Definition
A townhouse is a multi-story home that shares one or two walls with the homes next to it, while the owner typically holds title to both the structure and the small parcel of land beneath it. Most townhouses belong to a homeowners association that maintains the exterior, roof and shared common areas in exchange for a monthly fee. In terms of price and buyer demand, townhouses generally sit between condominiums and detached single-family homes. Because they carry an HOA, selling one means disclosing dues, any pending assessments, and the association's rules to prospective buyers, similar to a condo sale. The shared walls also mean noise and maintenance responsibilities can occasionally become a point buyers ask about during due diligence. Compared to a single-family home, a townhouse's value is compared mainly against other units within the same or similar associations rather than against unrelated detached homes nearby.
Example
Karen owns a two-story townhouse with one shared wall and pays a $145 monthly HOA fee that covers landscaping and exterior upkeep. When she lists it for sale, her agent prices it against other townhouses in the same association rather than against detached homes down the street, since buyers in that neighborhood typically compare units within the same HOA. A prospective buyer asks detailed questions about the HOA's reserve fund and whether any exterior painting or roof work is planned in the next few years before making an offer. Karen provides the HOA's financial statements and recent meeting minutes, which reassures the buyer that no major assessments are looming. With those questions resolved, the sale moves forward smoothly and closes on schedule about five weeks later. Karen says having the HOA documents organized ahead of time avoided what could have been a much longer back-and-forth with a more cautious buyer.