For everybody out there looking at homes right now, there are three small letters that may make or break your purchase decision. They are”H,””O” and”A.” Three of the most frightening letters of the alphabet, enforced over the largest purchase you will ever make — it is a recipe for high anxiety.
But not every Homeowners Association is the nightmare that many home buyers imagine. As long as you do your homework and know exactly what you’re getting in, your HOA may be the best decision you ever made.
Homeowners Associations, Maintenance and Uniformity
HOAs are often part of life for condo, townhouse and some single family homeowners. They’re not all good and they’re not all bad. Their purpose in this modern world is to maintain a sort of uniformity and authority that can not just help neighbors deal with disputes, but help the area as a whole maintain a nice, shiny reputation.
When it comes to attached homes, such as condos and townhouses, the HOAs also maintain the exteriors of buildings, including roofing, and common areas, like lawns. Single family HOAs often provide amenities such as pools and frequent buildings that can be used for parties. The more the HOA does, the greater the fees will be. And sometimes there will be fees even if they don’t do much.
Homeowners Associations Versus Neighborhood Associations
Another thing to clarify is that there is a difference between a neighborhood association and a homeowners association. Neighborhood associations are voluntary, generally have very low fees for membership and do not run with the land.
That means that you can buy a house where the former owner was part of the neighborhood association, but decrease to be a member yourself.
On the other hand, if you buy a home that’s part of a homeowners association, the covenants, conditions and limitations (CC&Rs) run with the land itself. So, you purchase the land (usually with a house on it) and at closing indication that you agree on the HOA’s rules.
You can only change people by becoming an active part of the association itself and moving through the procedure it takes to allow RV parking at the front yard or whatever it is that you really want to do.
Is an HOA For You?
It is really hard to know if you’re likely to get along within an HOA-controlled neighborhood without taking a long hard look at these CC&Rs. They vary widely, just like the people that reside in different neighborhoods. Even if you find a home that you absolutely adore, don’t sign a thing until you’ve seen the CC&Rs and gone over them with your real estate agent. You’ll be living under these rules for a while, make sure that you can accept that.
While it would be fun to have a pool that you don’t have to clean, sometimes you have to be realistic and say,”These principles just aren’t for me or my lifestyle.”
But, sometimes those principles are really practical and make a good deal of sense. For example, some might state that your grass has to be stored under six inches . Great rule, this practice reduces animal and pest problems by removing cover.
Others might say that you can’t have a clothesline or a fence, which might be a total deal-breaker for you. There is often an appeal procedure, but if that clothesline is a large enough issue, don’t risk it. There are loads of houses in the sea.
Don’t Forget, HOA Fees Are Included On Your DTI
Last, but not least, remember that HOA fees will be included on your debt to income calculation. So, if you are just barely able to afford that beautiful home, the monthly fees may make your lender give you the red light. This is an important item to check when you’re investigating the other terms of the HOA.
You can expect them to operate anywhere from a few hundred to over a thousand dollars a month. Definitely something you want to be certain about before committing. Would you rather have that much more in home, or in amenities?