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 begins!

NEXT STEP: SEARCHING FOR YOUR HOME.