Collective home ownership on the rise

Friends indeed--collective home ownership is one answer to the American Dream in what housing experts call "hot housing markets."

The back house, where Dan Friel and Sarah Kornbluth live. The front house will be occupied by Zoe Singer and Aaron Siegel.

Tess Vigeland: I'm happy to report that I have some very, very close friends. Vacation with them. Have them over for parties. Share life's finer moments with them and the not-so-fine ones.

But would I make one of biggest investments with my life with them? I'm not so sure.

Ann Heppermann has the story of friends in New York, who decided to take the plunge and become friends indeed.


Ann Heppermann: Four friends are sitting in a restaurant in Brooklyn. And they're having dinner to celebrate a big purchase.

Zoe Singer: To we all! We just bought a house!

Sound of clinking glasses

Sarah Kornbluth: To four brains.

Aaron Siegel: Four brains are better than one.

Ah, did you catch that?

Sarah Kornbluth: To four brains.

Aaron Siegel: Four brains are better than one.

That's right. These four friends, two married couples actually, Aaron Siegel and Zoe Singer AND Sarah Kornbluth and Dan Friel just bought a house. Together. In Brooklyn.

Kornbluth: I don't feel the remorse yet.

Dan Friel: To it never coming.

But the idea of living together was actually hatched years ago. On a park bench. In New York City. Kinda like the one we're at today.

Singer: I remember that we used to knit too, do you remember knitting on a park bench?

Kornbluth: Oh, yeah, oh yeah.

Zoe Singer's reminding her best friend, Sarah Kornbluth, about how the two would hang out and talk about growing old together.

Kornbluth: Yeah, lots plans about aging.

Singer: We looked forward to getting old.

Zoe and Sarah have been BFFs for more than 30 years and they're adorable.

Kornbluth: We share a brain.

Singer: That's a good one.

They grew up in Brooklyn just blocks apart. They'd fall asleep talking on the phone, and then in the morning, wake up and start talking again. They shared everything.

Singer: Yeah, so we shared a boyfriend. I mean we didn't share him, we just each took a turn with him.

Heppermann: So sharing a house doesn't seem like a stretch.

Kornbluth: No.

I know, it sounds crazy. But some housing experts say collective home ownership is not totally insane. And here's why: Mortgage rates are at an all-time low. Rents continue to rise. And banks, well, if you haven't heard the news, they're not handing out many loans these days. So to get the home you want, in the neighborhood you want to live in, pooling financial resources can actually make sense. Especially for friends like Sarah and Zoe who live in what's called a hot housing market -- think shockingly expensive.

Singer: So yeah, we'd be like wow, there's like a beautiful fourth floor property on Sixth Avenue and... I don't know what it was, Sixth Street, "Let's live there." And then we'd look at the listing and be like "Whoa..."

Kornbluth: "Oh man, I don't have $2 million."

Over the years, Sarah and Zoe talked a lot about how frustrating looking for a home could be. Zoe says especially when she realized that being approved for a $500,000 loan actually didn't get much.

Singer: We started looking at houses and realizing like nobody could afford -- nobody that we knew -- could afford their own house. We could afford half of a house.

Sarah and her husband had the same problem.

Kornbluth: I was talking to Dan about how disappointed I was that we wouldn't be able to afford more than an apartment. Unless, you know...

So they decided to get serious about their dream. The four friends then went down to the bank. And as a group, they were pre-approved for more than $1 million.

Singer: It all of a sudden got real.

Kornbluth: That's true, it got real really fast.

It opened up a lot of options. But buying a home is a personal thing. In a lot of ways, it's just as much of an emotional decision as it is a financial one. Sarah's husband Dan says he felt that way the four of them would go to open houses together.

Friel: Both couples would go and look at a single house, sometimes a pretty small house, and try and figure out how we would all live together and how we would divide it up and get what everyone wanted. That produced a lot of anxiety, a little bit of claustrophobia.

And Zoe and Aaron have this warning: If you plan to co-buy, brace yourself for some opinions.

Singer: It's also the kind of thing where you're parents are like, "Oh God no."

Siegel: Like, "They might be your friends now but they won't be later!"

Everyone's parents are supportive now. All it took was one look at Brooklyn's real estate prices. And the couples did find a home.

Siegel: This place is like labyrinth.

Two homes actually, which is where we are today. Aaron and Zoe and Sarah and Dan are doing a final walk-through. It's an odd property. One house is in the front and another house is in the back, where the yard usually is.

Siegel: Hey Dan, what do you think about this missing pane here?

But it's near the neighborhood where Sarah and Zoe grew up. And Wells Fargo approved them for a $1.3 million, 30-year mortgage at 4 percent. So they're able to gut renovate and build their dream homes.

Siegel: This is going to be the sauna, right?

Heppermann: You're going to have a sauna?

Kornbluth: Yeah, you wanna come?

Heppermann: Yes!

The couples admit there were a lot of ups and downs to get here. For one thing, consensus among four people can take a long time.

Friel: What do you think, should we still buy the house?

Closing on a house usually takes weeks. But for the two couples, it took more than seven months.

Singer: I said, let's buy this place!

Kornbluth: Let's do it.

But buying a home together also made them more prepared than your average home buyer. The group had a lawyer draw up a more than 48-page contract that outlines all kinds of "what if scenarios."

Friel: OK, what happens if one of you dies?

Siegel: What happens if someone wants to sell?

Kornbluth: Even questions like, who's responsible for you know, this area of concrete?

And then of course, they had to be really upfront about money.

Siegel: We got to know each other's finances very well, more than anyone I think I know.

Siegel to Kornbluth: So how much do you have in yours?

Kornbluth: You know, I have to ask at the bank, but I'm pretty sure it's this much.

Which Aaron said made him realize that when you buy a home with friends, you're taking on more than just a mortgage.

Siegel: The things that are the scariest are like, what if one of the couples gets divorced and there's some kind of big to-do about how the property is governed or how it's split up or re-sold. That's a pretty scary thing. But in a way also it's like that's also something everyone who's married probably is worried about in some point in their relationship, like is this gonna last? How long is this going to last?

Singer: We just doubled our chances of having to worry about that.

But in the end, both couples said they found comfort in doing this together. Buying a house is daunting. Risky even. So why not take the plunge with your best friend?

Kornbluth: Zoe, I'm a homeowner!

Singer: Me too!

In New York, I'm Ann Heppermannn for Marketplace.

Kornbluth: This is such a crazy thing!!!

The back house, where Dan Friel and Sarah Kornbluth live. The front house will be occupied by Zoe Singer and Aaron Siegel.

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