How does residential real estate work?

There are many different types of residential real estate: traditional houses, condos, mobile homes, etc. But what's the difference between these types? Marshall Brain breaks it down for you in this episode of BrainStuff.

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Episode Transcript

Speaker 1 (00:00):
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(00:30):
Brain with today's question, what is the difference between a house,
a mobile home, a condominium, a co op and a
town house. The world of residential real estate is huge,
and if you're in the market to buy a home,
it can get a bit confusing because there's so many
different ways to buy a home. Let's take a look
at the five main forms that a non rental home

(00:52):
may take and try to sort out the differences. First,
you have a house. When most of us talk about
a house, we're referring to a free standing single family residents.
There's also such a thing as a duplex that the
free standing structure divided into two connected single family units.
The main defining characteristic of a house, besides its free

(01:15):
standing nature, is the breadth of ownership responsibility taken on
by the buyer. The owner of a house owns the
building itself as well as the land, and it is
therefore responsible for all upkeep associated with those areas, including
lawn and landscape maintenance, painting repairs, redoing, the roof and appliances,

(01:36):
the real estate taxes, and everything else. Sometimes houses may
be grouped together in a definite community or subdivision that
has shared spaces, such as a pool or a playground.
In these communities, homeowners pay a fee to a homeowners association,
which maintains the shared spaces and may provide such services

(01:57):
as lawn care, landscaping, and security. The homeowners association sets
rules and regulations for the community, some even pertaining to
the aesthetic appearance of the houses, so you might not
be able to paint your house a certain color because
the homeowners association doesn't let you. A town house is

(02:18):
like a house and that the owner owns both the
structure and the land on which it sits, but it's
not free standing, so the land on which it sits
is usually limited to the front and back yards. Town
Houses are connected to one another in a row and
are usually two or three stories tall. They share many
of the characteristics of a condominium. A condominium is like

(02:41):
a townhouse in that the units are attached to each other,
but if you own a condo, you do not own
any land. A condo owner owns only the unit itself,
which is taxed as an individual entity, and sometimes a
percentage of the common areas of the community. Condo communities
may provide such shared facilities as a pool, a gym,

(03:02):
tennis courts, a clubhouse, all maintained by the condo association,
which also takes care of all the day to day
management tasks. This is one of the advantages of condo living.
It's all the joy of using the amenities, but none
of the hassles of maintaining them. Condo owners pay a
monthly fee to the condo association, which also sets the

(03:23):
rules for the community. Then there's the cooperative or the
co op. The main difference between condos and co ops
lies in the specifics of ownership. If you own a
co op, you don't own the unit itself. Instead, you
own a share in the cooperative corporation. This share gives
you the sole right to your living space, but it

(03:46):
doesn't give you ownership of it. For this reason, your
real estate taxes maybe covered by your co op membership
because the building is taxed as a whole. Co Op
members pay a monthly fee of the corporation, which, like
the condo association, maintains the building and all shared spaces
and handles daily management tasks. A co op is generally

(04:08):
stricter about screening perspective buyers and has more say in
the handling of your own unit. Also, a co op
maybe more difficult to finance than a condo, because co
op corporations may deal only with certain banks. And finally,
there's the mobile home. The clear distinguishing characteristic of a
mobile home is that it's mobile. It can have wheels,

(04:31):
and it goes down the road when it's being installed.
Mobile homes are sometimes called manufactured homes. Buying a mobile
home is similar to buying a car. Sales tax applies
and you receive a title of ownership. Mobile homes, unlike
other forms of housing, depreciated value as cars do. You

(04:52):
can put a mobile home on your own piece of
land where it acts a lot like a house, or
you can put it in a mobile home park. Land.
Own ownership is handled differently in different parks. In some
you must buy the lot for your home, and others
you lease it instead of buying it, and in others
you don't buy the land at all, but instead purchase
a share in a corporation, much like a co op.

(05:14):
Property taxes are handled in various ways depending on these distinctions,
like condo communities, co op buildings, and town homes. Mobile
home parks have rules that must be followed by the residents.
For more on this and thousands of other topics. Because
at house staff works dot com, streaming TV shows and

(05:38):
movies directly to your home is a breeze with Netflix.
As a Netflix member, you can instantly watch TV and
movies on your PC, Mac, mobile device, or right on
your television. Get a free thirty day trial membership. Go
to Netflix dot com slash brain stuff and sign up
today