5 things to ask homeowners associations BEFORE you buy
While HOAs govern nearly 25 million families, many first time homebuyers have never lived in an area controlled by the rules of a homeowners association. While there are some things that won’t take residents by surprise, there are things that you don’t want to find out about after you’ve signed the papers for your new home. If you find out that the home you’re looking at is governed by an HOA, here are some things to dig a little deeper into.
Money Matters
HOA's can average $200-$400 per month, which can put the squeeze on your budget if not planned for. Make sure you find out right way if the home you’re looking at will have this expense by meeting with a mortgage loan officer.
You (Sometimes) Get What You Give
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HOA dues care for amenities like sidewalks, pools, & other shared spaces, but sometimes they cover services like electricity, internet, or even certain types of insurance. Each HOA is different & is ruled by a different set of CC&Rs so it’s important to understand what your dues will go towards & how that can shape your budget.
You (Sometimes) Get What You Give
Know the Rules
Many Homeowner Associations have rules dictating the appearance of your home. If you’re not wanting to abide by these rules, then you are better off looking at another property. These restrictions can cover anything from color scheme to the length of your grass so it’s important you know, understand, and agree with their rules.
Guess Who's Coming to Dinner
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You’ll want to also ask about the number of units in your HOA that are owner-occupied, renter-occupied, & unoccupied. Unoccupied properties mean that the HOA budget will most likely be underfunded & therefore planned renovations can be pushed back. Renter-occupied properties are not inherently bad, but may lack upkeep, & some lenders may require that fewer than 25% of units are renter-occupied. In short, if you’re going to be a part of a Homeowners Association, you should know who you’ll be living & working with.
Guess Who's Coming to Dinner
These are just a few of the considerations when looking at a home located within HOA-governed area. Working with a real estate agent who you trust and who knows the area well will be your best way to avoid any costly and disappointing surprises.