While a townhome is an architectural style (also known as a townhouse or rowhouse), it is also the middle ground between a condo and a single-family home. Townhomes share walls, but not ceilings or floors, and often come with small yards in the front and back. Unlike condo owners, townhome owners do own the land they are built upon. And with that ownership comes some responsibility for yard and exterior maintenance.
Still, townhouses cost less than single-family homes and have lower HOA fees than condos, making it a perfect alternative for prospective homebuyers. Shopping for a townhome is a little different from shopping for a condo or single family home, and shopping for a new townhome requires some further considerations, all of which we’ve outline for you below!
Understanding the HOA and CC&R
Not all townhome communities have a homeowners association (HOA), but many do in order to maintain shared areas like parking lots and pools. Even if you’re someone who chafes at having to follow a lot of rules, keep in mind that your neighbors have to follow those same rules — which can make a huge difference when living in close proximity.
HOA fees are generally lower for townhomes than for condos, but that’s also because fewer services are offered. When buying a townhome, you will likely be responsible for the maintenance of your yard and property. Read carefully through the HOA’s Covenants, Conditions & Restrictions (CC&R) to see what is required of you and what the HOA covers. For example, some HOAs include rooftop maintenance and some do not. According to Craig Reger, a real estate broker in Portland, Oregon, it’s important to know in advance what you can and cannot do. “I’ve seen HOAs that don’t allow storage sheds in the backyard, solar panels, or private fences.” Know before you buy.
Learn about the builder’s reputation
When shopping for a new townhome, there is no established track record for that particular property. However, a builder does have a track record — and you should do your due diligence to find out what it is.
When researching a builder, you’ll want to find out two kinds of information: first, are they financially sound, and second, does their work hold up over time? Sharon Hanby-Robie, a real estate agent and interior designer in Lancaster, Pennsylvania, suggests that potential townhome buyers, “Go to the courthouse to see if a lien’s been filed against the builder, then go to the construction site. Talk to subcontractors to see if they’re being paid.”
Check with the Better Business Bureau, ask local real estate agents about the builder, and visit their previously constructed townhomes to ask the occupants if the home has stood up to time, use, and weather. We also recommend checking out TrustBuilder, NewHomeSource.com’s rating and review database of new homebuilders to learn more.
What are standard features & what are design upgrades?
Something that sets a new construction apart from an old one is that new townhome buyers have a say in how the home will look and function. When meeting with a builder, find out what comes standard, what upgrades are available, and how much those upgrades will cost. Remember that the model has all the bells and whistles, so what you’re seeing in the model may not be what you get in your own new townhome. Ask for a printed feature sheet, and be sure to ask if anything isn’t clear.
Upgrades generally come with a huge price tag, so do some research to find out if you can hire someone later on to do those upgrades for less. On the other hand, having the builder do the upgrades means those costs are part of the loan and not something you’ll need to finance separately.
Read up on financing options, insurance & builder warranties
Builders don’t generally like negotiating sales prices because the next buyer will want the same low price. However, many are willing to offer attractive incentives to buyers in order to make a quick sale. If the townhomes are already selling like hotcakes, they may still offer incentives to buyers who use their preferred lender and title company.
When purchasing a new townhome, consider all of the costs: mortgage, upgrades, HOA fees, furniture, window and other treatments, utilities, landscaping and maintenance, and insurance. And when it comes to insurance, see what the HOA already covers.
Find out what warranties your new townhome will come with. Builders commonly offer a one-year workmanship warranty and a 10-year structural warranty. Make sure the warranties clearly state what is or isn’t covered and if there are limitations for damages. For appliances and the roof, you should receive the manufacturer’s warranties. Also find out if the warranties are covered by insurance.
Pay attention to design & layout details
Because you’ll be sharing walls with neighbors, find out how soundproofed the walls will be. The thickness of the walls and type of insulation will also affect your energy bill, which can make a huge difference in cost over time.
Because townhomes only have windows at the front and back, you may want to consider skylights. If the builder doesn’t include them as standard or an upgrade, find out if the HOA will allow adding them later on.
You will also want to know what views you can expect from your windows. My parents lived in a townhome that backed onto a beautiful lake with a walking path that circled the lake. There was no fear of more units being built directly behind them, and you’ll want to find out what the builder’s or city’s plans are for the adjacent areas.
It’s time to get started!
Ready to start shopping for your new townhome? NewHomeSource.com allows you to search just for townhomes right in the area where you want to live.
For the last 16 years, Rachel Kinbar has been a writer of articles, blog posts, white papers, essays, infographics, web copy, sales copy, scripts, poetry, lyrics, and more. She has keen research skills that she applies to a wide variety of topics, and she especially loves topics related to design, history, and sustainable living.