First-Home Buyers Report: Would you buy a home with your sibling? These Sydney first-home-buying brothers show how

The thought of buying a home with a brother or sister, after years of early cohabitation and sibling bickering, may at first be laughed at.

But for the Mikl brothers, Mattias, 25 and Carlos, 22, it was an opportunity to get that all-important first step onto the property ladder.

“Mum pushed us into it. We didn’t really think it was an option at first, to be honest,” says Mattias. “I always thought it [buying a home] was out of our realm. Then it clicked that it was achievable.”

“You just want to get started as soon as possible. There’s no point putting money into rent when you can buy,” Carlos said.

The Mikls purchased their three-bedroom Summer Hill apartment in January this year. The move came as older brother and marketing professional Mattias had grown out of living in a share house. Meanwhile pharmacist Carlos was ready to move out of the family home.

The brothers received a financial gift from their mother to help to contribute to a 10 per cent deposit. Having their two names on the mortgage meant the size of their home loan increased.

“To get the mortgage size we wanted, we would both have to have our names on it. Otherwise we wouldn’t have had the buying power,” says Mattias.

“We didn’t want a one-bedroom or studio. It had to be substantial.”

The brothers are not alone in partnering up for a home purchase. With Australians marrying later – for men at 32 and women 30, according to latest census figures – a new trend is emerging. Instead of holding out for a romantic partnership to purchase a home, some young Australians are turning to siblings to tap into the market while still young.

It is an attractive time to buy with various grants and assistance programs currently on offer to first home buyers in NSW including the First Home Buyers Assistance scheme, First Home Loan Deposit Scheme and the HomeBuilder grant.

But what needs to be considered when buying with a sibling? A legally-binding agreement on the terms of ownership and securing the right home loan are crucial to avoiding conflict, according to experts.

“You’ll need to document everything really carefully,” Darryl Browne, principal at Browne Linkenbagh Legal Services, says.

“The document is usually called a co-ownership agreement and it’s reasonably common for those outside a domestic relationship.

“One of the things the co-ownership agreement does is include a right of first refusal. It would mean that if I wanted to sell, I’d have to offer it to the other person first and vice versa. Normally there would be some way to agree on the figure or, if there’s no agreement, an impartial determination of valuation.”

He says it is also important for family buying together to look at other scenarios that could potentially breed disagreement. One of these to consider is the scenario where one sibling wants a partner to move in while the other wants to rent out the property instead.

In terms of applying for a home loan outside of a domestic relationship, there are a handful of options available depending on the level of financial privacy wanted by each party according to Stephen Roberts, senior home loan specialist at Domain Home Loans.

“In terms of structuring, it is the most simple to structure the loan as if they were a couple and most banks will allow a split loan, so that the loan can be split according to the percentage of ownership,” says Roberts.

“There are some banks that allow for completely separate applications. This is designed to keep the financial information completely separate, but is much more restrictive in terms of available loan product.”

The decision by the Mikl brothers to go with a three-bedroom apartment is paying off for them as they remain in the early days of knocking down their loan. They have rented out the third bedroom to one of Mattias’ friends to help contribute to their home loan repayments.

Home ownership comes with many more responsibilities, costs and concerns than renting and it is important to have someone to take on those challenges. Mattias had taken the lead on most of the decision-making which has kept the peace – Carlos wasn’t even in the country when the apartment was purchased by Mattias.

“Mum just told me they purchased it over a text message. I trusted them.”

They agree that while buying as brothers is working for them, it isn’t for everyone. But if you’ve got a sibling you can stand after decades of sharing as kids, sharing a property could be a chance to get on the property ladder.

This story is part of Domain magazine’s First-Home Buyers Special Edition. For more news on first-home buyers, seeThe first home buyers seizing the chance to purchase off-the-plan in opportune conditions and Seven must-see homes for sale around Sydney for under $1.2 million.