How to Quality-Check Your Future HOA Before Purchasing a New Home
A homeowner’s worst nightmare goes something like this: You’ve just bought your dream home in a deed restricted community. Because you’re such a diligent person, you immediately call the HOA to make sure you are compliant with your community’s regulations. Huh… they don’t answer. Oh well, it’s a busy time of year, and you’re sure they’ve got lots of important things to take care of. You check your trash can and it looks just like your neighbor’s. Your lawn looks great… you just mowed it.
The next morning, you try calling again. Still no answer. No one has responded to your email yet either. You’re a bit concerned, but you don’t want to be rude so you decide to try again next week. It isn’t long afterwards that you receive a letter in the mail. It reads, “This is a courtesy notice from your property manager that your vehicle is not registered in our database. Please contact us immediately to remedy the situation and avoid towing.”
Now you’re getting annoyed. You call again and, as predicted, no one answers. The next morning, you head outside to your designated parking space, and… you guessed it: Your car is gone.
Over the next several years, you continuously fight the same battle. The HOA doesn’t give you the time of day (unless it’s to collect your fee). The community pool is filthy, the streets have pot holes, and the shared grassy areas are unmaintained. You wonder why none of your neighbors care enough to show up to a meeting and vote for a change… until you realize that they’re all either snowbirds or renters. Enough is enough. You throw your hands into the air and declare, “That’s it! I’m selling!”
Selling Can Be Tricky if Your Community Management Has a Bad Reputation
Believe it or not, your HOA has a tremendous impact on the value of your home. And we’re not just talking about sustained value enforced by proper upkeep. Savvy buyers in today’s real estate market know to check online reviews regarding their potential future HOA. In fact, they often do so before they even go to look at a house!
If you are a home buyer, we recommend a few strategies for checking up on a community’s HOA before committing to live under its management.
Obtain a Copy of the Community’s Rules and Regulations
We suggest doing this very early in the process. If one of the community’s rules is a non-negotiable for you (such as potential vehicle restrictions), you’ll save a lot of time by reading the by-laws before visiting a home.
Talk with the Neighbors
Not every rumor will hold value, but a quick chat with other residents can often reveal hidden concerns. Try to learn what percentage of the residents are owners vs. renters. Usually, only owners will have a say in neighborhood government. If the owners don’t actually live in the community, they might not care about its management as much as you will. Ask about the neighborhood’s lawn maintenance schedule. And don’t forget to ask who the point of contact is for the HOA.
Call the HOA
Do the phone test. If they pick up, displaying professionalism and a friendly demeanor, they pass! If the voice on the other end of the call is rude, think twice. If ever you become a seller, your future buyers will be doing the exact same thing!
Check Social Media and Online Reviews
Is the management office active? Do they have projects planned? Maintenance scheduled? Don’t forget to check the reviews and confirm that others have had positive dealings with them.
Check on the HOA’s Finances and Insurance
This is essential, especially if you are considering a condo purchase. Make sure that the HOA’s reserves are fully funded and that they have a financial plan for emergencies. You’ll also want to ensure that the HOA can explain in detail how your fees will be allotted. Be sure to check on all of the HOA’s insurance policies. Is the coverage sufficient? If any of the budget’s line items appear to be underfunded, or if you’re concerned about the adequacy of the insurance policies, beware of rising fees down the road.
A well-managed HOA is a wonderful thing! Let us know what your tips are for checking on a community’s association before buying. For more tips like these, subscribe to our Youtube Channel and follow the Dalton Wade Blog!