Tips For Buying A Townhouse | What Are The Pros & Cons?

If you want to buy a townhouse, you’re not the only one.

According to the National Association of Realtors, detached single-family homes were the most popular type of home in the U.S. in 2022, and townhouses were the second most popular.

Even though the process of buying a townhouse is similar to buying a single-family home or a condo, there are some differences that you should be aware of when shopping.

Here is a guide to buying this type of home, whether it’s your first time, you’re looking for a second home, or you want to move into a smaller home.

What’s A Townhouse? 

Townhouses, also called “townhomes,” are a mix of detached single-family homes and condos.

They offer the best of both worlds. Townhouses can be very different in size and shape, but in general, they are multi-story homes that share a wall with another home or two. Some have their own patios or small yards.

For a townhouse to be considered a single-family home by the U.S. Census Bureau, it must have a wall that goes from the ground to the roof and have its own utilities and heating/cooling systems from those of its neighbors.

Townhouses and condos are a lot alike, but they are not the same thing. The level of ownership is one of the main differences.

Unlike condo owners, townhome owners usually own both the inside and outside of the home, including the yard (if there is one). Like condo owners, people who live in townhomes may pay HOA fees for things like maintaining common areas and taking out the trash.

The Pros & Cons Of Townhouses

Like any other type of home, townhouses have both good and bad things about them.

Pros

• Greater ownership: In a townhouse, as opposed to a condo, you usually own both the outside and the inside of the home. Even though a HOA may have rules about how the outside should look, you usually have more freedom to make changes than you would in a condo.
• Affordability: Single-family homes of the same size in the same area usually cost more than townhomes of the same size.
• Shared amenities: Like condos, townhouses are usually part of a community with shared amenities like walking paths, pools, clubhouses, and more.
• Little maintenance: Most townhomes are easier to take care of than single-family homes because they are smaller and sit on smaller lots.

Cons

• HOA rules and fees: Townhomes often have monthly HOA fees that pay for things like sidewalk and lawn care and maintenance on the outside and grounds. An HOA also has rules and regulations that may limit how you can use your property and how it can be changed.
• Less space: A townhouse is usually much smaller and narrower than a house that stands on its own. They also have more than one story, which can be hard for people who have trouble moving around.
• Lack of privacy: Because townhomes are usually made up of several connected units, they may not give you as much privacy as a single-family detached home. Look at the condition of the properties next to a townhouse.

Advice On Buying A Townhouse

Seek Out An Experienced Real Estate Agent

When you buy a home, a real estate agent can be your guide and speak up for you.

Your agent can tell you what the average price of townhomes is in your area. They can also tell you about the local market, negotiate on your behalf, and fill out all the forms and disclosures you need to buy a home.

Agents get paid a commission for their work, so ask them about it right away so you know what to expect.

Most of the time, though, it is the seller, not the buyer, who pays the real estate commission.

Be Sure To Get Pre-approved For Financing

You should always get preapproved for a mortgage before looking for a home.

Being preapproved gives you a lot of benefits. It helps you figure out what you can afford and gives you an advantage over other buyers.

Also, it can help you figure out if the HOA fees for a townhome are too high. When applying for a loan, HOA fees are added to the purchase price. So, if you want to buy at the top of your price range, a high HOA fee could keep you from getting a loan.

Search For The Best Mortgage Rates

It’s important to get mortgage rates from at least three different lenders and compare them.

A low interest rate can save you a lot of money over the life of a loan. Keep in mind that people with the best credit and the least amount of debt compared to their income get the best rates.

Research HOA Fees And What They Cover

Look closely at the homeowner’s association (if there is one), the fees it charges, and what it covers before deciding on a townhouse.

You should think about the monthly fees when making your purchase. Before buying, you should read all of the HOA documents, including the rules and regulations, current financial statements, and HOA documents.

Prepare For Bidding Wars In Hot Markets

Townhouses are more affordable than traditional single-family homes, which is why first-time homebuyers are turning to them more and more.

There is a lot of competition for starter homes on the market right now, so you might find yourself in a bidding war. If this happens, the best thing to do is decide right away how much you are willing to pay and stick to that number.

Yes, you may have been outbid, but keep in mind that condo and townhouse prices tend to drop faster and more than single-family home prices during a real estate downturn.

Order The Home Inspection

Home inspections are important for both single-family detached homes and townhomes.

Make sure the inspection covers both the inside and outside, even if the HOA takes care of the outside. And if there are any problems on the outside, make sure they are taken care of and fixed before the sale goes through.

Most of the time, the HOA can fix any outside problems. If not, the repairs will be up to the seller.

Bottom Line

Due to their lower prices than single-family homes, townhouses can be a great choice for first-time homebuyers.

They can also be a good choice for people who want a low-maintenance lifestyle and a home they can just lock and leave. But even though townhouses are cheaper than single-family homes, they are smaller and give you less privacy.

Overall, buying a townhouse is a good idea if you don’t want to deal with the outside maintenance that comes with owning a home but still want the equity and wealth building that comes with it.

Read more: See real estate promotions here.

READ MORE: SEE THE BEST BANK BONUSES HERE AND THE BEST INVESTING BONUSES HERE.