When buyers see your townhouse for sale, they might not be aware of everything they’re buying into. For starters, townhouse owners typically enjoy the benefit of having more freedom over making changes to their domain than, say, condo owners or apartment renters. Townhome communities can also win out in terms of the common facilities—like a shared pool or gym—that they offer. So it makes sense that townhouses have recently become the latest “it” property.
Therefore, if you’re planning on selling your townhouse, you should be privy to the best ways to market it, the timeline you might have to follow, and what needs to happen after you accept an offer.
Owning a townhouse makes for a wonderfully well-balanced life, offering all the amenities of a great condominium, often with more space and independence. You likely have your little patch of front or backyard without a wide-open field to maintain, taking some of those weekend chores off your plate.
But sharing walls with your neighbours and paying homeowners association fees isn’t for everyone (in fact, it may be why you’re moving!) For that reason, when you set out to sell your townhome, recognize that you may face a niche buyer pool. The majority of buyers across generations would prefer to purchase a single-family dwelling, according to Eyes on Housing.
That’s not to say your townhouse won’t sell. Townhouses are ideal for buyers who are looking to downsize, get a bargain in a hot market, or lower their home maintenance burden so that yours will have lots of appeals. You need a game plan to sell your townhouse fast — and that we’ve got (so keep reading!)
What Exactly Is a Townhouse?
A townhouse typically has a unique front, and back entrance is multiple stories and has one or two communal walls. Common in urban areas, townhomes vary widely by city and region. Whole blocks of row houses (another term for townhomes) are common in densely populated east coast cities, as well as in San Francisco. But townhouses can also be free-standing.
The exact definition of a townhouse is murky. Some townhomes have homeowners associations (HOAs) much like a condo. An HOA will likely cover some of the maintenance costs for grounds and other shared areas, but in exchange, you give up some of your control. Even if your townhouse only has one shared wall, you will still have to share some control and cost with the owner next door. Finding the right duplex build is an important decision. Check out our range of the best home design constructions at MJS Construction Group.
Many homeowners who wish to live near urban centres choose townhomes as a balance of affordability and privacy. A typical single-family home is larger and comes with a yard. In large cities, these can be rare and expensive. Urban condominiums are another popular option. Condos are similar to townhouses, but they have some key differences.
Townhouses vs. Condos
Condos and townhouses share a few common qualities. With both, you have some ownership over the property, but you’re not responsible for every single aspect of the residence, like trash collection, for instance.
The most notable difference between a townhouse and a condo is that the owner of a condo only owns the interior of her unit. The Homeowners Association (HOA) that owns the complex owns the exterior unit, the front and back lawns if they exist and the communal areas. With a townhouse, you own the interior and the exterior as well as any lawn. Because of this, home insurance rates are typically lower for condo owners, since they own less.
In terms of appearance, townhouses are a bit less flexible. Townhouses are almost always built-in rows, and each unit is multiple stories tall. Condos, on the other hand, vary widely in style and layout. They can be ranch-style, cottages or even in a luxury apartment building.
HOA fees and maintenance fees are typically higher for condos than townhouses. This is because condo owners often have access to more services and amenities like lawn care, pest control and community spaces like a pool or golf course. This isn’t to say that townhouse owners never have access to these things, but it’s less frequent, and therefore they frequently pay less in fees.
Disadvantages of a Townhouse
As opposed to the freedom and flexibility that come with owning a single-family home, your creative opportunities are normally limited to townhouses. They are generally part of planned living developments and covered by homeowners association rules. This may limit your ability to paint your home a different colour, add sheds or other items to the property or park a boat in your driveway. If you want to run your home as you see fit, a single-family dwelling makes more sense.
Townhouses offer less privacy than single-family homes. You have little to no private yard space, and your walls are shared with neighbours. If they are loud or have small children constantly running about in front of your house, you won’t get much peace and quiet. Lying out to sunbathe, throwing private parties on the back deck and playing catch in the yard with your kids are often difficult or impractical, depending on the setting of your home.
While you do usually own land when buying a townhouse, the lot sizes are limited. Since each unit is adjacent to the one next to it on both sides, the yard space is in the front and back and limited to the width of your unit. This does minimize your mowing responsibilities, but it also means you don’t get the benefits that come with having lots of yard space, such as space for kids to play and opportunities to add landscaping.
Your living space in a townhouse is usually more vertical than horizontal. Two- to three-story townhouses are common. This means you may have to walk up one to two flights of stairs to get to upstairs bedrooms or living areas. If you have health issues or struggle to go up and downstairs, this presents some challenges. Some developments do have elevators for multi-story properties, especially when they cater to an older population.
