Congratulations! You have your pre-approval from your favorite online Seattle mortgage lender. Now it is time to go shopping for your new home! Have you decided which type of property is best for you? Let’s consider the differences between single family homes, townhouses, condominiums and multi-family homes (duplex or triplex).
What is a single-family home?
By definition, a single-family home is a detached dwelling unit, and is completely surrounded by open space on all sides. It is the most common type of residence listed for sale in Seattle, and around the United States. The single-family home has its own lot, and is intended for use by an individual family. The lot is for the sole use of the owner of the property. Generally, a single-family home has only one kitchen. The addition of another kitchen, or separate basement dwelling, will change the zoning classification of the home. You must be aware that without the proper state and local permissions, an owner could be subject to a lawsuit, fines and forced deconstruction of the second unit.
A single-family home can give the benefit of an attic, basement or spacious closets, so the owner can enjoy a plethora of storage space. Most neighborhoods also allow for the addition of a shed, detached workshop, or possibly even a swimming pool. If a private garden and large lawn is on the top of your priorities, a single-family home is key. Because there is distance between the home, and the neighbors’ homes, there is added privacy and the ability to build a fence and create a safe space for the family dog. Of course, the costs of all improvements or repairs to the home are borne solely by the homeowner. Do not forget that budgeting for unforeseen, major expenses such as a new roof or HVAC system is a necessity.
For the architecturally savvy or history buff, Seattle boasts locally popular styles such as the historic “four square” or Seattle Box. This geometric two story usually features simple, square architecture, and an inset front porch. The Bellevue area, near Lake Sammamish, boasts many classic mid-century modern homes, featuring cathedral ceilings and aesthetically pleasing decks for outdoor enjoyment. This design has made a resurgence in popular culture as of late. Of course, the availability of the charming craftsman bungalow abounds in the Seattle area, and features an open space floor plan for more informal living, in contrast to the Victorian or Tudor-style home.
What is a multi-family home?
Simply stated, a multi-family home is a stand-alone structure which houses two or more separate living spaces. Consider, for example, a duplex or triplex. The most common duplex, is a side by side structure with one shared wall. Each housing unit has its own kitchen and living space, independent method of ingress and egress, and usually two separate garages. While it is possible for a duplex to be owned by two separate people, for purposes of this article we will focus on a single owner of a duplex.
Generally, your favorite Seattle online mortgage lender will consider both sides of the duplex as one whole property. Living in on of the units will then have the advantage of being an owner-occupied property, and subject you to the less stringent underwriting guidelines of a single-family home.
A duplex provides less privacy and autonomy than a single-family home. The yard will be shared by the occupants of both units. However, there are many advantages to owning this type of home. The second unit of a duplex can be used for a variety of purposes. Most commonly, you can rent out the second unit and use the steady stream of rental income to assist in payment of your mortgage and property taxes. Repairs and upgrades can be used as a tax write-off. There are pitfalls to the landlord-tenant business, but careful screening of a tenant, preparation of a written lease, and the insistence of a hefty security deposit will help to deter these problems. For those seeking to rent the second unit on a short-term basis, an owner can advertise it as a vacation home and market it on Airbnb. You can generally charge more money per night on a vacation rental, however there may be periods of vacation “low season” where you find your unit empty. Many have used the second side of their duplex as a “mother-in-law suite” where you can be close to elderly parents or family members, without having to share your primary living space.
What is a townhouse?
Generally, they are individual homes that are placed side-by-side, where one or two walls of each house are shared by adjacent homes. Many times, they feature multi-story designs, attached garage and exterior entrance. A townhome owner usually holds the deed to the parcel of land on which the house sits. However, use of this parcel is limited by the rules and regulations of the homeowner’s association.
The homeowner’s association will charge a monthly fee, ranging from very low to possibly quite expensive. At the minimum, they charge for and upkeep of common areas and exterior maintenance. However, some may also include allowances for road maintenance, gardening and yard upkeep, shared water and sewer, and trash pickup to name a few. Any changes to the exterior of the structure must be approved by the association’s governing body. Most associations want to keep the aesthetics uniform. Thus, if you want to change the size of your deck, or add on to your kitchen, the options are fairly limited.
Association dues are NOT included in the monthly mortgage payment and must be considered when budgeting for a home purchase. Most associations carry limited insurance that protects the exterior areas of the units. Townhome owners are responsible for paying comprehensive homeowner’s insurance in addition to association dues.
What is a Condominium?
Condos are generally smaller than a townhouse. They are often less expensive because they come with no land. Instead of a specific deeded parcel, all owners in the condo complex have a shared ownership interest in ALL of the property on which they sit. Where a townhouse generally only shares one or two walls with its neighbor, a condominium may have units both above, below, and on either side. Most condominium complexes have a shared entry way, that opens into a foyer, then divides into hallways with individual doors on the interior, marking the entrance to each unit. Some may also employ concierge or security personnel. Many condominium complexes have unique and attractive amenities, such as a swimming pool, club house, tennis courts or fitness club, roof top deck and dog walking area
Generally, homeowner’s association dues are higher with a condominium, as the association has greater responsibility. The dues include comprehensive insurance for the structure of the building and maintenance of the shared areas. Thus, individual insurance costs for the owner will require a reduced price “walls in” policy that covers personal items and some liability insurance.
For those who detest yardwork and home maintenance, the condominium is a logical purchase. There is no need to budget for major expenses such as new heating systems or driveway paving, as the monthly payment to the association will cover those items. An older person, or someone with limited mobility may benefit from an elevator, or a single-story individual floor plan and less maintenance.
The Seattle real estate market currently boasts many new condominiums under construction. According to a recent article in the Seattle Times more than two dozen new condo projects have been approved for construction in Seattle, thus vastly increasing their availability. For more information here.
So, is a single-family home right for me? Discuss your options with your favorite Seattle online mortgage lender. Consider your ability to budget. Do you feel more comfortable paying a monthly association fee? Or would you rather put money in savings for ongoing maintenance and emergencies. Do you have specific architectural tastes and desired floor plan? Consider if your preapproved loan commitment will cover that. What is your ability and desire to physically maintain your home and yard? If you are handy, or have a green thumb, a single family home may be the best option. Also, consider the human factor. Do you prefer to live more privately in your own home? Or do you desire a unique community experience that can be found in a townhome or condominium complex. Whichever home you choose to purchase, you will enjoy a lifetime of stability, security and an investment for your future.