Homebuying First Step: Define What You Mean by 'Home'
Selecting the right home to fit your current and future needs can be challenging. One of the first decisions you'll make is how you define "home." There are many options including a single family residence, duplex, multiplex, condominium, modular or mobile homes.
Two of the most common choices are single family homes and condominiums. While this choice is based on personal preference, you should weigh the pros and cons of each first.
A single family residence is what you may expect -- a home suited for one family (not a duplex or multiplex) and all land within the lot.
A condominium is structured differently. Condominiums are multi-unit properties and often resemble an apartment complex. Each unit owner owns their unit and an interest in common areas that are shared with other unit owners. Common areas include swimming pools, roofs, elevators, walkways and any other areas shared by two or more people.
Proximity to Others
Condominiums are structured so that there are multiple units within one building. Oftentimes the only thing separating you from your neighbors is a single wall. Single family homes provide additional space between separating you and your neighbors with a yard.
Pros: If you are a social butterfly, enjoy meeting new people and want to build strong relationships with your neighbors, a condominium can provide you close proximity to multiple neighbors.
Cons: Depending on whom your neighbors are and what do they do, close proximity could cause problems. Does the guy next door play his drums at 2 a.m.? You'll want quiet neighbors when the only space between the two of you is a wall.
Single family homes provide additional distance between you and your neighbors. The space between can vary greatly from several feet to several acres.
Pros: Worry less about your neighbor's daily habits interrupting your quiet time. You can also feel more confident that your neighbors can't hear your every move.
Cons: It may be more difficult to develop relationships with neighbors when they are miles away. These relationships can come in handy when you need to borrow an egg, lawnmower or you need someone to watch the kids for a few minutes.
Association Rules and Fees
Condominiums and some single family homes participate in homeowner associations. Most commonly single family homes don't belong to a homeowners association (although this can vary depending on the area). The power to manage an association is placed with the board of directors, elected by unit owners. All owners within the association are members and pay the yearly association fees. The fees collected are used to maintain, repair and replace common areas.
The Pros of Belonging to an Association
• Common areas are maintained by the association. In condominiums, all property outside of the individual unit is maintained by the association. In single family homes all property shared by the members of the association is maintained.
• There is a governing body to assist in resolving neighborly conflicts and to remind members of the rules and regulations.
The Cons of Belonging to an Association
• Some associations have long lists of rules and guidelines that cover everything from what color you can paint your home to what type of fence you can purchase and install.
• You have to pay association fees on a monthly or yearly basis. These fees can vary greatly by location so be sure to ask about them.
• Associations can levy additional fees for unexpected repairs or maintenance issues.
There are several things you should consider regarding the value of the property and many will be dependent on your specific area and the home itself.
The first question you should ask is whether the home will go up -- or down -- in appraised value over time. Purchasing a home in a sought-after location may help ensure your home will gain value over time. But you should be cautious here. If you are one of the first buyers you could run the risk of the area fading out before it fills up.
The condominium market has been doing very well the past few years. Condominiums are increasing in value over time at a faster rate than single-family homes, according to a recent Case-Shiller Index. But when looking at the longer term, it's uncertain if this gap will continue as it's a fairly recent development. Talk with your agent and discuss their predictions for your market.
In the end, only you will know best which type of property is suited to meet your needs. Know what you are dealing with before taking the homebuying plunge, and you can move forward with confidence.
More about homebuying from Credit.com:
Why You Should Check Your Credit Before Buying a Home
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