Speaking in generalities here, the differences in Condominiums and Town Homes comes down to the different types of Ownership as opposed to the style of living space.
Condominiums or Condos are units that are grouped into a building that is owned by a board or group. The group sells the individual rights to occupy the inside of the unit. They owner buys the living area and other common areas are generally owned by and controlled by a condo board. These board members control everything from the maintenance to any changes that the individual owners may wish to make.
Town Homes are single family units that are usually connected with a common wall; they include a yard and share the expenses of maintaining the common areas of the complex. Townhomes may be maintained by the owners or the townhome subdivision. Townhome is a term of ownership.
Even though the lines have become blurred over the past few years, the result is the same that owners wish to have a home without some of the headaches that go along with buying a house.
When you are writing contracts for Condos and Town homes, another aspect to take into consideration is that the prospective buyer must also be approved by the condo board and sometimes the townhome association.
During the previous years, some of the condo communities and town home subdivisions were over sold to investors. Banks did not like this and were not loaning for some assets because of the high volume of investment real estate.
Watch for these unique aspects for contract negotiation and make it a priority to determine if the unit can be purchased with a mortgage or if it needs to be a cash transaction.