Home Buying in 53703>Question Details

Betsy, Home Buyer in Madison Area, Grand...

What is the difference between buying a single family home and buying a condo?

Asked by Betsy, Madison Area, Grand Rapids, MI Thu Dec 30, 2010

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Good answers by Debbie.

"What is confusing to many people is that "condos" come in all shapes and sizes, and that "condo" is a term that defines the type of ownership NOT the style. If buying a condo, make sure you read and understand the bylaws (rules and regulations).....and be prepared for the maintenace fee to increase over time.......also be prepared for occasional assessments when larger community repairs are undertaken. I had a $2000 roof assessment in my complex a few years ago so all new roofs could be intsalled. Some homeowners were shocked that they had to pay this, as they assumed paying their montly fee would always cover everything.
Not so! "

AND - You don't have to shovel the snow.

Most condo developments accross the board are down. but like anything else.. single famuily homes are down, townhouses are down. Prices are very good if this is the lifestyle that you choose and the market for condo / townhouses is wide open. I was seeing some very, very good prices on short sales and foreclosures in the condo market in my areea. Good time to buy one if this is your thing.

For me.. a single famui;y home is the way to go.
2 votes Thank Flag Link Fri Dec 31, 2010
The condo market in Madison is glutted with inventory. Prices are down 20% ~ 40%. Nearly anyone who bought in 2005 and 2006 is underwater if they didn't have a big downpayment. With this much negative equity, foreclosures and short sales are common if not routine. Underwater Condo Owners are likely suspects to quit paying condo fees. The Association that counts on those condo fees for operating expenses is then pinched for cash when it comes to paying for the usual services: lawn maintenance, master policy premiums, the oh-so-important snow removal and the upkeep and maintenance of any and all common areas and amenities, not to mention the structure, depending on the By-Laws.

When purchasing a condo, it is crucial to evaluate the financial status of the association BEFORE you buy. FHA financing now requires minimums for Owner-Occupied ratios as well as the number of unit owners behind on their fees.
1 vote Thank Flag Link Fri Dec 31, 2010
Condominiums have many different issues to consider when buying. Generally speaking, condominiums have several more restrictions for pets, parking, and updating than homes do. Also, lending can be more difficult, particularly if the condo association is not FHA approved. Many factors go into this approval, from condition of the property to number of units owned and rented, association and management, and reserve funds. On the up side for condos, usually upkeep for common areas (snow removal, grass mowing and tree trimming) are covered by your monthly condo fees. Condo fees can vary greatly in amount and can include various amenities. Some include heat, hot water and air conditioning. Some include special ammenities like a swimming pool and recreation facility. It's important to know exactly what is included in condominiums that you are considering. Your realtor can help you to discover all of the information that you need to consider. Ask for a copy of the "Executive Summary" which briefly outlines the condo assocition rules and amenities. Happy hunting!
1 vote Thank Flag Link Thu Dec 30, 2010
Aside from less maintenance on your part (courtesy of condo fees) and what others have mentioned, from a lender's perspective condominiums are different from other types of housing in that there are common areas of ownership and a homeowner’s association. Unlike single family homes, this creates a situation where other homeowners can impact the financial or physical health of part of what you now or will own (common area) and that requires some special consideration of more than just you and the unit you are financing.
This isn't a plus or a minus, just one of the differences.
Happy Househunting!
Tom
Thomas.Stevens@flagstar.com
1 vote Thank Flag Link Thu Dec 30, 2010
You don't have to shovel the snow at the condo.
1 vote Thank Flag Link Thu Dec 30, 2010
Single family is seperate and a condo you will share walls
Web Reference: http://EveryListingNow.com
0 votes Thank Flag Link Sat Mar 5, 2011
When it comes to the actual buying and the financing you are looking at making sure a condo is approved for FHA financing, where with a single property home you won't have that issue. Also you are most likely not going to qualify for as much of a sales price as you will have to take into consideration the Home Owners Association dues each month which will affect your monthly payment.
Many of the lenders out there are scared stiff of condos, as are a lot of the Private Mortgage Insurance companies. You most likely will have to put a larger downpayment for a condo.
Now besides the financing you may have less out of pocket costs for a condo depending on what the HOA covers. With a single family home (SFR) you have the heat, electrical, water, trash, internet, cable, etc. that you pay for in addition to your monthly PITI.

Sean Wait
Senior Loan Officer
Spectra Home Mortgage
sean@spectrafinancial.com
0 votes Thank Flag Link Tue Jan 4, 2011
The difference is the type of ownership. With a condo you own the unit you live in which can come in different styles: 2 story, ranches, or garden condo apartments, but the land is common property shared by all & typically there is a home owners association , you pay a monthly fee & they maintain the land & sometimes the exterior of the buiilding. A single family home comes in all shapes & sizes, you own the land & maintain both the house & the land yourself. Both are highly desirable depending on your lifestyle & your budget.
0 votes Thank Flag Link Tue Jan 4, 2011
Hi Betsy,

Huge difference........first of all condos and homes come in different styles, prices, locations etc.......condos generally have a condo fee associated with them that will take care of exterior maintenance. Homes have HOA fees that are attached to general upkeep of the neighborhood. Both have bylaws and or governing rules. It comes down to what your needs and wants are. Honestly, to get the best feel for the difference you need to view the difference in applications and the neighborhoods. Your lifestyle and where you plan to be in the next 5 to 10 years will help you determine what will work best for you. Chldren, schools, price, location will all be a factor in your decision. Find a fabulous realtor in the area and spend some time shopping.

