November 30, 2022

Buying a Home with HOA: Things to Consider

Homeowner associations (HOAs) are entities that enforce community rules on homes. They govern the aesthetics in an area, housing development, or planned community. When you join them, you agree to their terms and fees when you close on a house in a community with HOA. If you’re thinking about buying a home with HOA, there are a few things you need to know first. Understanding the essence of an HOA is essential to make the right decision when buying a home. Below we’ll go over everything you need to know about homes with HOA.

Buying a Home with HOA: Things to Consider

In exchange for living with HOA rules and paying monthly/quarterly fees, HOA members don’t have to contend with messy neighbors, dirty streets, or loud surroundings. They get access to community amenities like landscaping and swimming pools. People who are shopping for homes have fewer non-HOA options these days. In fact, over 50% of American homeowners are subjects of HOA. Since it’s becoming a more common option, it’s important that you learn more about it before making a purchase. Here is what buyers should know before buying a home with HOA:

Learn All the Rules & Regulations

It’s important for buyers to learn all the rules and regulations of a home that interest them before taking the next step. Being familiar with the requirements is the only way to see if living in that community is a good move for you. HOA members cannot ignore orders from the association. HOA agreements often include punishments, including liens and hefty fines.

Get Informed About the Home’s Conditions

Something important you need to keep in mind before buying a home with HOA is to ask them to identify any issues the house may have. Do not rely on being notified of any lingering issues between the association and the current owner of the house that interests you. Failure to ask about this subject before you buy could result in inheriting them when you purchased the property. This can be a problematic mistake for buyers, so be sure to get fully informed on the state of the house before making a decision.

Don’t Forget HOA Fees

While planning your budget for your monthly expenses, it’s important you don’t forget about HOA fees. Homeowners Associations need funds to operate. They gather these funds via fees paid by its members. You must note that some HOA fees can be quite high. The average HOA fee in Southern California is $366 a month. Of course, the fees will vary depending on location. Fees can also vary within the very same development due to variations, orientation, and square footage.

We recommend finding out how often fees have increased over time and by how much. If possible, try obtaining a printed history of HOA dues for the past ten years. HOA fee increases are generally mapped out several years in advance using estimates of future utilities, labor, and maintenance costs.

The Bottom Line

Living in a planned development has its pros and cons. It’s important to do research about the HOA for the home you’re interested in and think hard about whether you’ll be able to live with the rules. It offers reduced responsibilities of exterior maintenance and enjoying shared amenities in exchange for partial control of your home. How well you embrace those tradeoffs will play with how happy you’ll be in your new home. If you decide to proceed with the purchase, be sure to talk with professionals familiar with HOA to guide you along our journey.

Community Mortgage takes the time to review HOAs when assisting with the mortgage process. We are a mortgage broker who truly cares about every client’s experience. We focus on providing open and honest communication, educating borrowers, and finding the best solutions for every situation presented to us. We are happy to answer any questions you may have. If you have any questions regarding the mortgage process, Community Mortgage is here to help. Contact us today at (619) 692-3630 or click here for a FREE mortgage consultation.

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