What Type of Home?
The second step of the home buying process is to decide
what type of home you want, and what features are most important to you.
You will probably look at many homes before you make an offer on one.
Single Family -
This is the most popular type of home ownership - part of "The
American Dream". You normally have more privacy and it is
quieter that other types of properties. You usually have a yard
which you can have gardens, your barbeque and other related yard
items. As the owner of a single family home, you are
totally responsible for paying (along with the mortgage) property
taxes, insurance, water/sewer charges (or septic pump-outs), and all
maintenance costs. The cost for a single family is generally higher
than condos for equivalent size, but that depends on the location.
Condominium - As the
owner of a condo, you own your unit, and a percentage of the
interest of the common areas such as the exterior of the building,
parking areas, gardens & recreational facilities. You normally pay a
monthly fee which covers the common expenses which may include
master insurance, water & sewer, common electric, snowplowing, etc.,
and in the case of larger complexes, swimming pools, function rooms,
exercise facilities, etc. There are usually trustees that run the
condo association with the owners input and approval. There may be
professional management, or in the case of smaller complexes, the
owner may manage the property themselves. Condominiums come in
several styles including garden (single-level), townhouse
(multi-level) and lofts (usually an open concept living area). You
usually don't have to worry about all the common maintenance issues
like landscaping, snowplowing, exterior
painting, etc. If you are considering a condo, make sure the Realtor
you use as your Buyer's Agent has experience in them.
Multi-Family - This
type of home has 2 or more apartments in it. The advantage this type
of home has is you can use any rental income to help cover your
mortgage payment. The disadvantage is that you are now responsible
for 2 heating systems, 2 hot water heaters, 2 electric systems, etc.
Finance companies will usually consider about 80% of the rental
income from a multi-family when qualifying you for a mortgage. This
usually means that you can be pre-approved for a larger mortgage
with a multi than with a single family or condo.
Co-operative (Co-op) -
The owner of a co-op does not actually own the real estate. When you
buy a co-op, you are actually purchasing share of the corporation
that owns the actual real estate and manages the property. Like a
condominium, there are monthly maintenance fees that have to be
paid. In most cases, the buyer has to be approved by the co-op board
before they will allow the sale. Funding the purchase of a co-op is
not done through a conventional mortgage because of the fact that
there is no transfer of real estate involved. There are alternative
forms of financing available, but in many cases people pay cash. You
don't find too many co-ops here on the north shore of Massachusetts.
There is one in Beverly off Sohier Road, and another in Topsfield,
MA. They are an alternative to a condo because in most cases the
management takes care of all repairs, even in the units. But like
condos, the responsibility of maintenance is different for each
complex. Read the co-op rules & regulations before you buy.
You may decide that you like a couple of different
styles of properties, such as a single family and a condo, depending on
the individual property. That's OK. Once you start actually looking at
what is available, you will probably narrow it down to one style.
Alright, it's time to start searching for a home. Here's where the fun
SEARCHING FOR YOUR HOME.