Q: I have been approved for a purchase price of up to $350,000. I’ve noticed in this price range that some properties are townhouses with “fee simple” ownership and some are townhouses or condos with “condominium” ownership. What is the difference and what are the benefits of each type of ownership?
A: “Fee simple” ownership means you own the entire property – interior, exterior and the land it sits on. “Condominium” ownership means you own within the four interior walls of the property. A fee simple property may or may not be overseen by a homeowner’s association (HOA), but a condominium property is always overseen by a condominium association. The benefit of owning a fee simple property is that any HOA dues are going to be lower than condo dues. In the Northern Virginia area, the average HOA fee is around $100/month and the average condo fee is around $300/month, depending on the location. While condominiums tend to be priced lower than comparable fee simple homes, your monthly payments can add up quickly if you have to pay both HOA and condo fees. Fee simple properties may also offer private yard space not available in a condominium. The benefit of owning a condominium property is that you are typically not responsible for as much maintenance. Because the condo association owns the building exterior and common areas, many things you would otherwise be responsible for with a fee simple property, such as the roof, windows and lawn care, are often taken care of for you. The best way to choose between a fee simple home and a condominium is to decide what is more important to you – lower HOA fees and private yard space, or lower sales price and less maintenance? Note: Just because a property looks like a townhouse or has multiple levels does not always mean it is fee simple ownership. Check with your real estate agent to confirm which type of ownership the property falls under.
Have a question for Palmer? Send an email to palmer@palmerharned.com.
Posted on March 2, 2015 at 3:38 pm by Palmer Harned
