Is it a House or a Condo?
You may not know it, but what we call a “house” in Austin has run into a semantics challenge. The photos to the left are of homes in a new neighborhood in which one of my buyers just purchased a new home. Look at the pictures. Do you see “houses” or “condos”?
These particular homes are officially condos, but they are also detached single family homes, or what we would normally call a “house”. If you drive through the neighborhood, you see houses, but if you want to own a home in the neighborhood, you’ll purchase a “condo” that looks like a house.
The semantics challenge becomes an issue in how a property is listed for sale in the MLS. Some Austin Realtors have been listing detached condos such as these as “houses” in the MLS, which is incorrect. The enforcement people at Austin Board of Realtors have been changing these listings from “house” to “condo” when they catch them, which has infuriated some Realtors.
Listing these properties as “condos” doesn’t seem right either because the homes are not what most buyers would call a condo. They are closer to a house than a condo in appearance and lifestyle. You have no common walls and you have your own fenced yard, trees, your own sprinkler system, a driveway and garage. You are responsible for all exterior siding maintenance and your own roof if it leaks or needs repair. That’s essentially just like owning a house.
But if you purchase a home and don’t own the lot it sits on but instead have fractional ownership of the entire development, and pay HOA fees to maintain the common areas and “roads” (uh, parking lot shaped like a road), then in fact you haven’t purchased a house as we legally and traditionally define one, you’ve purchased a condo.
What upsets Realtors though is that listing a house that is legally a condo in the condo section of MLS means that it won’t be exposed to nearly as many buyers as it would if it came up in “house” searches.
Most home buyers don’t want a condo, they want a house. Furthermore, if you’re my house buyer and you want to purchase a real house where you own the home and the lot it sits on, we don’t want your MLS search results being polluted with listings that in fact are not legally houses but are instead condo homes.
So what’s the answer?
Our Board of Realtors has split the condo category into two types of condos – attached and detached.
Here is the notice they sent us:
In response to subscriber request, ACTRIS has added two new subsets of the “Condo” section of MLXchange: “Condo Attached” and “Condo Detached.” These subsets accurately describe traditional condos and single-family stand alone structures legally zoned as condominiums. Properties that fall within the “Condo Detached” field will default to the “House” field in search results, but may be excluded from search results.
Did you understand that last sentence? Me neither. At present, out of 12,273 active residential listings in the Austin MLS, only 45 are listed as “Condo Detached”. All of the former “condo” listings were converted to “condo attached”, and it’s up to the listing agent to change any detached condos that were formerly properly listed as condo to “condo detached”. But I still see detached condos listed as “houses”, so the cleanup and recategorizing isn’t complete, mainly because not all of the detached condo homes have the words “condo” or “condominium” in the legal description, and the Board has been using legal description searches to find and change the renegade listings.
So what does all of this mean to you as a buyer? It means that if you would at least consider a detached condo in your home search, you need to let your agent know to include “condo detached” instead of just “houses”.
What are the downsides of a detached condo? Well, mainly the higher HOA fee. The one I just sold has a $75/mo. HOA fee. But that includes mowing, so if you would be paying for lawn service anyway, it’s not a bad deal. But it doesn’t included back yard mowing, so your mowing responsibility isn’t 100% eliminated.
The other downside might happen upon resale since the home cannot be listed as a house but instead must be listed as a condo, which means less exposure. If the use of detached condo is widely adopted, which it probably will be over time since more and more neighborhoods are built now as detached condos, then that downside will become less over time.
But even with these downsides, and after looking at traditional homes in the same area, my buyers determined that this detached condo community and the floorplan and price we were able to negotiate was the best solution for their needs.