What’s a townhouse, anyway?

First off, let’s get one thing straight: a townhouse is not just some glorified apartment. It’s a multi-story home that shares walls with your neighbors but has its own front door. Think of it like a cozy little slice of independence, but in a community setting where you might have perks like a pool or a gym. It’s like being in a relationship with your neighbors—close enough to borrow sugar but not too close that you have to hear their Netflix binges.

What makes townhouses different?

1. Ownership structure:
   • Townhouses are kind of the middle ground between single-family homes and condos. You own both the inside and outside of your unit (yard included!), but you’re still sharing walls with someone else. Single-family homes? Totally solo. Condos? You’re sharing everything with your fellow owners.
2. Maintenance responsibilities:
   • Here’s the kicker: you’re on the hook for some of the exterior stuff, like your yard and the roof. But if your townhouse is part of a Homeowners Association (HOA), they might handle things like lawn care and exterior maintenance. Just don’t expect them to clean your windows—unless you bribe them with cookies.
3. HOA involvement:
   • Spoiler alert: most townhouses come with an HOA, which means you’ll be paying monthly fees. These fees cover shared amenities and maintenance, but they can also dictate what you can and can’t do with your property. If you’re someone who loves to paint their front door neon pink, or even have control over parking certain types of vehicles,  you might want to double-check the HOA rules.
4. Size and layout:
   • Townhouses usually pack a punch when it comes to space. You’ll find everything from tiny one-bedrooms to larger multi-bedroom units. And because they often have multiple stories, you can get a good amount of living space without having to tackle the full maintenance

Step 1: assess your needs and budget

Before you jump in, it’s time to get real about what you want:

• Location: Are you looking to be close to work, family, or that hip coffee shop? Townhouses are everywhere—from bustling urban areas like Austin or DC to quiet suburbs like Salem or Des Moines.
• Budget: Get a grip on what you can afford, including mortgage payments, HOA fees, utilities, and property taxes. Sure, townhouses can be cheaper than single-family homes, but HOA fees sneakily make the price gap comparable in many instances.

Step 2: research townhouse communities

Not all townhouse communities are created equal, so do your homework:

• HOA rules and regulations: Seriously, read the fine print. Rules can cover everything from pet policies to exterior changes. If you want to keep a goat, you might be out of luck.
• Amenities: Check out community perks like pools, parks, or gyms. These can add to your lifestyle and future resale value.
• Resale value: Peek into property value trends in the area. Are homes going up? What’s the turnover like? This is your future, so don’t ignore it!

Step 3: understand financing options

Getting a mortgage for a townhouse isn’t much different than for a single-family home, but keep these in mind:

• Loan types: You’ve got options! Conventional loans, FHA loans, VA loans—take your pick. Just remember, some lenders might look a bit more closely at townhouses than single-family homes.
• HOA fees: Lenders will factor in your HOA fees when assessing how much you can borrow. Higher fees can mess with your debt-to-income ratio, so keep that in mind.
• Approval process: It’s not harder to get approved for a townhouse than a single-family home, but lenders will pay extra attention to the HOA’s financial health. If the HOA is in shambles, you might have a tough time getting a green light.

Step 4: find a knowledgeable real estate agent

You don’t want just any agent—you want one who knows their stuff:

• Look for an agent who knows the ins and outs of townhouse communities. A savvy agent can negotiate on your behalf, especially if the market is competitive. You want someone who’s got your back!

Step 5: schedule tours and inspect carefully

When you start touring townhouses, bring your Sherlock hat:

• Condition: Look for any red flags—water damage, cracks, or anything that makes you think, “Ugh, no thanks.” Check shared walls, roofs, and common areas.
• Layout: Does the flow work for you? Think about how you’ll actually use the space, not just how it looks.
• Noise levels: Pay attention to the sounds around you. If you can hear your neighbor’s reality TV at full blast, you might want to reconsider.

Step 6: conduct a thorough home inspection

Seriously, don’t skip this:

• Hire a pro: Get a solid inspection to reveal any hidden issues that could lead to headaches down the road.
• Focus on shared areas: Inspect not just your unit but also common areas and amenities. Look for signs of neglect or required repairs—those can affect your living experience.

Step 7: review the HOA documents

Before you sign anything, get familiar with those HOA docs:

• Financial health: Check the HOA’s financial health. High fees or lots of delinquencies could mean future headaches.
• Meeting minutes: These can give you the lowdown on community issues or any planned assessments.

Step 8: prepare for closing

Closing on a townhouse is pretty similar to a single-family home, but there are a few things to keep in mind:

• Understand costs: Beyond typical closing costs, remember to include any HOA fees or special assessments due at closing.
• Get ready for the responsibilities of a homeowner: Even with an HOA, you’re responsible for your property’s upkeep and following community rules.

If you’re ready to start your journey to homeownership, get pre approved with Tomo Mortgage today.