Everything You Need to Know about HOAs
As we all know, many fees come up when purchasing a new home. One that you might not think of? A homeowner association (HOA) fee. For some, an HOA fee seems pointless and unnecessary, but when you learn about what you get out of an HOA, you may change your mind. Keep reading our latest blog to learn all you need to know about an HOA for your next home.
What is an HOA and what does it do?
In general, HOAs are governing groups founded within communities like planned or gated neighborhoods, apartments and condominium buildings. These groups are run and funded by residents and include a board of directors. The board organizes regular meetings, establishes and maintains a budget and enforces the community’s rules and regulations. One thing to keep in mind – those rules set by the HOA are binding and legally enforceable, so read all documents provided regarding the HOA before deciding to buy your house.
How Much Will an HOA Cost?
On average, members of an HOA are required to pay monthly fees, but depending on the structure of your HOA, you could be required to pay on a quarterly or yearly basis instead. According to Realtor.com, an average single-family home can cost between $200-$300 per month for an HOA. However, depending on the size of your home, the area you're located, and the services provided. these fees could be much higher or lower.
In case you were wondering where your money goes everything month, HOA fees are typically divided into two parts: one portion goes to monthly expenses for upkeep and the other half goes toward a reserve fund. This reserve fund serves as a safety net for emergency expenses that arise when natural disasters or vandals strike – or even for your regular wear and tear.
Benefits of an HOA
Each HOA has its own set of covenants, conditions, and restrictions (CC&Rs), which explain what homeowners can and cannot do – including the appearance of each property. For example, your neighbor won’t be able to paint their house bright pink or put an ugly addition on the front with these guidelines set in place. Because of CC&Rs, the community can retain the look and feel of the way it was built and intended.
Helping Homes Retain Value
"'Ultimately, the HOA helps the homes within the neighborhood retain their value. When there are rules and guidelines governing how homeowners should keep their property's appearance, it helps keep the neighborhood looking desirable for the consumers perusing the neighborhood in search of a new home.'" – Realtor.com
Mediate Problems in the Neighborhood
If you or your neighbor have an issue with each other, an HOA can be a great partner to have to help reduce conflicts and unpleasant exchanges. For example, if your neighbors haven’t cut their lawn in several weeks or start to keep old rusted out cars in their driveway, the HOA will be the one to confront them instead of you having to. All in all, when anyone is engaged in an activity that violates the CC&Rs, the HOA will take on the role to send a friendly notice and then follow up with a stern warning. No need for you to get your hands dirty with neighborhood drama.
Disadvantages of an HOA
If you’re looking to buy a home, HOA fees could be something that makes you take pause. If you move into an area that has an HOA, membership is mandatory and so are the monthly or annual fees that come with it. Additionally, the fees that come from an HOA are subject to change based on decisions that you don’t have total control over.
Any exterior alterations to your home, even something as minor as a play place for your kids, must be approved by the HOA. So, before you take a sledgehammer to that wall, be sure to carefully read over your HOA's guidelines and put in a formal request for your project to be approved.
As beneficial as those CC&Rs can be when your neighbors are being not-so-neighborly, but they could also be off-putting for some homeowners who like their independence. HOA mandated restrictions for your home can be set on anything ranging from swimming pools, pet breeds, and rental intentions.
“Many folks believe that buying your own home should give you the freedom to make the changes you want to make and express your own individuality,” Golden explains. “They don't want decisions about their own home made by a committee.” – Realtor.com
Overall, it’s important to keep in mind that HOAs don't have the goal of meddling in your business, they are merely there to maintain the neighborhood aesthetic and comradery. When you're ready to buy your next home or sell your current one, Points West Agency is here to help! Contact us today to get the process started.