Choosing Your Home Type

Home, sweet home — it’s a lovely image, isn’t it? Parents relaxing after a hard day’s work. Kids doing homework or playing in the yard. Maybe a cat in the windowsill, a dog in the yard. Isn’t that what it’s all about?

Well, it’s not that simple.

The fact is, there is no single ideal home because there isn’t just one type of homebuyer. Some of us are single, some have spouses but no kids, and some would gladly forgo the yard (and the attendant yard work) for a balcony with hanging plants and a panoramic view. Home ownership, like love itself, is a many-splendored thing.

Condos, Co-ops and Townhomes, Oh My

There are, of course, thousands of types of homes, but the vast majority fit into one of several broad categories. Depending on your particular situation, it may be best to focus on one of the following:

Single-family detached. It can be anything from a 100-year-old handyman’s special to a designer home in the poshest planned community in town. Yet whether it’s a starter home or a starter castle, it is, by definition, a single house on its own parcel of land.

As the owner of a single-family detached home, you get to make all decisions (within reason) regarding exterior style, yard improvements, and household rules (parking, pets, late-night noise, etc.). The flip side, of course, is that you also get to pay for all repairs and routine maintenance.

Condominium. Condos, too, take many shapes and forms (attached townhouses, warehouse lofts, high-rise apartments, etc.), but all adhere to two basic principles: 1) Each owner owns the interior of their unit — "from the paint in,” as they say — and a portion of everything else from the roof and exterior walls to any communal facilities. And 2) All owners pay dues to fund a homeowner’s association that handles maintenance, common-area repairs, insurance, and unpleasant surprises.

For some buyers — singletons, for example, and couples without kids — a condo can be an excellent choice. They tend to be more affordable (lower construction costs, shared expenses), require less maintenance (someone else cleans the gutters and mows the lawn), and often have amenities (a pool or fitness center, perhaps) that few of us could afford on our own. The downside? More noise, less privacy, and possibly less appreciation when you’re ready to sell.

Co-op. It’s short for co-operative apartment, and although they’re not common (except in high-cost, high-density areas like New York City), they are an option. They typically resemble condominiums, but instead of owning their own unit, co-op owners become shareholders in the corporation that owns the entire property. The corporation (through a board of directors) assesses monthly dues, manages the property, and pays the mortgage and other bills.

More to the point, perhaps, shareholders get to vote on all major decisions, including who gets to live in the co-op. In other words, your fellow owners can turn down prospective buyers based on everything from financial concerns to perceived reputation (although, by law, they can’t discriminate). In other words, getting out (i.e., selling) can be just as difficult as getting in.

A Word About Townhouses

The term "townhouse” or "townhome” isn’t a legal one, but rather a decorative one. Simply put, it refers to homes that are individually owned (along with the land beneath them), but that also share common walls with one or more neighboring homes. From inner-city row houses (think Rocky) to downtown duplexes to golf-course villas, they occupy a sort of middle ground between condominiums and single-family detached homes.

Are they a good idea? It depends on your tastes and interests. Like detached homes, most provide a yard (although usually quite small); like condos, they often provide communal amenities (e.g., a swimming pool, tennis courts), but with the same noise, privacy, and stylistic issues. And, assuming you’ll sell someday, be aware that, all things being equal, townhouses generally appreciate more than condos, but less than detached homes. However, they are usually cheaper than a detached home.

Related links: Home Types Defined; Buying Old Homes vs. New Construction; Buyers' Real Estate Wish List