Resale values on townhouses sometimes lag values of single-family homes in certain markets. This is especially true in communities that have seen an influx in the availability of condos and townhouses in the early 21st century. Some builders replicate successful developments near the same areas — in effect creating your same home, but newer. Fewer buyers are typically available for townhouses as well, due to more difficulty in securing financing. Some banks require minimum occupancy levels in community living set-ups like townhouses to protect their investments.
Pros of a Townhouse
One of the main draws of a townhouse is that they’re usually more affordable than traditional homes. While much of this is because townhouses tend to be smaller and usually lack yards, the tradeoff is that you can buy a townhouse with plenty of space right by a number of amenities, which is quite the selling point for many people (we’ll elaborate on location in a minute). At MJS Construction Group, we have the best dual occupancy selection to make your house a dream come true.
There are also maintenance and upkeep costs to think about. Again, we’ll go into more detail shortly, but to put it simply, less can go wrong with a townhouse, so you don’t need the same amount of money set aside to help pay for what your insurance company won’t.
Your townhouse’s HOAs will help with maintenance, too.
Conversely, many people who own a traditional home would tell you that they’d gladly pay that if it meant they didn’t have to spend their weekends on chores to maintain their homes.
Location, Location, Location
Another enviable perk about buying a townhouse is that you can enjoy all the benefits of homeownership and live in or near a big city. This could mean a shorter commute to work or even living closer to your child’s school.
Purchasing a traditional house usually means accepting the fact that living out in a suburb comes with long drives regularly. Decide to buy a townhouse, and you should have no problem finding one near your favourite amenities.
Potential Rental Income
That being said, many townhouse owners get around the appreciation problem by simply turning their townhouses into rental properties once they’re ready to move into a traditional property.
It’s not for everyone. Many owners are fine with selling if it means making their next mortgage more manageable.
However, it’s still nice to have the option. There’s no reason to think townhouses will ever go out of style, especially in urban areas where their modest footprint is so desirable. So, by the time you’re ready to move, renting out your townhouse could be a no-brainer for a second source of income.
Unless you are paying cash to buy a townhouse, you will need to obtain mortgage financing. One of the limitations of these types of properties comes from the difficulty lenders find in accurately classifying and appraising townhomes. Mortgage financing is more expensive and restrictive for condos. Some lenders choose to underwrite all townhomes as if they were condos, leading to higher costs. Some have more nuanced guidelines. If you are buying in an area with a lot of townhomes, it’s a good idea to find a lender with experience in the area. Maybe even speak to the other owners to find out who they used for financing.
When lenders underwrite condominiums, they place restrictions on the number of units that can be rented, rather than occupied by the owner. They may underwrite a townhouse complex the same way. So before buying, it would be good to find out how many units are being rented. Homeowners’ associations often try to restrict the number of units that can be rented as well, so if that is in your long-term plans, find out if it will be allowed.
Ways To Market A Townhouse For Sale
In some ways, selling a townhouse can be easier than selling a single-family home, because the similar homes in your community can make it easier to determine the fair market value. This can give buyers the assurance that they’re not overpaying.
Additionally, buyers will be looking at both the home itself and the community full of perks and shared amenities. You and your real estate agent should include any walking trails, parks, playgrounds, fitness centres, swimming pools, and assigned and guest parking in the listing.
Different townhouse communities have different rules about maintenance; some homeowners associations are more hands-off while others will make you paint your house whether or not you like it. It’s important to give potential buyers the complete picture, including HOA fees and regulations they’re accountable to if they decide to own in the community.
But you can spin those fees as a positive: “Make it clear that the fees will save them money on services like snow removal or trash removal that they might otherwise be responsible for in a single-family home,” says Michele Lerner, a real estate expert and author. “You can offer to cover the homeowner association fees for a year in order to make the first year of homeownership easier on the buyer.”
Make sure you’re HOA-compliant
Depending on how active your HOA is, there might be rules in place about where you can put your “For Sale” sign and how you can market the property. Make sure to check your community’s bylaws at the beginning of the sale process to determine what you can and can’t do.
Once you find a buyer, you’ll usually have to provide paperwork to your HOA and have your buyer agree to HOA rules in writing by a certain deadline.
The purchase offer is typically contingent on the buyers’ acceptance of the rules and regulations by a particular deadline. “If they don’t receive the documents on time, the buyers could use this as an excuse to revoke their offer.”
If you work with a real estate agent who knows the process, it will be even easier, so make sure to find someone to help you who knows the drill. A good place to start looking for an agent familiar with townhouse sales is right in your backyard! Agents who have sold homes in your community will already be familiar with the details and regulations of your specific HOA.
Questions to Ask When Buying a Townhome
What’s the HOA Like?
