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  • Writer's pictureJesse Ledbetter

Condo vs Freehold

In a recent assignment, a loan officer and a real estate agent were baffled that a duplex could not be used as a comparable for a multi-family condo. The agent went as far as to say they had "comped it out" with duplexes and single-family condos, and couldn't understand why we couldn't. We couldn't because what she described would lose an appraiser their license and a Loan Officer using such a report to make a federally backed loan would be fraud. Sadly, the Central Virginia Regional Multi List Service (CVRMLS) refuses to help the situation and still lumps townhomes and condos together.

A Condo is a form of ownership.

Freehold is a form of ownership.

"Townhome" is a style of construction.

A duplex is a multi-family form of construction.

A multi-family condo is a form of ownership.


In a condo, you own the interior of the structure and have limited rights over the exterior of your home (you may get voting rights on what happens to the outside of your home, but you have no individual ownership). How much would the value of a standard home be affected if I stripped the rights over the land and exterior away? Freehold is when you own a property in its entirety.


Further, the buyer pool of single-family dwellings and multi-family dwellings is fundamentally different. By the definition of reality, the single buyer of a multi-family dwelling can't occupy both units. The most typical buyer is an investor. The buyer of a single-family home (condo or freehold) may be an investor but is far more likely in most markets to be an owner occupant.


So, why can't a real estate professional use a single-family condo or multi-family freehold property as a comparable for a multi-family condo? To put it simply, because these properties are not comparable in terms of ownership or buyer pool - the most fundamental forms of comparison.



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