Co-Ownership Home Buying Process - Key Differences | Pacaso

Pacaso transactions differ from traditional purchase — in good ways

Laura Vecsey

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Real estate co-ownership isn’t new — families and friends have jointly owned vacation homes for ages. But DIY co-ownership can be difficult to implement. That’s where Pacaso comes in, bringing professionalism and real estate expertise to the table. 

Pacaso buys an amazing home and creates a property-specific limited liability company (LLC) with a maximum of eight owners. Each home is professionally managed and maintained by Pacaso. Add Pacaso’s equitable and easy SmartStay system for scheduling time in the home, and the traditional pain points of co-ownership are history. 

As a trusted partner to second home buyers, you want to be ready to clearly explain the similarities and differences between whole home buying and buying a Pacaso. Here are the key points:

What’s the same?

  • The buyer is a deeded owner of a real estate property asset. Pacaso acts as the third-party manger of the LLC but is not an owner.
  • Real estate agents receive standard commission for their work and act as advocates for the owners. 
  • Buyers can finance their purchase. They can also use other sources such as a HELO, credit line or cash. 
  • The legal forms and closing process will be largely the same as a standard home purchase. (A few differences are noted below.)
  • Owners can sell their Pacaso anytime after the first 12 months of ownership, listing it at the price they choose. (Fellow owners have first right of refusal.) 
  • Taxes

What’s different?

  • Pacaso buys a portion or the whole home directly from the seller, negotiating the best price. 
  • Pacaso forms a property-specific limited liability company and signs the closing paperwork on behalf of the LLC. 
  • Each buyer can purchase the “amount” of home they’ll use, ranging from 12.5 to 50%. (This gives buyers the chance to co-own a more expensive home than if they were buying a whole home.)
  • Pacaso offers up to 50% financing and a competitive 10-year adjustable rate mortgage for qualified buyers. Pacaso serves as the corporate guarantor of the loan.
  • Each buyer signs an owner-operating agreement for the LLC; they now collectively own 100% of the home together. 
  • Owners can plan their finances, knowing that annual fees are equal to 1% of the ownership value and include monthly operating expenses. 
  • Owners divide property management and maintenance costs equitably and are included in monthly operating expenses. 
  • Pacaso handles the property management, bill paying and provides the scheduling technology to ensure equitable access to all owners based on their shares in the home.
  • Pacaso assumes financial responsibility if an owner defaults on payments, protecting the home’s other owners. 

With Pacaso, “different” is a smart, new way to help more people realize their dream of second home ownership. 

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