Homeowners associations (HOAs) can change the tempo of a neighbourhood. If a townhome community has communal areas, say a park, parking lot or recreation centre, those are probably regulated and controlled by the HOA. Front and back lawns, on the other hand, are typically your prerogative and responsibility. Rooftop maintenance may also be your concern. Under the wrong circumstances, they can be serious overhead. Find out before you buy whether that’s the case.
And while you might want to paint your townhouse in DayGlo shades, chances are about 120 per cent that you’d have a homeowners association rep knocking on your door and telling you to tone it down, pronto, if you did. On the other hand, an HOA will also stop your neighbour from stealing your idea to go neon before you get the chance to.
What’s Privacy Like?
In a townhouse, you’ll typically only have neighbours on either side, as opposed to on all sides if you live in a condo. But that doesn’t mean you want an amateur heavy metal band practising in a room adjacent to your own at 2 a.m. – especially if they’re terrible. So you’ll want to explore how easily noise travels through the set of townhomes you’re considering cuddling up into. The so-called party wall doesn’t mean you’re interested in joining the party, after all.
You can do a little PI. Work – and potential future-neighbour-friendship-building – by asking others in the row how well their townhomes are soundproofed and what the tone of the neighbourhood is. Do they hear others’ TVs better than they hear their own? Are transportation sounds an issue? Or is noise pollution at a minimum? If you fall into a sleeping state that others would equate to being a plank of wood, you’re good; if you’re a super light sleeper and your community is a loud one, you’ll regret this decision the first day you show up to work. People think the zombie apocalypse has begun.
How’s the Natural Ambiance?
Even small touches of nature can enhance an urban townhome, and those can come in a couple of forms. End units often have a little more outdoor space, like extra elbow room in the yard or an added porch or patio. But if a townhome you’re considering is sandwiched between two others instead of being the slice of bread on either end, then having a little outdoor haven is a great plus. Your yard will, however, probably have to be sparingly luxurious given that townhouses don’t tend to have much real estate beyond the building’s footprint.
Look for a nice solid fence out back – make sure it’s good and sturdy. Ask about any encroaching hedges and overhanging trees: Whose responsibility are they? A nicely landscaped setting is a plus unless gardening is one of your primary hobbies, in which case an unfinished yard can provide you with plenty of pleasant afternoons over the next couple of years while you beautify it.
What’s the Insurance Situation?
In some sets of townhouses, the HOA takes care of a portion of the insurance. In others, you’re on your own. So it’s important to ask what the policies are and what you’ll need to do to ensure your stuff should the worst happen. Whether they’re covering it or you are, you want to make sure your belongings and your dwelling are protected should something awful occur.
Look into what types of disastrous situations are covered. Is flood damage on the list? How about harm from earthquakes? If the tectonics or the water table in your area is a bit fussy, you’ll want to be protected, and those sorts of policies are often above and beyond the standard coverage. It’s worth consulting your insurance agency to find out the specifics on your policy and beefing it up if you need to.
What’s in the CC&R?
Covenants, conditions and restrictions (commonly referred to as CC&Rs) are rules that come along with living in certain communities. If you’re looking at a townhome, there’s almost certainly one for the property. It’s not just the parts of the home that your neighbours can see – a CC&R can specify who can live in your home, whether you have pets, what you’re obligated to do if there’s a pest infestation, whether you can hang a clothesline outside, and other aspects of your day-to-day life. Finding the right Melbourne home builders is an important decision. Check out our range of the best home design constructions atMJS Construction Group.
While they can limit what you can do with your property, CC&Rs usually have benefits as well. Because of them, condominium complexes and rows of townhouses often look nicer, are safer and maintain higher property values. They can also prevent common neighbourhood annoyances. The CC&R can keep your neighbours from blocking your parking space with a dumpster during a months-long construction project, digging a pool that infringes on your patch of the yard or adopting an army of noisy puppies (and then leaving their messes in the landscaping). In other words, pretty much nothing is off the table; it simply depends on the local standards. Read the CC&R documents through before you sign on the dotted line.
Prepare Before You Buy
Despite the complications and potential costs of financing, townhouses may offer the most attractive home buying option in many urban areas. The multi-level layout and private entry give the feel of a single-family home without the expenses that come from owning and maintaining acreage yourself. Despite the shared wall, a townhouse can feel more private than a condo, yet the homeowner’s association gives much of the same convenience and protection.
If you are in the market to buy a townhouse, talk to your realtor and mortgage professional to make sure you know all the details and obligations of the property in question. Before buying, it’s also smart to consult a financial advisor about how this could impact your budget and whether it’s an investment that aligns with your short-term and long-term goals.