What should LGBTQ couples be aware of when buying a home together?
by Jeff Hammerberg | October 2, 2018
Life is full of milestones, and buying a home, particularly a primary residence, is one of the biggest. It is an exciting moment, and a key part of dreaming and planning for the future. It can be especially exciting when you're making that decision with your spouse or life partner, as the purchase of a home is a very special and important part of a couple's story. At the same time, it can be daunting, and occasionally intimidating to navigate the home-buying process. There is much to consider, and often many factors to weigh.
This truth applies to all couples, and perhaps particularly so to couples in the LGBTQ community, who, in the wake of the 2015 decision by the United States Supreme Court in Obergefell v. Hodges, happily now have a right to marry, regardless of where they live. The dawn of marriage equality in the United States has opened new doors to married LGBTQ couples wishing to purchase a home together, and in this article, we'll explore those options, as well as options for couples who wish, for whatever personal reasons, not to enter into a legally recognized marriage or domestic partnership. Whatever choice a couple makes, it's important to think through potential options, and to be knowledgeable about key factors to consider.
The adage “Location! Location! Location!” is relevant to all home buyers, but for LGBTQ couples, consideration of location can take on an added layer of importance. While some couples may not feel an urgent need to be in the most vibrant, actively gay community in the country, everyone still wants a place where they feel accepted as and for who they are. As Ineke Mushovic, executive director of the Movement Advancement Project said, “Choosing a home is one of the most significant decisions in people's lives. “ Muschovic noted, “For many, a primary consideration isn't just the house, but whether they will be moving to a neighborhood where they feel protected and supported.”
To this end, companies like Trulia and OKCupid offer a service called the “Neighborhood Pride Score,” which uses OKCupid data on the location of gay singles, combined with U.S. Census data on the location of gay couples, cross-referenced with house prices in those areas. There are also a plethora of other available online resources to investigate whether a potential neighborhood would be a good fit, and of course making a visit and talking to residents are both good ideas as well. Finding a neighborhood where you truly feel at home has a value far beyond the dollar price of the home itself, though diversity helps in that regard too.
Diversity has repeatedly been found to be good for economic development and housing prices, and according to recent articles in both MarketWatch,and Fortune, America's gay neighborhoods recovered from the 2012 housing crisis as a rate faster than non-gay neighborhood, and only continue to grow and flourish, as home values continue to appreciate in value. The enormous buying power of the LGBTQ community is one reason they're significantly contributing to the real estate industry. In 2015, the U.S. adult LGBTQ population had $917 billion in combined buying power, according to an analysis by Witeck Communications. Couples would be wise to thoroughly research location, and to wield that power to their benefit by finding the ideal home in the perfect neighborhood, with the help of a full-time professional realtor at GayRealEstate.com.
On a note related to choosing the perfect neighborhood, it is critical to investigate policies pertaining to LGBTQ housing discrimination at the county, city, and state levels before deciding where to settle. While the Fair Housing Act theoretically provides protection from housing discrimination, unfortunately the act doesn't explicitly mention sexual orientation as a basis for protection.
Accordingly, when choosing where to purchase a home, couples should ask whether the city they're considering includes sexual orientation and gender identity in its statutes forbidding housing discrimination. There are a variety of ways to conduct this research, including asking your GayRealEstate.com Realtor, and Trulia, for example, offers a “Local Legal Protections” feature, which couples can access to find details on which protections exist, as well as whether those protections are provided at the state, county, or city level. The service is powered by data from the Movement Advancement Project.
Home Ownership Options
Though unfortunate discriminatory hurdles still exist in some locations, Post-Obergefell, LGBTQ couples happily, have far better options available than prior to the decision. Previously, in states where gay marriage was not recognized, married same-sex couples had to choose between either a joint tenancy with a right of survivorship, or a tenancy in common.
A joint tenancy with a right of survivorship ensures that when one partner passes, the survivor owns all of the property, regardless of whether the party is married or not. Joint tenancy has long been, and remains, a sound option for gay couples who want to buy a home together but do not, for whatever personal reasons, legally want to marry. There are drawbacks to joint tenancy situations as well, however – though they ensure rights of survivorship, they also involve a great deal of cost and paperwork, as unmarried tenants must create a will that specifies distribution of assets, in order to avoid any outside challenges.
Another option occasionally used by same-sex couples wishing not to marry include purchasing the property as a tenancy in common, in which each individual owns only 50% of the property, and when one partner passes, that property goes to his or her heirs, and not to the other owner.
