Is a Homeowners’ Associations: Good or Bad Thing?
Sometimes, it seems as though there are so many stories out there about homeowners’ associations (HOA) doing nutty things that you wonder why anyone would want to live in an HOA-controlled community. Some people feel they should be able to paint their homes whatever color they want without interference from a grumpy HOA board comprised of people with nothing else to do.
More and more neighborhoods are controlled by HOAs (condo communities have COAs), so it’s important for buyers to understand what they’re getting into when they move into one of these communities. Those Covenants, Conditions, and Restrictions (C C&Rs) are actually exceptions on the deed and run virtually in perpetuity, and when you close your sale, you’re agreeing to their terms whether you read and agree to them or not.
How an HOA Impacts A Home Loan
When your lender underwrites your loan, the monthly HOA dues are included in the ratios calculating how high of a loan you qualify for. The dues you have to pay actually reduce the upper limit of your loan eligibility.
On the other hand, the monthly dues don’t just go into a black hole somewhere. They pay for the short-, medium-, and long-term maintenance of the grounds, making them more attractive and desirable. If the community has such features as a golf course, fitness center, pocket parks, or swimming pools, so much the better, as these add value to the homes in the community.
HOA Dues Protect Community Values
The monthly dues are as much a savings account as they are a fee. If the community is professionally-managed, a good part of the fee pays for the manager, but the rest pays for such expenses as the monthly water and other bills, for the periodic trim and replacement of landscaping and infrastructure, and the re-surfacing of the pool and tennis courts. How much better is it to save for these over time than to assess owners all at once?
Buyers have a choice as to whether or not they wish to live in a community with a HOA. These are just some of the considerations.
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Contact me with any HOA or other questions about the homes you see. I can be reached at (602) 558-3843 via text or call and by email at firstname.lastname@example.org