A homeowner’s association (HOA) is self-governing organization of homeowners in the same neighborhood or development. The HOA usually has some control over how properties are utilized and provides services and amenities to the community.
While most homeowners live in HOA communities and come to appreciate its benefits, some people may find the set of rules and bylaws that come with them too restrictive. It is important for homebuyers to do due diligence on the HOA’s power, finances, and history before closing on a home. Following are some tips to help you ask the right questions and make a sound decision:
Know the Restrictions: Because HOAs have broad powers to regulate activities, make sure to check and read through the governing documents. There may be rules that limit home occupancy, pet size and quantity, and holiday decoration. The HOA may also set architectural and home maintenance standards.
Understand the Financials: In addition to the regular dues, HOAs may impose special assessments against all owners to cover for unexpected expenses for the repair or improvement of common areas as well as a capital improvement assessment for planned renovations of the property. Make sure to inquire about any big-ticket projects in the works, such as building a new structure, swimming pools, or roof repairs.
Talk to Neighbors: It never hurts to ask residents what they like or dislike about living in the community. They may have some crucial information for your decision-making process.
Meet the Board: Take the time to meet the HOA’s board of directors. Your real estate agent should be able to make introductions and provide you with their contact information. By knowing and talking to board members, you may get a sense of what’s going on in the community and the HOA’s financial situation.
Are you interested in purchasing a home or refinancing your current home? I’d love to help! Call me today to set up an appointment so we can review your financial goals.Tags: Homebuying