YOU’VE HEARD the old playground song, “First comes love, then comes marriage, then comes (fill in the blank) in the baby carriage.”
Nowadays, that song might go something like this: “First comes love, then comes a mortgage, then comes marriage…”
There used to be a time when a man and woman never moved into a house together before they married. Even then the man often was the sole owner.
Times in the 21st century have definitely changed.
A new survey released recently by Coldwell Banker Real Estate found that buying a home together has become the new engagement ring.
According to the study, nearly a quarter of married homeowners between the ages of 18 and 34 purchased their home together before their wedding vows, compared to only 14 percent of those 45 and older.
“A lot of it is related to their careers, and they’re putting off having children – the three steps have gotten out of normal order,” said Pat Steele, managing broker of the Coldwell Banker office in Virginia Beach and the chairwoman for the Hampton Roads Realtors Association.
Many people are coming out of college with student-loan debt, and so their post-college income doesn’t go as far as it used to, Steele continued. By combining two incomes, they can buy a home together, make an investment and make their money stretch, she said.
“If both of them are paying $1,200 to $1,700 (in rent), they can take that income and combine it, take advantage of those low interest rates,” and own a house, Steele added.
Although Cathy Kurchinski and her fiancÃ©, Navy command master chief Steve Fontenot, skew a little older than the folks in the Coldwell Banker survey, the couple recently renovated a one-story house off Shore Drive in the Lake Shores neighborhood of Virginia Beach while engaged.
When the couple got serious about living together, they decided to search for a house they could buy together, Fontenot said. After a couple failed attempts, Fontenot said he was done looking.
But Kurchinski found the fixer-upper on 1.3 acres with a dock on Little Creek Reservoir that has allowed the couple to spend time remodeling and living outdoors, with Fontenot fishing and both gardening, before they tie the knot.
But the couple is aware of the legal ramifications if something should happen to either one before they wed.
Fontenot said he and Kurchinski plan to sign a “co-habitation agreement,” which will allow one of them to live in the house if something happens to the other. Because both have children from previous relationships (he is divorced, she is widowed), they understand dealing with the estate is unique compared to other couples who are just starting out.
Still, real-estate attorney Albert Hartley, owner of the Hartley Law Group in Chesapeake, warns against buying property together if you’re not married. He runs down myriad stories of couples who didn’t have a plan when it came to buying property with someone they were not legally bound to.
He also noted that the issue of owning and being legally wed hits gay and lesbian couples particularly hard because the state of Virginia doesn’t recognize same-gender marriages.
“If you’re going to do it, then you’re going to have to have a really specific exit strategy,” he said. “You have to have vertical alignment of all your estate planning documents, your real-estate documents and business documents. They all need to say the same thing.
“You don’t want your will to say one thing and your deed another.”
Hartley said he has sometimes seen a deed convey part of a property to someone that a person never intended – when that person changed his or her will but failed to change the deed.
For example, if a husband’s and wife’s names are on a deed, but the husband’s will says he doesn’t want his wife to have the property, but he wants their kids, or his kids, to have it, the deed takes precedence, Hartley said.
In the Kurchinski/Fontenot example, Hartley said, a co-habitation agreement might be an enforceable contract, but the agreement “is only good if it’s in the deed.”
“If a couple’s going to be married, they need to put into the deed how much money they’re putting into it. They need to have a plan,” Hartley said. “I do pre-nuptial agreements for clients that are enforceable against their estate.”
Steele has seen legal nightmares when it comes to the scenarios that can happen to people who own a home together before they tie the knot.
What if the house goes into foreclosure? What if the couple has a child or children together and they split up, or one passes away?
“If they’re not equally yoked in a relationship, and something goes wrong, there’s both an emotional and financial situation that comes into play that can spread out to their extended families,” Steele said.
Hartley said people must understand the language of Virginia’s laws when it comes to owning a house together, even when you’re married. In Virginia, the deed has to have the terms “tenants by the entirety with the right of survivorship” for married couples, Hartley said. In other states, if you’re married, it’s read into the deed. In Virginia it must be spelled out, he said.
Hartley added: “What did Tina Turner say, ‘What’s love got to do with it?’ ”
According to the Coldwell Banker survey, love and property go hand in hand.
The survey found that more than one in three married homeowners (35 percent) purchased their first home together by their second wedding anniversary.
It also showed that millennials (those born from 1980 to 2000, according to demographers) are less likely to wait until marriage to buy a home together; 24 percent of married homeowners ages 18 to 34 bought a home together before they were married.
The survey found that only 16 percent of married U.S. adults have not purchased a home together with their current spouse.
For those using a VA loan, typically couples must be married if they’re in the military, according to Joe Kersey, senior mortgage banker with Atlantic Bay Mortgage.
For Federal Housing Administration loans for traditional bank loans, it’s typically not an issue, he said.
“From a loan standpoint, the banks could care less,” Kersey said.
“Where you see it most is on FHA loans,” Kersey said, where first-time buyers need two incomes to qualify for the loan.
It’s “driven by financials,” Kersey said.
For Kurchinski and Fontenot, purchasing their haven of a home solidified their commitment to one another.
Plus, “we’re both practical,” Fontenot said., “It’s just such a waste to rent.”