The Basics About Homeowner Associations
If you’re looking to buy your first home, you might have run into properties that are part of a homeowner association (HOA). Although HOAs can come with a number of benefits (and a number of regulations), they can still drive buyers away just because of their intimidating nature. If you’re interested in an HOA property, don’t worry. We consulted with realtors and HOA experts to learn what buyers should look for in an HOA.
Read the rules and regulations front-to-back.
“Get a copy of the HOA rules and see if there’s anything that will conflict with how you live or what you want to do,” David Marciniak of Revolutionary Gardens. “Your boat or third car could be an issue, and some places even prohibit vegetable gardens. Also ask to see a copy of the landscape design guidelines. Some rules could be problematic for you. As an example, we need a five- or six-foot fence to keep our dog safely in the yard, so we couldn’t move somewhere where we were limited to a four-foot fence.” Mike Boyd, HOA president, puts it simply, “If you find there are issues you don’t like or can’t live with, don’t purchase in that community. Don’t move in and then expect the community to change its documents for your situation.”
Talk to HOA members.
You don’t have to go undercover, but you do need to do more than speak to the HOA reps. “Find out (from your potential future neighbors) who makes decisions and how fair the process is, David Marciniak recommends. “With some HOAs, if you ask to do something that’s not covered in the rules, they’ll say go for it. Others will make a decision based on their personal tastes and whether or not they like you. It can be really frustrating.”
Keep an eye out for transfer fees.
“There are transfer fees,” Agents For Change Real Estate Realtor Doug Vogelsass warns. “When a home that is part of an HOA is sold, the HOA generally charges a transfer fee and/or a resale certificate fee. In Texas, whether the buyer or seller pays these fees is negotiable. Generally it is only a few hundred dollars, but it can surprise you if you are not prepared for them.”
Don’t forget about your dues.
“Pay your dues,” Doug Vogelsass reminds us. “If you don’t pay your HOA fees, the HOA may be able to file a lien against your house. There are even instances where HOAs have initiated foreclosure proceedings for nonpayment of dues.”
Dig a little deeper.
“The real meat and potatoes of the HOA is to see what the reserves are for future exterior improvements,” RE/MAX Advantage Plus Realtor Amy Jurek says. “Forget the monthly meetings and neighborhood parties; show me the money. Before a buyer invests in a development with governing documents and fees, they need to see the bottom line and where those arrows are pointing.”