

When Joanna Duong, an agent with Coldwell Banker Terr­equity, grew tired of living with her parents, she went in on a $245,000 Harbourfront condo with her brother. They decided that he’d come up with the down payment and she’d live there and take care of the mortgage. But the siblings had different ideas about how co-ownership would work. Discussions about equity loans and lines of credit ended in frustration. They had agreed to split repair costs, but when a pipe broke, her brother argued that her negligence had caused the problem. Within eight months, Duong moved out and they found tenants.

About 10 months later, Duong went in on a $175,000 loft with a colleague. Things weren’t perfect—the two differed over fixed- rate versus variable mortgages—but after selling both properties last summer, she had $70,000 to put down on a place of her own. She bought a $167,000 bachelor pad in the Pantages tower and is currently renting it out. Since the downturn, Duong has been recommending joint ownership to clients, but with one caveat: unlike her, they should get an agreement in writing. That way, making financial investments won’t require sacrificing personal ones.