HOME - HomesMSP.com

Twin Cities Market

THE THINGTHE THING - current interactive housing market analytics

Local Market UpdatesMonthly housing  market updates for 350+ Twin Cities communities

Foreclosures & Short SalesQuarterly Foreclosures & Short Sales Report

Twin Cities Real Estate Annual ReportAnnual Twin Cities Residential Real Estate Report

Public Property Records - Sheriff's SalesPublic property records - Sheriff’s Sales

 

How do I get my home ready to sell?

> Posts on selling your home and how to get ready

> Request free seller consultation and market analysis

> City inspections

> Free home seller guide

> Downsizing

Do I need a Realtor to buy a home?

> No, but find out why the number of Minnesota buyers who used a Realtor grew from 69% in 2001 to 95% in 2012!

> Posts on buying a home

> Request free buyer consultation and home tour

> Free home buyer guide


Search over 200 pages of real estate information at HomesMSP.com

Google

WWW
HomesMSP.com

 

 


Mpls St. Paul Super Real Estate AgentMpls St Paul Magazine Super Real Estate Agent 5 years in a row for customer satisfaction


A portion of every transaction donated to HABITAT FOR HUMANITY

Habitat for Humanity


Facebook

Twitter


My CleanLiving - NORWEX

improving quality of life and the health of the planet by radically reducing the use of chemicals in cleaning and personal care

 

 

 

Condo vs Townhome vs House

Also see related BLOG POSTS for more information

condo-th-house3

What is the difference in owning a condo or townhome compared to owning a house? The purchase price may be lower for a condo or townhome, but there are also association fees and restrictions. In reality, they are just different ways of assuming the responsibilities of homeownership. It can, however, have a bearing on the mortgage amount for which you qualify and some of the ways in which you live.

Association fees

When you buy a townhome or condominium you become part of a Common Interest Community (CIC) in a Planned Unit Development (PUD), which shares some of the responsibilities and costs of homeownership. Those shared costs are usually paid by each unit owner in monthly association fees.

Typically townhouse association fees include the following:

  • Snow and lawn care
  • Outside maintenance
  • Sanitation (trash removal)
  • Water/sewer (some include it, some don’t)
  • Hazard insurance covering the building structure and exterior (you should secure your own separate insurance for the interior, much like renter’s insurance)

Condominium association fees usually include the above, plus some or all of the following...usually, the higher the fee the more is included:

  • Heating
  • Security system
  • Shared amenities, such as a pool and exercise equipment
  • Cable
  • Air conditioning
  • Electric

Association management

Associations are most often managed by a professional management company. However, some associations are self-managed by elected members of the community. Following are some questions you might ask about the association.

  • Are there any pet restrictions?
  • Do they have enough cash reserves to cover maintenance, etc?
  • How do they pay for major improvements - from reserves from monthly fees or from special assessments?
  • Are there any plans for any major improvements? What and when was the last major project, and how was it funded?
  • Do they allow rentals?  If so, are there any restrictions and what percentage is currently rented?
  • How is soundproofing between units?

If you decide to purchase a home in a Common Interest Community in Minnesota, you will have ten days to review the association documents to your satisfaction before your purchase agreement becomes binding.

Qualifying for your mortgage

When you are approved for a mortgage, you will be approved for a maximum monthly payment. If you are buying a house your maximum monthly payment typically includes homeowner’s insurance, but does not include the cost of utilities and maintenance. When you buy a townhouse or condo, your maximum monthly payment includes your association fee... which covers some, if not all, of your utility and maintenance costs.

This means the same approximate qualifying monthly payment will buy you a condo, townhome or house at different prices ranges...see the example below. Monthly payments were calculated with 3% down at 5.5% interest for 30 years. Association fees in the examples include all the items listed above for the condo and typical townhome inclusions listed above.

NOTE: Interest rates and prices go up and down, but the same principles apply regardless of interest rates and prices

 

CONDO

TOWNHOME

HOUSE

Features

1BR/1BA/1GAR

2BR/2BA/1GAR

3BR/2BA/2GAR

Square Feet

740

1,255

1,166 + basement

Purchase Price

$157,000

$184,900

$202,900

Mortgage

$865

$1,018

$1,117

Taxes

$1,111

$1,577

$1,634

Hazard Insurance

In Association Fee

In Association Fee

$68

Association Fee

$361

$164

$0

TOTAL QUALIFYING MONTHLY PAYMENTS

$1,318

$1,314

$1,321

Total monthly home budget

Keep in mind that although your qualifying monthly payments are about the same, in this example the condo association payments include everything except telephone.  For the townhome example you must pay for your own gas, electric and cable.  When you own a house you are responsible for all utilities and maintenance. Following is a comparison of total estimated monthly costs.

