Question from Melissa Q.
“What is the difference between a Condominium
and a Townhome?
Danna’s answer
“This is a very commonly asked question and believe it or not,
there is a difference!”
Condo:
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Owner occupancy rate is vital to whether or not certain loans will be approved.
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Ownership is not only in the condo, but also in the “GCE” (Gross Common Elements)
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Example: Grounds, corridors, elevators (items which belong to all owners and consist of everything but the units in which people live.)
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Lender will get a “Condo Cert” from the HOA.
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The “health” of the HOA is a factor in the lending discussion, such as:
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amount of units in default
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general financial health
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No land is owned in a condo
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HOA fees are typically higher in a condo. These fees are usually due to the following items:
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building maintenance
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common areas
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recreational rooms
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parking garages
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pools
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Pools can drastically increase HOA fees due to on-going maintenance and additional insurance
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Town homes:
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Town homes typically have a lot and block legal description. (Example: L1, Blk2)
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Town homes are easier to get a loan on
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Occupancy rate is less important
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There are not people above or below you
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Town homes can include land ownership (Example: small yard)
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HOA dues are typically cheaper due to fewer common areas
Thank you Melissa for submitting your question to
“Dear Danna“!
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