Buying a townhome

Buying a townhome in the next year? Here are some pointers to help you get up to speed more quickly.

There are a number of things to ask about and learn to make sure that you are happy with the end result of your townhouse or townhome purchase. There’s tremendous variation in townhomes across Silicon Valley, how well the property is managed, how well the finances are managed, how happy the residents are, and so on.

I’ll put my tips into 3 categories: (1) before you go, (2) things to consider while there, and (3) research if you are serious about a particular property.

1. Before you go – there may be things that will take the property off of your short list, such as the property condition, HOA finances or rules. There may be natural or environmental hazards that cause you to skip it. Usually these can be learned before you ever visit the property, and they can save you a lot of time.
2. Things to note or consider while there – some tips on what to perceive while in and near the property.
3. Deeper research if you are serious about buying a townhome or townhouse

Buying a townhome: a little pre-visit recon

Your real estate agent may help you with this – I do with my buyers and we can sometimes eliminate non-starters with a little research. Most people interested in buying a townhome or condo will check these out upfront:

• Maps: Take a look at Google maps and see what can be learned from Google street view and the satellite image, if possible. Street view may provide info on how crowded a complex is and if there’s a parking problem if the townhomes are directly on public streets.
  • Sometimes there are undesirable buildings or structures right next to the complex you’re planning to visit which may be visible from either the satellite or street view. The negatives usually don’t make their way into the MLS photos, so look at these other views to get a more complete sense of the area. Recently I saw a power sub-station directly next to a unit my client wanted to see. We did visit it anyway, but many home buyers would have skipped it. You can often identify high voltage power lines from the maps, too.
  • The Google Satellite View will alert you to undesirable neighbors. Recently we saw a unit that backed up to something odd looking – turned out to be a gas station.
• Odors: If you are buying a townhome in South County or in an area where farming takes place, be sure to zoom out on the map view to see if the property might be impacted by farm smells. In Gilroy, San Martin, and Morgan Hill, mushroom farms can be smelly if you are downwind. And…garlic happens. In Milpitas and North Valley, there are a number of odors, particularly as you get closer to the bay.
• Natural and environmental hazards: you can find out upfront if the property is in a 100 year floodplain, liquefaction zone, near gas transmission lines or near a Superfund site. There are links to maps for almost every kind of hazard out there.  For example, the Cal OES My Cal Hazards Awareness site can provide info on liquefaction, flood, quake, and fire zones.
• Disclosures: you may be able to get them upfront and skim for the local hazards, expensive repairs needed, etc. Most of the time we can provide these before you see the home. Keep in mind that no condo, townhouse, or house is perfect, and most do need thousands of dollars in repairs, replacements, and upgrades. A good rule of thumb is to budget 1% for a condominium or townhouse.

In person visit – when you visit the townhome

Again, your Realtor should help you to see what’s amiss or what’s a big plus as you go through the grounds and the home. No home is ever perfect (not even new construction), but it’s imperative that buying a townhome you have as full knowledge as possible about it upfront.

Once in awhile, a buyer will not get the value of this input. The majority of buyers, though, appreciate it if their buyer’s agent makes sure they see things upfront, while there together.

This is especially important because some listing agents do not know how to complete their Agent Visual Inspection Disclosure (AVID). Some treat it like a marketing piece and write garbage like “new tile counter”, “dual pane windows” or “remodeled bath”. That’s not what the AVID is for. It’s to point out defects above all – things you’d be upset to learn about later. AVID comments should disclose to interested parties issues so that you know what you are buying.

What should an AVID tell people? The AVID might reasonably state things like “Chip in entry floor. Hardwood floor scratched by sliding door. Floor out of level near the fireplace. Musty smell in laundry room. Cement cracked and lifted on back patio. There do not seem to be enough vents at the foundation in the back of the home.” The idea is to point these things out that you as a buyer might miss.  They can be positives, but not usually.

