Condo or Townhouse? Which is the Right Move for You?

For first time home buyers, condos may be the perfect entry into Northern Virginia real estate. Others may prefer townhomes, but why? How do you make the best choice for you?

Is 2013 the year you will buy your first home?  Whether you have lived here all of your life or you are a transplant, the sticker shock always hits when buyers start sizing up homes relative to their needs, hopes or dreams.  For some, condominiums are the answer that most closely provides an affordable home option that meets all criteria.

Others look to condos when it is time to downsize.   When all the little ones have grown taller than their parents and moved away to begin lives of their own, gardening and lawn maintenance can seem a less appealing way to spend your free time. 

Townhomes also appeal to buyers for many of the same reasons.  They offer better affordability than detached homes and small lots require less attention and upkeep.  These similarities can mean that townhomes and condos compete for the same buyers.   Making the right choice leads to a satisfying experience but making the wrong choice can lead to frustration and can even cost you money.   Education, due diligence and introspection are the keys to ensuring that the decision you make is the right decision for you.

  • Education  One of the most important reasons to hire a Realtor is education and for buyers considering the purchase of a condominium, it is imperative to  understand condo ownership as it differs from fee-simple ownership.  For many people, the word condo is synonymous with a type of housing, i.e. apartment style housing and some even think of it as buying an apartment.  “Condo” or “Condominium” actually refers to a type of ownership.  Condominium ownership is specific to a unit in a multi-unit property and also includes ownership of a share of the common area or elements.  Condo owners do not own the land their condo sits on but own a share in the rights and responsibilities of all of the property and improvements.  Townhomes are typically owned in fee-simple but sometimes have condo ownership.


Fee simple ownership provides more rights but also more responsibilities.  In fee-simple, property owners have absolute right to the structure and the land, subject only to public or private restrictions such as zoning or home owners association by-laws.  Interpreting what that means in the context of a certain property is an important function of a Realtor.

Realtors also provide education about the housing market.  Sometimes buyers look at the listing price alone to decide that condo ownership is right for them.  Plum Street Properties Realtors ensure clients look at the larger picture, which includes the cost of the monthly condo fee.  With fee-simple ownership, each homeowner can choose to put aside monthly for maintenance expenses or just handle expenses as they come a long. Fee-simple ownership allows homeowners to be do-it-yourselfers or hire contractors if they wish.   Condominium associations collect money on a regular schedule to cover maintenance.  Since condo owners own what is within the walls of their unit, the condo fee ensures the maintenance of what is outside those walls and the property on which the structure sits.  For this reason, the condo association fee is typically larger than fees associated with fee-simple ownership, i.e. homeowner’s associations.

It is also important for buyers to consider the strength of the condo housing market relative to the market as a whole.  In 2008-2009 as the housing market declined for us all, condominiums took a big hit, values declined more steeply and units sat on the market for many months without an offer.  Generally, the condo market tends to be more volatile than others, which in certain circumstances can mean getting a great deal for buyers but could also mean a loss for sellers. It is certainly a conversation that buyers should have with their Realtors.

  • Due Diligence  Due diligence is essential in all real estate transactions.  Buyers rely on Realtors to guide them in conducting due diligence to discover all of the information pertinent to a specific property.  Conducting all of the needed inspections is one example of this.  The review of association documents is important whether ownership is by fee-simple but subject to a homeowners association or as a condominium.  Associations are required to provide not only by-laws, or rules, but also an accounting of any unpaid assessments for a particular unit or home, any special assessments for expenses and the status of replacement funds. 


Unless you are a lawyer or an accountant, this is not the fun part of a real estate transaction but it is one of the most important.  Some homebuyers tend to give these documents a cursory look just ensuring there are no liens or judgments.  Plum Street Properties Realtors want you to do more.   Read through the expenses and note what is typical.  Then look at the reserves.  Associations should have one or more reserve funds to put aside money for big ticket or infrequent expenses.  In a condo association, this would include things like a roof or exterior siding.  In a homeowners association, reserves may be set up for items like repaving a non-public road or maintenance of a storm water management system.  Do the expenses make sense in the context of the property?  Does the amount being collected and the amount in reserve make sense based on the anticipated time frame for replacement?  Too little collected means a special assessment is coming your way or too much collected means it costs you more money than it should and you have a slush fund. 

  • Introspection The final point is we want home buyers to be introspective to evaluate their options and needs.  If you have educated yourself, done your due diligence and now need to make a decision to buy a townhome or a condominium, it may come down to control versus responsibility.  Condo ownership provides less control and less responsibility.  It may be the best option if you don’t need or desire control of all of the details of your surroundings.   It may be a great option for those who enjoy a landscaped exterior but don’t want to take responsibility for the maintenance of a yard. Ownership of a townhome in fee simple provides more control but also requires more responsibility.  You may be responsible for your own lawn maintenance.  You have control over the time frame for maintenance of your home but you will be responsible for maintaining your home to the standards set forth by the association’s architectural guidelines. 


Finally, after education, due diligence and introspection comes communication. Communicate your findings to your Realtor so that we can help you find the perfect place that meets your needs.  At Plum Street Properties, that is our specialty!

Contributed By: Susan Hussey, Partner, Plum Street Properties


This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.


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