Would a Homeowners Association be Right for You?

HOA Condo LandscapingAre you looking at homes or condos with an HOA?  If you are looking into buying a home, you may want to do a little more research before you purchase. In today’s real estate market, many HOA’s are underfunded which may require you to make a larger than normal payment to fund the HOA.

A Homeowners Association refers to a legal and formal entity made to maintain a community’s common areas and enforce deed limitations. Their ultimate objective is to protect the values of properties, maintain a community’s appearance and character, as well as meet the expectations of anybody within that community.

Because of this, buying a home with a Homeowners Association could be useful if you want to ensure that your common grounds are maintained, such as community pools and landscaping. However, you should do your research first to avoid getting yourself into undesirable situations because of the rules and financial issues.

Here are several things you should know, learn and explore about a Homeowners Association to help you decide whether this would be the ideal situation for you:

1. Check if any special assessments have been made. Viable funds and studies of reserve could help any community stay away from needing special assessments.

2. Review the funds of reserve, which pay for improvements in the long term, like road paving, pool work, or condominium complex work. Finding out the amount of money that has to be inside the fund might be difficult. However, if you are a buyer, you can find out if your selected Homeowners Association has conducted reserve studies as of late. Such studies will also advise how much money needs to be kept every year to make sure that every need is paid for.

3. Review the charged fees of assessment, which are usually charged by the month, the quarter, or the year. It would be essential to discover exactly which assessments you will be paying for. This usually includes community pools and playgrounds, walking trails and clubhouses, lawn care and landscaping. It might also include the maintenance of common grounds, such as snow removal or trash pickup. If you are aware of this information, you will better understand how much you should budget for these areas that will become your responsibility after buying a home in a certain community.

4. Study the conditions, covenants and restrictions. Now, this might be a problem since you will discover what a community allows and doesn’t allow when it comes to home and yard changes. Many buyers buy homes, only to find out that they can’t add swimming pools or make additions or even plant a certain type of tree! To avoid this, you need to find out the basic rules when it comes to flying flags, satellite dishes, outside antennas, home businesses, patios, fences and pets. It would be absolutely essential to know which rules you have to live by in certain Homeowners Associations.

5. Keep in mind that rules change as time goes by. Because of this, you should periodically review the rules to ensure that you live peacefully within your Homeowners Association. The key in today’s market is to make sure the HOA is funded and has plenty of reserves.

21 thoughts on “Would a Homeowners Association be Right for You?”

  1. Las Vegas Real Estate Agent Paul

    Good Article… Many buyers take HOA’s for granted and don’t bother to look at the financials. As a Master Planned Community specialist in Las Vegas, just want to point out that different states have different laws concerning associations. I often get buyers who have heard of the nightmares going on in Florida or California and automatically assume the case is the same in Las Vegas.

  2. As a resident of a common interest development for the past decade I can see both the pros and cons about living under the governance of a HOA. Your five points are very helpful and the underpin to all of them is whether you can thrive in social structure where decisions on one’s habitat/environment is made communally rather than individually. And like all social organisms today, there is the bad elements mixed in with the good populace.

  3. Ryan "Tiny" [email protected] Indiana Real Estate Agent

    I personally live in a community with a HOA. I don’t mind it too much. Obviously it would be great to avoid the fees, but they truly offer a lot of value for the money. We have tennis courts, basketball courts, pool, soccer, and a park like area for sports.
    We love our neighborhood here in Avon, Indiana!

  4. It all comes down to how much it costs and what do you get for it. Also I know that the senior community has spent there lives dealing with the nuances of yard work and shoveling snow their whole lives, and the HOA makes it nice to not have to do it anymore.

  5. Good tips. If a HOA is maintained pretty well I think it could be an awesome place to live. Imagine having a pool available for your kids while they are growing up?

  6. Automatic Driveway Gates

    I agree with you Rachel. If HOA is properly maintained then it would be a phenomenal place to live. The pool would be the icing on the cake.

  7. Nice post! Most homebuyers these days purchased homes or condos not simply finding a home or condo they like. Most of them are worried about how to deal with HOAs. Like for example, There might be really things HOAs will implement that one might not like but like the rest of the members do, there is nothing they can do but just follow.

  8. It is also nice if you know someone in the neighborhood so you can check on whether or not the HOS is being consistent and fair in terms of enforcement. It is also nice to be able to know whether or not there are any bad politics going on.

  9. Nick [email protected] Life Insurance Agent Training and Contracts

    I agree with Sam a few posts up – getting the inside scoop on the politicking going on within an HOA can really go a long ways towards determining the quality of an association.
    .-= Nick [email protected] Life Insurance Agent Training and Contracts´s last blog ..Legislation Alert! =-.

  10. A lot of this also depends on personal politics. Some HOAs are run by people who seem to have personal agendas. A well run HOA will be a blessing, as it fosters great community spirit and things get done very smothly, a poorly run one can create divisions i the community.

  11. An attorney can help homeowners fill out the paperwork to incorporate or set up your homeowners’ association and can give you advice. If homeowners need help finding a lawyer, they can search for attorneys at Lawyers.

  12. Inform the neighbors and fellow homeowners of the intent to create this association. Not only do they need to be notified of this, but it is a good idea to involve them in the formation. Work with the neighbors or fellow homeowners to create bylaws amendable to everyone and which accomplish the homeowner association’s goals. A homeowners’ association fee will need to be set as well and they will want input on the amount.

  13. Before buying my first home I always thought I would hate having a HOA to deal with. Growing up in a rural area, we could do what we wanted, when we wanted at OUR HOME! Then I was just a kid with no understanding of property value of finances.

    In 2004 I bought my first house and got a great deal in an older, established neighborhood. Unlike today’s newer communities, mine really had not HOA. Yes, we had covenants but that were not enforced and outdated.

    I got such a great deal on the home I failed to take a good look at me neighbors. To make a long story short, they had 4 barking dogs, broke down cars in the yard, a Very Very unkept yard. In 2007 my wife finished school and we needed to sell. Then it hit me that the neighbors house was going to hut my chances of getting a full price offer or anything close.

    While I loved not having old ladies continuously watching me to impose a fine, I eventually came to the conclusion that a HOA is worth having. I have worked too long and hard to loose money because of someone elses neglect to their home. Now I wouldn’t move to a community without a Home Owners Association.
    .-= Dentist in Florence, SC´s last blog ..Hello world! =-.

  14. You can clearly tell the neighborhoods with strong associations, and those without. In newer communities, I think they are more important…the neighborhoods do not have as much character and the trees may not be mature, so much more is visible from the street. In older areas, you can be more eclectic.

  15. Great post. This would make for a great conversation with clients or prospects, as it’s both an important consideration and a way for the agent to show forethought and knowledge.

  16. Marikxon Manurung

    I think you have great post here, I believe if some one want to buy a new home or condos, they need to read all of information on your site. I will keep your site in mind if some one ask me for the things that you mention. Keep going. Thanks
    .-= Marikxon Manurung´s last blog ..Hot Tub Accessory =-.

  17. We have more and more condos popping up all over Salida Colorado, so buyers will have to become familiar with the HOA concepts with all the pros and cons they provide.

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