Imagine you find the perfect home with beautiful landscaping, a fresh paint job and in the perfect subdivision. But upon visiting, you see the not-so-perfect run down house next door that hasn’t cut their lawn in 2 months and has a mailbox with a lean. Homeowners associations were designed to prevent these issues from happening, considering it could bring down your whole neighborhood’s property values.
What is an HOA?
HOA stands for the Homeowners Association which makes and enforces rules for multiple-unit buildings as well as planned communities. When buying a property with an HOA, you agree to abide by their rules and pay the HOA fees, which can vary dramatically depending on community features and location.
The Good and the Bad of an HOA
An HOA can be extremely beneficial, but also a pain sometimes. It’s important to know all the facts of the HOA before purchasing a home within its boundaries. Having a well-run homeowners association can actually increase your property value by 4.2%.* However, a poorly run HOA can be a nightmare. A homeowners association can also cost you more money on top of your monthly dues when a major expense arises such as a roof repair or replacement on a community building, which the HOA doesn’t have enough reserves to cover. They will at times charge members a special assessment to cover those expenses.
Know Before you Buy
All HOA’s are different, so it’s important to read an HOA’s rules and covenants before choosing to purchase a property within it. Don’t rely on knowing the rules from past experiences or others because it varies from HOA to HOA. If you are looking at a property and cannot find the homeowners association covenants and rules on their website, ask your real estate professional to acquire them or contact the HOA directly.
It’s also important to know the HOA’s reputation before you buy. You can talk to some of the current residents within the neighborhood about how the HOA functions, how conflicts are handled, etc.
Regardless of which homeowners association your dream home is a part of, it’s important to know all the facts before you buy! If you have any questions about HOA’s or purchasing a home, feel free to contact us at (615) 279-5310. We’d love to help!
