As you're shopping for a home it may seem like everyone who has an opinion on what type of home you should purchase. You can listen to their experiences about different home types all day long, but in the end, the only person who can decide what type of home to purchase is you and you alone. How do you know what kind of home to purchase? You have to look at your lifestyle, your wants and needs, and what your life will look like as you're living in your future home.
When you're determining the best type of home for you and your family to buy, look first at what type of lifestyle you have now as well as the lifestyle you want to have in the future. If you're not interested in doing home maintenance or yard work, you'll want a much different home than the avid gardener. All buyers have different needs and wants in a home. If you're having a hard time coming up with yours, use our needs and wants custom PDF builder to determine what your wants and needs are and then send them to your real estate agent.
Once you've taken a look at your wants and needs in a home, use this article and infographic look at a few different home types and see which one would be best for you as a buyer.
A foreclosure is a bank-owned property. The previous owner of the home was unable to make the payments, so the bank had to repossess the house.
A buyer who should consider a foreclosure is someone who is interested in getting a deal for a home but at a normal timeframe. Most foreclosures are priced so they pay off the remaining part of the mortgage, which means they're much less than a regularly priced home. In fact, a foreclosed property is usually 30% less than a non-distressed property.
However, this buyer must also be interested in doing some DIY repairs around the home. Foreclosures are notorious for being in bad shape, especially if the property was abandoned. A homeowner going into foreclosure doesn't have enough money to fix appliances that run down or problems in the structure of the home, nor will they have enough money to maintain their home. This results in a home that's in less than perfect condition. If the buyer purchases the home in an auction there's virtually no way to see what the home's interior looks like, or determining what shape it's in. If a homeowner buyer the foreclosure as a Real Estate Owned property, there is a small chance they can have the bank pay to make some of the repairs, but it's completely dependent on the bank, listing agent and property.
A short sale is a home that's being sold for less than what the owner owes on the property. The owner may have gotten a second mortgage and lost their job and now must sell the home for less than what they owe.
A buyer who should consider a short sale is someone who wants to get a deal for a home but doesn't mind waiting for it on an undetermined timeline. They also should be OK with doing DIY repairs. With a short sale, it's more likely to get the home in an "as-is" condition than it is with a Real Estate Owned foreclosure. The short sale owner doesn't have the funds to be able to fix what lack of money and maintenance has done to the home. However, even though the home may be in a bit of a bad condition, short sales are more likely move-in condition. You may just need to spruce up the front yard a bit and clean up, instead of doing major repairs like a foreclosure. And the great part is, that small amount of work can increase the equity of the home quickly.
A new construction home is a house that hasn't been previously lived in, and is currently being built. It may be part of a development or you could purchase a plot of land and build your home.
A buyer should consider a new construction home if they're interested in having the house exactly as they want it the second the move in. Most new construction homes let buyers pick out flooring, paint colors, cabinets and floor plans. If the buyer doesn't want to do maintenance on the home and wants brand new systems and appliances, they should definitely go with a new construction home. They'll probably have to give up living in a well established area, as most new construction homes are part of development plans and aren't in the heart of the city. A buyer who chooses a new construction home will also need to pay a bit more money for the home than a previously lived in home, and be prepared to wait for the home to be built.
A condo is much like an apartment, as it's built in a complex, but when you purchase a condo you actually own the property. Most condos are part of a Homeowner's Association, and the condo owner will have to pay a monthly fee for as long as they own the condo. A buyer should consider a condo if they don't want to do yard work or snow removal and want some of their maintenance taken care of by the condo association. Many condos have special amenities that they offer with a condo, like a pool, clubhouse, and gym. This buyer shouldn't care about privacy, and also will want to be closer to a larger city. They probably don't have large pets or a larger family.
A townhome has the same amount of living space as a single family home, but is on a smaller portion of land. The townhome usually has a small backyard and two or three floors. What sets the townhome apart from a single family home is that the house is built directly next to other townhomes.
A buyer should consider a townhome when they need a bit more space than a condo, and want a small yard. Townhomes often have HOA's as well, which will dictate more about how the home and yard look than the condo's HOA. If the buyer doesn't like following the rules and wants more flexibility to do what they want with the home, they may want to stay away from townhomes. Townhomes are generally cheaper than a single-family home, but have less privacy since the townhomes are built next to one another.
Lived-in Single Family House
Finally, a lived-in single family house is the last "type" of home on our list. This is a house that stands on its own on a piece of land. It's been previously lived in, and it's usually what you think of when you think of buying a home.
The buyer who should purchase a single family home is one who doesn't want to be constrained by HOA's telling them how to paint their shutters or how to take care of their lawn. They should be OK with doing maintenance on their home and doing DIY repairs that you pay for themselves. They should also consider getting a home warranty to help repair or replace failed systems and appliances. The buyer will want a larger plot of land for a yard, and want to live in an established community.