While being married simplifies the process when two people buy real estate together, it's not necessary. Usually the purchase contract between the buyer and seller is the same whether or not the buyers are married, and the closing process is the same. Where additional contracts become necessary, though, is to protect the interests of the two parties. If things go wrong, laws that apply to married people won't be of any help.
When you buy a house together, you essentially become business partners. That business -- owning a home -- can outlive your personal relationship. Setting up a contract that specifies what happens with the house if you break up helps to protect both of you from being in an unpleasant situation at the end of your relationship. Nothing is automatic when you split up as an unmarried couple, so the only way to get not only an equitable distribution but a quick one, is to come up with an agreement in advance.
The language on your deed determines how you hold title. You could choose to have only one of you own the house as a sole owner, which simplifies things since there's only one legal owner with rights to the property. If you both want to be owners, though, you have two choices. When you own as "tenants in common," both of you have an equal right to use the house, but you can each own separate shares financially. You can also sell or transfer your shares separately. On the other hand, if you take title as "joint tenants with right of survivorship," you both own the house together and can't sell your shares separately. When one of you dies, the other one automatically gets the entire property.
Planning for what happens after you die is particularly important when you're unmarried. If you don't hold title as joint tenants, your ownership in the house won't pass to your partner. In fact, barring an estate plan, your partner could end up living in the house with your heirs -- or with people they rent or sell their interest to -- if you hold title as tenants in common.
Common Law Marriage
In some states, you can be married even if you don't formally get married. Twelve states recognize some form of common law marriage. If you live together and act as if you're married, you could end up being considered legally married under that state's law. In one of these states, your house could become a part of your marital estate, and your partner could have the same rights as a spouse. It can be hard to tell at what point you're actually legally married under common law, so you might need to contact an attorney to be sure.
Steve Lander has been a writer since 1996, with experience in the fields of financial services, real estate and technology. His work has appeared in trade publications such as the "Minnesota Real Estate Journal" and "Minnesota Multi-Housing Association Advocate." Lander holds a Bachelor of Arts in political science from Columbia University.