• Maintenance: Take note of the grounds: is the place well maintained? Are the buildings in need of paint? Are sidewalks or walkways in need of repair? Are the plants and lawn trimmed and reasonably tidy? If it looks neglected, it could be an issue of an underfunded HOA and would be a “red flag” that possibly a special assessment will be in the future. (A special assessment is a bill that the HOA hands down to residents when there isn’t enough money to make needed repairs or improvements.)
• Parking: What is the parking situation like? Is every space taken? Is there any guest parking? Is there enough guest parking? In some communities, there is not an inch of spare room in this department, and it can make residents agitated. In others, there’s an abundance of guest parking. The difference is huge, similar to how you feel driving down a narrow street packed with cars versus a wide street with plenty of room to maneuver.
• Inside the unit: Indoors, pay attention to any odors: cooking, smoke or cigarette or marijuana, pets, incense, mold / mildew, etc. Consider it a red flag if there’s something there to mask smells, such as baked goods, candles, air fresheners, or food.
• Noise: Also note if there are any unusual sounds, or are they blocked by the radio being on or a fountain running? Do you hear neighbors’ dogs barking? Loud radios?
• Light: Some lighting is super bright, but how does it look when all the electric lights are off? Are there ceiling lights or is all of the lighting by lamps only?
• Floors: Are the floors out of level? Older homes will naturally have some change over time, but if it is dramatic, you’ll want to later check out the home inspection report to see what the inspector has to say. If concerned, that inspector will recommend a structural engineer or foundation expert do an inspection also.
• Ceilings and walls: are the ceilings acoustic or popcorn style? If the home is pre-1978 built, it may contain asbestos, if so. Are the walls and ceilings level? Any patches? Signs of leaks? If you’re buying a townhome, these are important areas to note!
• Kitchen: in the kitchen, do feel free to open the drawers and cabinets. Learn if there are just shelves or pull outs and lazy Susans in the kitchen. Note if the exhaust fan takes the air to the outside or just re-circulates into the kitchen (check over the hoot to see if there’s an exhaust flu). Are there enough outlets? (If not but it looks like a newer kitchen, the remodel may have been done without permits.)  If there is no fridge present & included, is the space large enough for a full sized refrigerator? (Some flipped homes may not have calculated the needed space correctly.)
• Bathroom(s): are the sink and shower or tub in good shape? Does it appear that there are any leaks?
• Windows and doors: are the windows dual or single pane? Is there any broken glass, missing screens, or missing window coverings? It is a very common strategy to remove all window coverings to make a home look brighter inside – but replacing them will be a hidden cost that can really add up. Are the doors able to open and close fully? If there’s an attached garage, is the door leading to it a solid core or heavy door? For fire safety, it should be able to have a 20 minute “burn time”.
• Storage: if you’re buying a townhome, you will deifintly want to know if are there enough closets for you and your guests? Most homes have both a guest coat closet and a linen closet. If you’re lucky, there is more storage in the home or garage. It’s easy to miss if you aren’t looking for it, though.
• Mechanical: where are the water heater and the furnace or other heater for the home? Where is the AC or heat / cooling pump?
• Bedrooms: are the bedrooms sufficiently distant from each other, or directly adjacent? Is there enough closet space and floor space in both?
• View: what does this home look out onto – a greenbelt, a parking lot, a hotel, a railroad track? The view will matter both for your enjoyment of the home and also for the future “resale value” of it.
• Carports & garages: If there are covered carports and garages, are there living spaces above them? If yes, you’ll want to find out if they have been retrofitted for earthquake safety. If no, that’s a big plus! (More info on this topic at the California Earthquake Authority site.)

Research if you are serious about buying a townhome that you’ve fallen in love with

No house, condo, townhouse etc. is ever perfect AND “in budget”. If you have identified a property the reasonably matches your requirements and involves compromises that you are willing to make, it’s time to do more research (on your own and with your buyer’s agent both).

• Crime: check the rates of theft violent crime, etc. at CrimeReports.com or a similar site. Check the Megan’s Law database, too.
• Schools: if schools are important to you, there are many sites to help you ascertain if the local public schools are a good fit for you and your family.
• Disclosures: Read the disclosure package (we get them 99% of the time) and learn about the property, the area, the HOA and more. It’s a huge number of pages, so the earlier you start, the better. Take notes. Ask your agent if you don’t understand things. Note if there are blanks where there should be answers in the seller’s disclosure forms. It is all important and I cannot list every issue here, but a few in particular, look for
  • Whether the townhouse is a PUD (you own the land under the unit) or a condo (held in condo ownership) – see the preliminary title report and HOA docs / CCRs.
  • What is the percentage of owner occupied units? If below 50% (sometimes higher), your lender may have a problem with it. This will be in the HOA docs, often in the first or second page.
  • Whether the unit is in or near a 100 year flood plain, which will require you to carry flood insurance – the map gets redrawn from time to time, so it’s possible that if you are just near a 100 year flood plain it may someday be in the flood plain. When a municipality does work on water runoff and sewers, I have also seen areas that had been in flood plains removed from them. These flood prone areas are often near the bay or near rivers and creeks.
  • Did the home inspector suggest any other inspections?
  • Is the property between 5 and 10 years old? If so, try to find out if there is any litigation between the builder and the HOA. Litigation can make it hard to get a loan, but is very common in common interest subdivisions of this age. The reason for that is a 10 year statute of limitations on building defects in California. HOAs will often start to investigate at year 7 or 8 to see if there are any defects for which the builder should be approached. If you are an all cash buyer, this may be an opportunity for you as it’s harder to sell a townhouse during litigation, so you are likely to have less competition and a sweeter deal.
• Comps and competition: Your buyer’s agent can help you to see what the probable buyer’s value is for this property when you’re buying a townhome, condo, or house for that matter.  He or she will likely check with the listing agent and try to get a sense of how many offers there might be, the seller’s expectations, etc.
• Lately I’m seeing homes on the market for 4 weeks suddenly get multiple offers, so it’s good to do the engagement. It’s important to factor in that closed sales are yesterday’s news and represent agreements 30 days or so before the closing date. When our clients are buying a townhome or any kind of property, we pick up the phone and try our best to learn about pending sale prices.
• The future price may be lower or higher depending on market conditions. A good Realtor will help you to ascertain that so that you can get the home but not have the horrible feeling that you overpaid. That skill will come from experience (and hard work). Please choose your buyer agent wisely and all of this should fall into place well.

Looking to buy or sell a townhome, or know someone who is?  Clients don’t stay active forever since we get their homes bought or sold – we are always looking for great people with whom to work. Please reach out to me for a no obligation, no cost, no hassle, no commitment conversation or meeting.

Related reading to buying a townhome:

Soft story construction (this site)

What is a cripple wall? (on our popehandy.com site)

Water heater strapping for earthquake safety (on this site)