Everything You Should Know Before Buying a Home in an HOA
If you’re looking to purchase a new home, you may very well find yourself falling in love with a home in an HOA. Properties that are part of a community association often have high curb appeal and luxurious amenities, making them desirable for homeowners.
However, HOAs can raise a lot of questions for prospective buyers, such as how much the fees are, what amenities they’ll receive, and the general benefits of an HOA. If a home in an HOA has caught your eye, here are some things you should know before signing on the dotted line.
Ask To See Governing Documents
Governing documents are the rules and regulations that govern the operation of an HOA. These documents are crucial to understanding the expectations and restrictions of living in the community. Before purchasing a home in an HOA, ask the real estate agent or seller to provide you with a copy of the governing documents. These documents typically include the Declaration of Covenants, Conditions, and Restrictions (CC&Rs), bylaws, and Articles of Incorporation.
The CC&Rs outline the basic regulations that govern the neighborhood and common areas. This document includes information on things like architectural guidelines, pet policies, and parking restrictions. The bylaws dictate how the HOA is run and include information on the roles and responsibilities of board members, elections, and meetings. The rules and regulations provide more specific guidelines for living in the community, such as noise and trash policies.
Know Your Monthly Fees
One of the main reasons people hesitate to buy a home in an HOA is the monthly fees. It’s essential to research these fees thoroughly to understand what they cover and if they are within your budget. HOA fees usually cover expenses associated with maintaining the common areas, amenities, and reserves for future repairs or improvements.
In addition to the fees, make sure to ask if there are any other assessments or special fees that may be charged in the future. These costs may include one-time special assessments for large repairs or improvements or regular assessments for ongoing projects. It’s also crucial to understand how the HOA handles increases in fees. Do they have a set timeline for increases, or can they raise fees at any time? Knowing this information can help you plan and budget for the future.
Investigate the HOA’s Finances
When buying a home in an HOA, you are essentially becoming a part-owner of the community’s assets. Therefore, it’s essential to investigate the HOA’s financial health. Ask for a copy of the HOA’s reserve study to get an idea of their current savings and expected future expenses.
Reviewing these financials will give you an understanding of how the HOA is managing its funds and if they have any financial red flags. Look for things like excessive spending, a lack of reserves, or outstanding debts. It’s also essential to check if there is a professional HOA management company overseeing the community’s financials. This can provide reassurance that the funds are being handled appropriately.
Research the Community
Living in an HOA means living in a community with shared spaces, amenities, and regulations. It’s crucial to get to know the community and its members before buying a home. Attend an HOA meeting or reach out to the board members to ask questions and get a feel for the community’s atmosphere.
You can also ask the real estate agent to provide you with a list of community events and activities to get a better understanding of the neighborhood’s culture. If possible, take a walk through the community to observe the common areas and how the residents maintain their homes. This will give you an idea of the community’s overall aesthetic and how you may fit in.
Understand Their Community Management
The management of an HOA is crucial to its operation, so it’s essential to understand who manages the community and how it operates. Ask questions about the HOA’s management structure and if they have a professional community association management company overseeing their operations.
A professional HOA management company like The Management Trust can help handle day-to-day tasks, ensure the community is running smoothly, and provide financial and administrative support to the HOA board. Professional community management services can also help maintain property values and ensure the community is a desirable place to live.
If you want a community management partner that will impress potential residents and boost your HOA’s success, look no further than The Management Trust. We’ve been an industry leader for over 30 years, with more than 1,500 communities served nationwide. To learn more about our full range of community management services for HOAs, contact The Management Trust online today.
