It comes down to the dirt.
That's how Don Oakes, president of Mortgage South, simplifies the difference between buying a house and buying a condominium.
"Do you own the dirt? On a condo, you don't. You own inside the [building or unit]," he said.
There are other differences, both from a living standpoint and a financial perspective, in owning a home versus owning a condo.
1. The same rules will apply on a townhouse as will apply on a house, Oakes said. The sale is essentially of a lot on which there happens to be a dwelling. A condominium can mean both a high-rise type of building or a house within a development.
2. Condo owners often pay a fee to a homeowners association, which covers the expense of maintaining common areas. This might include lobbies, courtyards, hallways and elevators. "Your HOA fee would cover keeping all these areas clean," said Beth Harrell, an affiliate broker with Real Estate Partners Chattanooga.
3. There is no insurance paid on the exterior of a structure with condo living. A condo owner will only pay insurance for the unit he or she owns. With a house, there is insurance to be paid on the property as well.
4. A house means more autonomy; a condo means more convenience. "The disadvantage is that there's some control there," Oakes said of the choice to go condo.
5. A condominium, especially a unit within a contained building, can have security advantages, according to Harrell. Many will have entry codes or intercoms at exterior doors. Passersby are not able to see darkened windows or neglected mailboxes. "If I'm gone for a week, I don't have to pick up my papers," she said.
6. For those seeking a second home, a condo can provide the convenience of ownership without the hassle of home maintenance. Oakes told of a couple from Macon, Ga., who keep a condo in Chattanooga, where their daughter resides, in order to have regular time with their grandchildren. According to Harrell, Chattanooga is becoming a popular weekend destination.
7. There is no standard demographic of condo owner. While both Oakes and Harrell cited empty-nesters as expected buyers, Harrell said she has also seen an increase of young professionals as well as families opting to move away from the suburban living. "A lot of times, teenagers love living right at the river's edge," said Harrell, of the families choosing to reside in downtown units.
8. According to Oakes, government-backed mortgage giant Fannie Mae will provide financing for condominium units only in structures where the commercial space in the building does not exceed a certain percentage. That sends the buyer to a bank for individual financing, at which point, Oakes said, the process of applying for a loan is identical regardless of structure. "If you're going to buy a house, you don't have that thing to think about. If you're going to buy a condo, you need to know what kind of financing is going to be available."