Of note, both joint tenancy and tenancy in common are still viable options for LGBTQ couples who, for whatever reasons, are happier not entering into a marriage or a legally recognized domestic partnership. Certainly, every couple is unique, and what might be ideal for one, is not for another. Therein lies the value of being educated on all potential options, and making the best choice for your personal circumstances.
For couples who do choose to marry, following Oberfell and nationwide marriage equality, couples can spend less time and money on estate planning, and more time and money on investing in the perfect home. Married members of the LGBTQ community have the option to hold property as a tenancy by the entirety. Owning a property in this manner provides greater protection against creditors, and the property is automatically considered shared, and jointly owned, 100%, by both parties. Additionally, married LGBTQ couples now receive another real estate perk in the form of capital gains exemptions. Now, couples who have tied the knot can enjoy double the capital gains exemption when selling their primary residence.
Upon deciding which ownership structure they desire, couples should discuss those options with their real estate agent or lawyer to ensure it is properly reflected in the deed to the property. It is also a smart decision to have a clear, and legally sound will in place to clearly reiterate and reinforce any intentions with respect to property, in the event that one partner should unfortunately pass away. Being informed, and taking steps to make intentions clear can spare a good amount of headache and aggravation down the road.
Mortgage and Real Estate Services Options
Once a couple has made the decision to marry or not to marry, and what sort of property ownership structure best suits their needs, it's important to consider the appropriate professionals and lenders to make the home buying dream a reality. Choosing a realtor and a lender who have your best interests in mind is important, and educating oneself about the options is a savvy decision as a homebuyer.
Fortunately, organizations like National Association of Realtors have aligned with the LGBTQ community and have prohibited members from discriminating on the basis of sexual orientation as a matter of policy. While this is generally true, every realtor, like every person is different, and even real estate agencies as a whole can have unique personalities. Some are more LGBTQ friendly than others. https://www.GayRealEstate.com https://www.GayRealEstate.com has taken the headache and uncertainty out of hiring a Realtor – providing a free database of the nation's top LGBTQ/LGBTQ Friendly realtors, in every city coast-to-coast.
As with carefully choosing a realtor, LGBTQ couples seeking to purchase a home would also be wise to consider their various lending options. The United States at large has yet to enact explicit protections from discrimination on the basis of sexual orientation on a federal level with respect to credit, for example. Because of this, mortgage lenders can deny same-sex couples a home loan based on their sexual orientation with little to no legal recourse. While some members of the LGBTQ have effectively used the Fair Housing Act to argue against discrimination based on sex as a way to protect themselves, as noted above, the act doesn't explicitly mention sexual orientation.
For this reason, among others, advocates and supporters of the LGBTQ community are lobbying for passage of the proposed Equality Act. This bill, which was introduced to Congress in 2017, would amend the Civil Rights Act of 1964 to ban discrimination on the basis of sexual orientation, sex and gender identity in credit and housing as well as employment, public accommodations, public education, federal funding and the jury system.
In the meantime, it is helpful and smart for couples to investigate lenders on their own, and ask important questions like, whether the company has its own gay mortgage desk, and whether insurance protection can cover both partners. And, as with real estate companies, certain lenders are known to have a more LGBTQ friendly attitude generally, which is important information to have in making a decision. A great way to start is to ask for a referral from your gay real estate agent. Here's a link to the Top 10 Mortgage Lenders “How LGBTQ Friendly Are They?” (https://bit.ly/2NLEHmX)
Happy Couple, Happy Home
In the end, every couple is unique, just as every home is unique. Finding that home to share together is an exciting, rewarding moment in a couple's journey. Purchasing a home that will become a place to share great memories with your partner for years can come is one that requires plenty of research, but also one that brings much happiness.
Jeff Hammerberg is the founding CEO of GayRealEstate.com. Serving the home buying and selling needs of the LGBTQ community for over 25 years!
Jeff Hammerberg | Founding CEO
Hammerberg & Associates, Inc.
135 S.Ct. 2584 (2015)
The Movement Advantage Project is an independent nonprofit organization that provides research on equality for LGBTQ people. http://www.lgbtmap.org
“LGBTQ Homebuyers Have a New Tool to Help Find the Right Place to Live,” Sandy Smith, www.phillymag.com, February 9, 2018.
“Why House Prices in Gay Neighborhoods are Soaring,” Quentin Fattrell, www.marketwatch.com, July 23, 2017.
“Gayborhoods: Real Estate's Mysterious Same-Sex Couple Premium,” Chris Matthews, www.fortune.com, June 11, 2015.
“LGBTQ Community Has Massive Buying Power, but Little Protection on Mortgage Bias,” Natalie Campisi, www.bankrate.com, September 25, 2018.
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