 

CONDO

TOWNHOME

HOUSE

Features

1BR/1BA/1GAR

2BR/2BA/1GAR

3BR/2BA/2GAR

Square Feet

740

1,255

1,166 + basement

Purchase Price

$157,000

$184,900

$202,900

TOTAL QUALIFYING MONTHLY PAYMENTS

$1,318

$1,314

$1,321

Gas

In Association Fee

$48

$129

Electric

In Association Fee

$30

$45

Water/sewer/trash

In Association Fee

In Association Fee

$67

Cable

In Association Fee

Optional

Optional

Maintenance

In Association Fee

Varies

Varies

TOTAL MONTHLY HOME BUDGET

$1,318

$1,392

$1,562

The right fit

All three forms of ownership are good options...it’s a matter of finding the best fit for you. A house gives you more independence, but also greater responsibility. A condo or townhome has the security of more regular expenses and freedom from snow and lawn care, as well as outside maintenance.

CONDOMINIUM

  • Most often one level in a multi-level building, shared entry and hallways, may have elevator
  • Usually with security system, sometimes with onsite security guard and/or caretaker
  • May have heated underground parking, parking in detached garages, assigned or unassigned open parking stalls or on-street parking only
  • Most have party room, may also have shared amenities such as pool, exercise room, tennis courts
  • Most association fees include heat, water/sewer, trash removal, snow/lawn care, outside maintenance and hazard insurance
  • Some also include electric and/or cable
  • Laundry more often shared, but may also be in unit
  • Usually central heating plant

TOWNHOME

  • Often multi-level, sometimes with basement
  • Enter directly into unit from outside, own from the ground to the sky
  • Usually have some sort of outside patio and/or deck area
  • Garage usually attached
  • Complexes can be large or small
  • At least one side wall usually shared, back wall may be shared or open to the outside
  • Most association fees include snow/lawn care, trash removal, outside maintenance and hazard insurance, some include water/sewer
  • Usually responsible for own furnace, air conditioner and water heater

Also see blog posts...

[HOME] [BUYING A HOME] [Free Buyers Guide] [Free Buyer Consultation] [Common Buyer Questions] [Twin Cities Homes for Sale] [First-Time Homebuyers] [Reasons to Own] [Stop Paying Rent] [How Much Cash Do I Need] [Taking out the Trauma] [Homebuying Process] [Townhome-Condo-House] [Financing] [Mortgage Checklist] [Buyer Agency] [Arbitration] [Why Use a Realtor] [Lifestyle Search] [SELLING A HOME] [COMMUNITY PROFILES] [MINNESOTA SCHOOLS] [FEATURED LISTINGS] [TOWNHOMES-CONDOS] [BABY BOOMERS] [RELOCATION] [MOVING / MISC RESOURCES] [ABOUT US / CONTACT US]

©2013 SHARLENE HENSRUD, Realtor - 763.541.6066 - shensrud@homesmsp.com

RE/MAX Results - Minneapolis/St. Paul, Minnesota - 800.875.6001

Awarded Super Real Estate Agent by Mpls/St Paul Magazine for outstanding customer satisfaction

A portion of every transaction donated to HABITAT FOR HUMANITY

HomesMSP.com provides real estate information for Baby Boomers, first-time homebuyers, relocation buyers, and move-up buyers in the Twin Cities metropolitan area of Minneapolis and St. Paul, Minnesota. We also offer resources and services for Baby Boomers moving to Minneapolis - St. Paul Twin Cities Minnesota and people age 55+ in third age transitions and retirement housing transitions, guiding home buyers and sellers through the process of selling and buying a house, townhouse, townhome, condo or coop at any stage in life. Sign up for a free weekly newsletter, get free Twin Cities relocation guides and free homebuyer handbooks. Whether you spell it ‘Realtor’, ‘Relator’, ‘Realator’, ‘Realitor’, ‘Realter’ ‘Realty’, ‘Reality’ or ‘Real Estate’, we’re here to answer your questions and help guide you through the process of buying or selling a home or relocating to the Twin Cities of Minneapolis and St. Paul, MN.