Is your dream home in your dream neighborhood?
This is an important question you should ask yourself before you invest. While it can be easy to get caught up in the excitement of buying a new home, learning more about the neighborhood’s Home Owners Association could make you think twice about where you’re looking.
When asked what people should consider when investigating HOAs (for a single family home, condo, or townhome), Patrick Finney of FINN Real Estate provided some valuable tips.
1. Look into the financial solvency of the HOA.
How many months of financials are escrowed for major repairs down the road?
2. Ask if there are any special assessments known about the property.
“A special assessment is when there is a major repair required, such as stairs in a condo complex,” explains Patrick. “The average HOA fee will not cover that expense so the HOA will charge an extra fee on top of the monthly cost of the HOA.”
Note: It is not desirable nor does it help to market your home for sale when there are special assessments. So, be aware of them and ask up front. Also, if the building has a history of these special assessments, you might wonder how the HOA is handling their finances.
3. Think about the age of the neighborhood.
Typically, the older the HOA neighborhood, the higher the HOA cost. This is because as properties age, there are simply more things to fix and, therefore, take more money fix them.
4. Do you even WANT an HOA?
You should be also ask yourself questions about the kind of HOA you want as a homeowner…or even if you want one at all.
“If you want to paint your home any color you want or have a recreational vehicle parked in front of your home permanently, then living in a neighborhood with an HOA might not be for you,” says Patrick Finney. “Also keep in mind that they’re typically strict about landscaping and keeping up your property and you will get fined if you don’t adhere to their standards.”
Communication is key.
As you move forward with the home-buying process, it’s important that you and your Realtor are on the same page. Communicate with your real estate professional about the things that you’re looking for in a neighborhood. It will save you a lot of time as you search for a home and you will be happier with the outcome!
Patrick Finney is the owner and managing broker of FINN Real Estate in Denver, Colorado. He has been named a Five Star Agent by 5280 Magazine and has over 13 years of industry experience with $240,000,000 of real estate sold. He is an active supporter of many non-profits, including the National Multiple Sclerosis Society and the Leukemia & Lymphoma Society.