What should buyers know about HOAs?
If you’ve ever lived in a home that is part of a homeowners association (HOA) then you know there are some pros and cons to living in a place governed by one. Yes, it can be hard to deal with all of the rules and regulations at times, but HOAs offer some beneficial features as well, such as maintenance. Ultimately, it depends on what you are looking for in a property and what you are willing to pay for.
While HOAs are not for everyone, you might find that they work better for your needs. So, let’s take a look at a few things to consider when looking at a home in an HOA. Also, it’s important to remember the rules of an HOA can greatly vary depending on your neighborhood.
- Fees. The costs involved with an HOA are often the biggest drawback. There is a monthly or yearly fee that you have to pay just to live there. The amount depends on the features of the community, the location, and how much maintenance is required to name a few. Fees do vary greatly and can fluctuate, so it is important to look into the history of the property that you are interested in. Most fee increases happen annually and are pre-determined based on the upkeep of the property over the years. HOAs can also charge a one-time special assessment fee if something major needs to be repaired such as a roof or HVAC system.
- Rules and regulations. Every HOA has its own rules and regulations known as covenants, conditions, and restrictions (CC&R). It is very important to read through these before making a decision on a property. Some of the things that can be restricted are the color of your house, the vehicles allowed to be parked in your driveway, whether you can plant or remove trees and several other things that you may not be used to having regulated.
- Insurance. Depending on the state you live in, there may be requirements to pay into insurance policies that cover common areas as well as your personal property. This can be a big shock if you were not aware beforehand so it is always good to look into the insurance requirements.
While HOAs can intimidate some people with all of their fees and requirements, they do often help make your new neighborhood a beautiful place to live. Don’t let horror stories about some HOAs scare you, many are not like that at all. In fact, not all HOAs are mandatory, some communities offer voluntary HOAs. In such a case, you have the option of paying into the HOA and receiving all of the benefits that come with that. You can also opt not to pay into the HOA and there is no requirement for you to do so, nor is there any legal action your neighbor can take if they prefer to be a part of the HOA.
HOAs can also be a great option for someone who is looking for a community with amenities and less maintenance required on their end. There are several fees that are required in order to provide all of the conveniences that these HOAs offer. Like with everything else when it comes to your home search, it’s important to understand what you’re getting into before making a final decision. Ask your Realtor or any other real estate professional, including us, involved in your transaction for help whenever you need it!