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A guide to property co-ownership

Before you enter into any arrangement it is critical you talk to your solicitor / conveyancer / accountant as everyone’s situation is different. When working out the legalities, think about the worst case scenario and plan to address that…better to be prepared than not.

Choose your partners carefully

Buying a property with a friend or family member is a massive decision – make sure you choose someone you trust, who shares your views and passions about property. Protecting your friendship and relationships should be paramount.

Finances discussed in DETAIL

Make sure you clearly understand your family or friend’s financial situation; can they cover their share of the home loan, are there any potential cash flow problems that might impact on your meeting the joint home loan repayments. All financial decisions must be discussed and documented.

Check you have aligned property goals

Ensure your property purchase goals aligned. Make a list of the must have’s and nice to have’s. List down the suburbs that you agree on, neighbourhood features, and property specifications such as an apartment, house, block size, structural requirements, whether it is an investment or whether you are going to live in it together etc

Discuss how you will exit from the co-ownership partnership

Having an exit strategy is important. Make sure you consider what will happen if one of you dies or becomes seriously ill or disabled (not a nice thing to consider, but important), or if one of you gets a cut in pay or a losses their job, goes bankrupt, the relationship changes, the property is sold at a loss or one owner wants to sell before the other. Having clarity from the beginning can help you be prepared for the worst.

Determine the structure of the property ownership

There are 2 main ways to structure co-ownership purchases – Joint Tenants or Tenants in Common.

Tenants in Common refers to ownership over a property where the owners don’t automatically have a right to survivorship (for example friends or siblings). There can be a number of owners and the shares in the property don’t need to be equal. For example 2 people can buy a property for $400,000 and one of the buyers may put in $300,000 therefore owning a share of three quarters. Or the 2 people may decide to go 50/50 and own equal number of share.

Joint Tenants refers to property ownership in which each party on the title holds an individual interest in the property. It comes with the right of survivorship meaning that when one of the joint tenants die, the interest of the deceased passes to the surviving joint tenant and is not considered part of the estate of the deceased.

Before you decide on the best structure for you talk to your conveyancer or solicitor about your individual situation and objectives.

Co-ownership agreement drawn up by your solicitor / conveyance

Avoid arguments by agreeing things in advance and getting it written up by a solicitor. A co-ownership agreement can help protect you and your friendship and should cover every possible issue, rule and solution. Think worst case scenarios and determine how to resolve the issues. For example you may agree that if one wishes to sell, the other co-owner has first right of refusal to buy their share of the property. Forward planning can help prevent dramas later on.

Find the right home loan

Talk to your home loan provider about the right loan for you. There are options to have joint home loans and ones that are specifically designed for co-owners. Make sure you get independent advice on what will work best for your personal circumstances

Get independent legal advice

It is essential that you get independent legal advice from your friend or family member, to ensure you lead with your head not your heart.

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Document everything

Keeping a record of every discussion, all payments, expenses and an inventory of individually owned items and shared items.

Research the market

Rushing in and buying the first property you see without doing any research into the national and local market, the neighborhood and even the street is a mistake. Knowing how much similar properties are selling for in the area is important so you don’t pay too much. Your local LJ Hooker agent have local market reports that can help you understand the market, plus attending multiple open for inspections and auctions will all help ensure you become a bit of a property expert. Use our handy inspection checklist and keep notes on why certain areas offer higher prices than others…don’t rush into any purchase you might regret.

8 must know terms if you’re buying at auction

Auctions can be fast-paced with bids flying to and fro. Increase your chance of buying your dream home at auction by understanding these key auction terms.

Bidders Guide

Auctions can be a huge thrill ride, no matter what side of the transaction you are on – but you want to be able to keep up with what is going on! Auctions can be fast-paced with bids flying to and fro – by getting clued up on these key auction tips, you will soon be able to bid it out with the best on the block.

The bidder’s guide is a document that must be provided to bidders by the selling agent before an auction. It gives information on how to register for auction and what paperwork needs to be filled out, the relevant privacy laws and the rules and regulations of the auction. Make sure to get one of these before you start to seriously plan out your bidding!


Usually beginning about half an hour before an auction, the inspection period is important for anyone seriously considering getting in on a property at auction. It isn’t just a final chance to see the property up close, it is also an opportunity to get a final look at the relevant documents for the home, such as the terms of settlement – as Consumer Affairs Victoria (CAV) says, you won’t be able to change these if you win the auction.


One of the most crucial terms, the reserve is effectively the point at which the auction becomes “live”. If bidding does not go over the reserve then the property generally does not sell. However, once bidding goes over a reserve price the property is on the market and a winning bid is binding, so make sure you don’t over-extend your budget or get carried away in the heat of the moment – in some states there is no cooling-off period, which is a set amount of time in which you can back out of a deal.

Rises and Advances

This is the amount by which bids increase during an auction, and according to CAV are usually dictated by the auctioneer. They could be $500 or $5000, and do not necessarily have to be adhered to – but the auctioneer can reject your bid if they think you have not advanced the bidding by enough.

Vendor & Dummy Bids

It’s important to understand the term vendor bid and the difference between it and dummy bids.

Vendor bids are a single bid made by the auctioneer on behalf of the seller. The purpose of this bid is to help the property achieve its reserve price.

The auctioneer is entitled to bid once on behalf of the seller. If this bid is to be made during the auction, the arrangements for making the bid must be set out in the rule displayed before the auctions starts and the intention to make a bid should be announced by the auctioneer at the start of the auction.

A dummy bid on the other hand is a false bid made by a non-genuine buyer. All dummy bids are illegal and attract significant penalties for the vendor, the dummy bidder and in some cases the agent if it can be proved they solicited the bid.

On The Market & Passed In

During the course of the auction, the auctioneer may stop the proceedings and say they are seeking advice or instruction from the vendor. This gives the auctioneer time to discuss the progress of bidding with the vendor.

If the bidding has reached the reserve price, or is close, the auctioneer will ask the seller if they are willing to sell the property for the highest price. If they are, the auctioneer will announce to the crowd that the property is on the market or rather that it will be sold to the highest bidder.

If the bidding does not reach the reserve price or a price the seller is happy with, the property may be passed in. In this case the highest bidder would be given the first opportunity to negotiate a sale with the seller.

There is a lot to take in at the auction yard, and one of the best ways to learn the ropes is to get down and see some auctions yourself. You could contact a local real estate agent to find out where the next one is happening in your area to get in and get researching!