Buying Property with Family or Friends? Read This Before You Enter Escrow

Escrow Doesn’t Fix Family Drama

Co-buying a home with family or friends is becoming more common, especially in California’s wild real estate market. Whether it’s siblings investing together, unmarried partners purchasing their first home, or friends pooling resources for a rental property, shared ownership sounds smart. But without legal clarity, it can get messy fast.

Spoiler alert: Escrow won’t save you from relationship fallout, money disputes, or ownership confusion.

Why People Co-Buy in the First Place

• To split down payments or mortgage payments

• To help family members into homeownership

• To invest in real estate without going solo

• To buy a home before marriage or instead of it

It’s financially strategic, until it’s not.

Where It Goes Wrong (Even in Escrow)

Escrow is a neutral third party that manages the transfer of funds and documents. But escrow officers cannot give legal advice or protect you from making bad decisions.

Some common legal issues that happen when co-buyers skip proper planning:

• One party wants to sell, the other doesn’t

• No written agreement on who pays what

• One co-owner defaults on payments

• Breakups, family disputes, or sudden deaths

• Unequal contributions with no clarity on rights

  
  

And if these happen after you close? It’s too late to go back, and you may end up in court.

What to Do Before You Enter Escrow

1. Hire a Real Estate Attorney Early Get legal advice before you submit an offer. Escrow is procedural, not protective.

   
   

2. Draft a Co-Ownership Agreement A written agreement should cover:

   
   

   • How ownership is divided

   • Who pays what (mortgage, taxes, repairs)

   • What happens if someone wants out

   • What if someone passes away

   • What if one party wants to rent the property

     
     

3. Decide on Title Structure Will you hold title as joint tenants, tenants in common, or a trust? Each has different legal consequences, especially around survivorship and inheritance.

   
   

4. Consider What Happens if You Break Up (or Fall Out) It’s awkward now… but far better than dragging your ex, sibling, or best friend through a lawsuit.

   
   

Escrow is a Process. This is a Relationship.

When you co-buy property, you’re entering a financial marriage. Escrow will handle your transaction, but a real estate attorney helps you avoid regret.

At Sara Naheedy Law, we help California clients create clear, legally binding co-ownership agreements that protect both your property and your peace of mind.

Interested in co-buying? Don’t sign anything until you know where you stand. 

👉 Book a consultation today.