Co-owners spoke, we listened

Pam Hughes
June 7, 2023

We founded CoBuy in 2016 after struggling to co-buy a home as a family. We're builders, finance, and real estate experts, and still we underestimated the complexity of co-buying and co-ownership. CoBuy started as a mother-and-son team. Our first investor is my life partner, who happens to be a custom home builder. We share some of our earliest discoveries in our story here. 

The systems for homeownership fail to serve the unique needs of co-owners. Need proof? Check this out:

It's well-intended, but focuses on "families." I suppose that is the problem. What constitutes "family" today is not what it was when our financial systems were in their formative years. Unfortunately, these very systems ignore how society has evolved through time. Today, folks are buying together for financial and social reasons. 

We decided that we had to do something. Homeownership is the foundation for financial stability and security. That's not to say homeownership is for everyone, but most would agree that buying a home is a life-changing experience. Teaming up can open up a world of opportunities. We wanted to help people build wealth, starting with owning a home. So, we did.

The Real Estate industry shafts co-owners

During the years of the Great Recession, new home building came to a halt. As the housing industry recovered, housing starts were slow to resume. Many home builders left the industry and did not come back. The nature of home building is that it takes time. So, demand for housing recovered much faster than inventory did. 

At the same time, the housing stock aged. Over the past decade, rising prices for the limited land supply and growing costs for wages and materials have kept the inventory for homes low. Demand has been steadily increasing. First-time buyers and move-up buyers have less to choose from! 

Real estate industry professionals--real estate agents and loan officers--are salespeople. They get paid on commissions. The home-buying process is complex, opaque, and inefficient. For instance, many real estate agents are not entirely in the loop with the loan process and may not be privy to their client's financial situation. That can make it challenging to advise a buyer, let alone a group of buyers, regarding whether or not making an offer makes sense.

Often, a real estate agent's knowledge ends where the loan officer's knowledge begins, and vice versa. Bad news for the market! To most would-be homeowners, it's all one transaction. But the home purchase process is actually a series of processes that often don't fit seamlessly together.

The complexity in the purchase and sale of real estate means that the "pros" often don't know what they don't know. Sometimes, even when they do, they simply choose the path of least resistance. Most real estate professionals are neither equipped nor incentivized to serve co-buyers, let alone co-owners! 

Building the first co-buying platform

Following our own journey, we built the first co-buying platform to serve folks looking to buy a home with friends, family, or loved ones. Demand poured in from around the country and the globe! To meet demand, we iterated our platform and built a network of CoBuy-certified™ Professionals to help co-buyers navigate the process with step-by-step guidance:

  1. Plan and build consensus
  2. Determine readiness
  3. Secure a joint mortgage
  4. Search, negotiate, transact
  5. Structure co-ownership
  6. Protect against risks
  7. Develop an exit strategy

It was tough in the early days! We were monetizing through a commission-sharing arrangement with the buyers' real estate agent, which allowed us to offer our service for no added costs to co-buyers.

First off, convincing industry incumbents to work with co-buyers was a minefield. Some real estate agents and mortgage pros struggled with the nuances around co-buying. Others saw the complexities as speed bumps on their way to a sale. Why spend their limited time and energy on more complicated cases? Next, the agents' focus tended to be on closing a deal rather than working for the best interest of co-buyers. That goes against what CoBuy is all about. Finally, some co-buyers came to us already having selected a real estate agent based purely on acquaintance. These circumstances did not support our customer-first model. 

Looking past the purchase

We resisted calls to deal with folks who had already co-bought a home. Our focus was helping co-buyers set things up correctly from the start. Otherwise, the likelihood of failure was too high. But folks who had already purchased continued to ask for support, and many asked for help creating a co-ownership agreement. Over six years, we learned that people actually want a decision-making framework. They want to know how to manage an asset day-to-day as co-owners. They want to know what they need to consider--and decide as a group--to protect themselves, their relationships, and their joint investment. Many co-owners understand this is a dynamic thing, not a one-and-done decision. Shared ownership, like a business, requires active management. Co-owners face financial, legal, risk, and social considerations. They need to map out ownership structure and manage roles, rights, and responsibilities--including admin. Then, of course, there's planning an exit strategy. 

Eventually, our transaction-oriented business model focused on joint home purchases proved a limiting factor. We were turning folks away because they were in a state where we didn't have CoBuy-certified™ real estate agents, they had committed to using an agent from outside our ecosystem, or they already co-own a home. Conundrum! We started CoBuy to unlock homeownership and wealth creation. We had to think bigger. So we listened to our audience and re-booted to serve co-owners across the U.S. (for now). Of course, co-ownership spans national borders, and so should we.

Digitizing co-ownership

Unleashing ourselves from the constraints of a transaction-based business enables us to serve folks anywhere, anytime. But a journey of a thousand miles starts with a single step!

Enter Shared Homeowner OS™. In May 2023, we launched an invitation-only Private Beta to a select group of co-owners, including past CoBuyers, prospects, friends, and family. This June, we kick off the second cohort for our Private Beta. With Shared Homeowner OS™, co-owners can plan, structure, and manage co-ownership in one place. The goal hasn't changed: we're here to unlock homeownership and wealth creation. 

We look forward to working with you to co-create a better future for households of all types. Thank you for your continued support, input, and feedback. We are forever grateful and excited to help you and yours!