If you have questions drop me an email - I am in Madson.

All my best, Donna Birschbach - The Birschbach Team
0 votes Thank Flag Link Fri Dec 31, 2010
"..With a Condo, you own the walls and not the propoerty underneath it.. This is why there is a Homeowner's association fee..because they HOA owns the land and threfor is required to maintain it.."

Actually, the above statement isn't necessarily true.
The "common areas" are the responsibility of the homeonwer's association.
Your bylaws will specify exactly what you, as the owner, are responsbile for, and what the association will take care of.
This varies GREATLY from complex to complex.

You may very well be deeded land around your unit. In my complex, we are deeded 3 feet around the perimeter of our townhomes. I am responsible for the "foundation" plantings............yet the rules and regulations allow the association to be responsible for the front walk and steps, but limit what I can do with my 3 feet of land!

Someone else mentioned you don't have to worry about frozen pipes - not so, especially if you have a townhome - you are responsible for the interior, and if, for example, the power goes off in the winter, and your pipes freeze, it's your responsibility.
Also make sure you understand what the master insurance policy covers (that's the one the complex has), and see what you need to cover on your own homeowner's policy.

What is confusing to many people is that "condos" come in all shapes and sizes, and that "condo" is a term that defines the type of ownership NOT the style.

If buying a condo, make sure you read and understand the bylaws (rules and regulations).....and be prepared for the maintenace fee to increase over time.......also be prepared for occasional assessments when larger community repairs are undertaken. I had a $2000 roof assessment in my complex a few years ago so all new roofs could be intsalled. Some homeowners were shocked that they had to pay this, as they assumed paying their montly fee would always cover everything.
Not so!

The maor difference in buying a single family home compared to a condo type owenrship arrangement is that you are the "master of your own universe" in a single family, (fee simple) home.

Good luck!
0 votes Thank Flag Link Thu Dec 30, 2010
Matter of lifestyle. Do you prefer share space and common area(s) with other families? Condo have HOA fees and some single family homes communities also have HOA

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes Thank Flag Link Thu Dec 30, 2010
Betsy, great question. Again, no need to duplicate great answers and I'd like to add something about financing a condo and financing in general. Depending on the condo, many condos are FHA approved and some qualify to be financed under the Fannie Mae Homepath program, either of which might significantly affect your downpayment amount. Ask the listing agent about both and ensure your lender knows. Also ask your lender about downpayment programs from the county or municipality. Dane County has some and so does the City of Madison. Both require the borrower to make 80% or less of their area's gross median income, in general. Happy hunting!
0 votes Thank Flag Link Thu Dec 30, 2010
Hi Betsy,
Plenty of great answers and no need to duplicate them. However, I don't see much about the financing. Financing will be easier to come by if you are purchasing a single family home. Your downpayment will probably be less than if you are purchasing a condo. Most programs for financing condominiums require at least 10% down (where there is probably funding for single family home at 3.5% to 5%). Note - anytime you finance more than 80% of the mortgage - you will be paying PMI (Private Mortgage Insurance) as well. So work towards having a large downpayment.
0 votes Thank Flag Link Thu Dec 30, 2010
HGi Betsy..when you buy a house or a town house, the ownership is considered "fee Simple". This means you own the house and the parcel it sits on..With a Condo, you own the walls and not the propoerty underneath it.. This is why there is a Homeowner's association fee..because they HOA owns the land and threfor is required to maintain it..
Web Reference: http://www.asasplaces.com
0 votes Thank Flag Link Thu Dec 30, 2010
Hello Betsy,
If you purchase a single-family home then you are responsible for all the property's maintenance and upkeep and can remodel to your own taste level. A condominium is managed by a company who oversees the maintenance of the building. There are areas and amenities within the complex that are for all the residents use (such as parking garage, laundry, pool, gym, etc.) You may have a private balcony or patio but the outside areas are for everyone's enjoyment. It may require the management company's approval if you wish to remodel or renovate as there may be certain rules in place. Also, there are usually monthly fees due to the management company (called common charges or home owner fees) so that they have money available to pay the complexes expenses (ex:building insurance and grounds keeping) and for repairs.
I hope this is helpful.

Laura Feghali
Prudential Connecticut Realty
0 votes Thank Flag Link Thu Dec 30, 2010
I think it is all about lifestyle. In a condo you have the freedom to vacation for long periods of time without worrying about lawn maintenance, snow shoveling, frozen water pipes and so forth. You have the ability in 53703 to walk out your front door and do a ploethra of great things. Shop, eat, drink and take in the wonderful artistic scene.

A home may be the better choice if you desire having complete control over your environment. You need space from your neighbor, you enjoy a backyard or you don't get out much.

Like I said, it makes a big difference in how you live as to what you buy. Hope this helps.

Mark Gladue
608-239-5593
http://www.ForwardRealtyGroup.com
0 votes Thank Flag Link Thu Dec 30, 2010
To purchase a condo or a single family home is a matter of one's personal preferences--in the condo lifestyle, you have a Home Owner's Association's who establishes rules and handles common area maintenance fees--those fees take care of any amenities, gardening, any routine maintenace, etc., it's a community type of living; whereas in a single family house, you are in charge, you make your own rules, you handle your own maintenance, you have more privacy, etc.--it's really a choice of what lifestyle and suits you best...
0 votes Thank Flag Link Thu Dec 30, 2010
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