When it comes to purchasing a new home or condo, one factor that many potential homeowners overlook or misunderstand is the Homeowners Association (HOA) and the fees, rules, limitations, and benefits of purchasing property within an HOA. Homeowners Associations are designed so that the combined homeowners in a neighborhood or building all contribute money in order to provide funding for the upkeep and management of the community. Fees are often paid monthly or yearly on top of your mortgage and insurance payments, so it’s definitely an element that you need to factor in when budgeting for your new home.

HOAs have a lot of advantages and disadvantages, and it’s up to you, as the homeowner, to decide if the pros outweigh the cons. We’re going to break down the pros and cons of HOAs so that you can make a more informed decision about whether buying a home with an HOA is the right decision for you.

Increases property value by making the neighborhood look better
The old idiom “don’t judge a book by its cover” definitely doesn’t apply to real estate. Everyone judges homes by the neighborhoods and cities in which their set, so if your neighborhood is pleasing to the eye, your home is considered much more desirable as a result. HOAs help keep your neighborhood maintained and looking pleasant, so you as a homeowner often benefit with steady increases in property value.

Handles Neighbor Disputes
You hope it never happens to you, but inevitably at some point in your life, you’re likely to have an issue with one of your neighbors. Maybe they play their music too loud, or their dog always goes to the bathroom in your yard and they don’t clean it up. The cause of the dispute is irrelevant, but coming to some kind of resolution is easier if you have someone to mediate. The HOA board is a 3rd party mediator that can help settle certain non-criminal grievances between neighbors.

Access to shared amenities
Many neighborhoods with HOAs tend to share common spaces that everyone is welcome to use. These typically include parks, pools, clubhouses, fishing ponds, tennis courts, security gates, and fitness centers to name a few. The HOA makes having access to and maintenance of those amenities a lot easier than if you tried to do so on your own as an individual homeowner. People often don’t realize the amount of upkeep that goes into something like a pool or park, and it’s much less of a burden to share the responsibility with your neighbors than to try to go at it alone.

Everyone is in it together
HOAs are often a true community-building body. Everyone is under the same rules; as such, part of the HOA’s job is to make sure everyone in the neighborhood benefits from the HOA’s presence. In a way, everyone is sort of forced to pull their own weight in an HOA, because they are all bound by the same set of rules and regulations.

HOA Dues are another cost you must include in your budget
HOA dues vary by neighborhood and are often paid monthly (or annually, in some cases), in addition to your mortgage and insurance of homeowners. When you’re looking at the cost of a new home, be sure to calculate your monthly payment with the HOA fees included to determine a realistic picture of the cost of living. Failure to pay your HOA fees can result in having a lien placed on your home or having your home foreclosed, even if you’ve kept up with your mortgage payments.

You have to live by a pre-set list of rules
HOAs often have a set of predetermined rules for the neighborhood that you have to follow. They can be as simple as making sure all lawns are mowed on a regular basis, or as nitpicky as what color your blinds have to be or whether or not you can park your car on the street. As a member of an HOA, you have the option to petition changes or add new rules, but there is no a guarantee that your ideas will be implemented. Take a look at the HOA regulations of your particular property and decide whether you’re willing to live within those rules for the duration of owning your property.

The HOA’s problems become your problems, too
If your HOA becomes involved in any legal battles or is facing budgetary issues, the financial burden of such events will be passed onto you as a homeowner. These legal disputes can lead to lowering your home’s property value, making it more difficult for you to obtain a loan in the future, or causing a huge spike in your HOA fees in the future. Similarly, if a member of the HOA board decides to take certain matters into his or her own hands, such as hiring a new landscaping service, or ignoring any of the HOA rules when it comes to his or her own property, the process to remove that person from the HOA board can be an expensive and extremely difficult. 

You have to consult the HOA before making certain changes to your home
Want to build a treehouse in the back for your kids? Need to park your new boat in the driveway? Trying to cut down a tree in your yard that is diseased? Before you make any drastic changes to your home--like changing the paint color, adding a new porch, or fencing in your yard--your HOA will likely require approval or be able to govern the choices you make for your own property. The rules and approval process is already written out in the HOA’s regulation document, so be sure to read the literature closely and ask any questions before you decide to purchase your property.

If you have concerns or questions about particular HOA rules or need helping deciding if an HOA is right for you, our skilled real estate agents are here to help!

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