You found the perfect townhouse to buy. You knew when you walked through the door this place is for you.
It has everything you want: Granite countertops, a breakfast nook off the kitchen, and the complex has a hot tub and pool. You love the neighborhood, and it’s close to work.
But it’s in an HOA. What is an HOA? You know the acronym means Home Owners Association, but you don’t know much more.
What is the purpose of an HOA? Are there extra costs with an HOA? What are the benefits? What are the disadvantages? How can a realtor help?
Read on to learn what buying in an HOA is about.
What Is an HOA?
An HOA exists for the benefit of a community of homeowners. Volunteers from the community and/or professional property managers manage the operations of the HOA community.
Volunteers elected to the HOA manage finances, maintain common areas, and enforce rules. Board members make decisions to improve property values. Less experienced executive boards hire HOA management companies to deal with day-to-day operations.
What Are the Average HOA Fees?
HOAs charge monthly fees to pay for the cost of property maintenance. Fees vary depending on your HOA and the amenities it offers.
Residents pay an average of $150 – $300 in monthly HOA dues. In addition, HOA fees cover the pool guy, the gardener, and other expenses for maintaining common areas.
HOAs exist to maintain and increase property values. People don’t like it when their property goes down in value.
Homeowners must maintain their homes to a strict standard outlined by the Covenants, Conditions, and Restrictions (CC&R). Deferred maintenance causes home values to drop. The rules ensure owners take care of their homes to keep property values on the upswing.
The Downside of HOAs
89% of HOA residents are happy with their organization. But, HOAs have a downside.
The CC&Rs tell you what you can and cannot do to your property. CC&Rs regulate the color of your house, how you manicure your front yard. The HOA can forbid composting or solar panels.
Do you want to hang some Tibetan Prayer Flags on your patio? You might get a knock on the door from the HOA telling you, “No, no, no.”
Failure to follow the HOA rules results in fines attached to the property. In addition, you can’t sell the house until you pay the liens.
Types of HOAs
HOAs exist in 5 different types:
- Homeowners Association
- Condo Association
- Master Association
- Housing Cooperative
- Civic Association
The first four associations function in similar ways with minor differences. The associations operate to preserve property values.
But, the Civic Association functions differently. It comprises neighborhood volunteers organizing to better their communities.
Unlike other HOAs, membership isn’t mandatory. Civic Associations cannot enforce rules or impose dues.
Work With a Real Estate Expert
Real estate transactions come with many moving parts. Adding an HOA increases an already complex process.
What is an HOA? Real estate professionals know.
You want to work with a real estate expert when buying in an HOA. Realtors deal with property contracts and HOA stuff all day long. Their expertise and knowledge help you make the right decision for you and your family.
Learn more about buying real estate in HOAs. Then, contact us to get started on your dream of homeownership.