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Understanding Your Options

If you’re ready to start looking for a new house and you find one in a Homeowners Association here are some things you should know. You’ll need to get familiar with what it means to live in an HOA, and then you’ll need to understand the guidelines behind buying into an HOA. You might find that living in an HOA isn’t right for you or you might decide that living in an HOA is exactly what you and your family want!

If you’ve decided that you can’t pass up your dream house opportunity, then this handy guide should be your first stop before you begin your home purchase. In an HOA you have to pay the required fees in exchange for impeccable lawn care and possibly a community pool. In this article, we’ll break down what you can expect when buying into an HOA, and the HOA process behind buying your new home.

What to Expect From Your HOA

If you’re shopping for a new home, then you already know there’s a major list of options to consider. From location and size to style and amenities– the list can quite literally go on forever for certain eager home buyers. For some people, living in a homeowner’s association can be a dream come true: a board looks after the community to ensure it functions smoothly, they keep your neighborhood in tip-top shape, and provide opportunities for involvement around the neighborhood.

These fees will essentially become a part of the closing cost of your home. It is important to note that HOA fees can vary greatly, and typically the more the HOA requires you to pay, the more involved they are in the upkeep of your home and community. These fees are not optional, you should get a clear understanding with the HOA upon your home purchase how easy it is for the board to increase their fees and how often they increase them.

In exchange for this kind of care, however, you must be prepared to follow the guidelines created by the board. In addition to these rules, you’ll also be expected to pay the necessary dues the board requires of every member in the association. The first point is that if you’re set on buying a home in an HOA, then it is likely mandatory to join the association. Upon the successful purchase of your home, your HOA might expect you to pay upfront member fees before the move in. These upfront fees are usually adjusted between the seller and the buyer, like taxes, water, or oil would be in a standard transaction.”

Your Responsibilities as a New Homeowner in an HOA

The first and most important responsibility as a potential homeowner or an official homeowner is to ask questions! Before you make the decision to buy into an HOA, you should already know the answers about your monthly fees, who is on the board, and how well funded the financial reserve account is. In regard to the reserve account, every HOA has one and it’s the main source of funding they use in order to ensure the neighborhood is being taken care of to the standards outlined in the HOA’s Covenants, Conditions, and Restrictions.

It’s your job as a new homeowner to understand your HOA’s financial reserve account as it’s funded by you and the other members’ money! Homeowners living in a large association should review their “reserve study” which is an in-depth report on how much money the association should consistently have funded in their account. As smaller HOA’S don’t typically conduct official reserve studies, it will be your responsibility as a homeowner to ask for the HOA’s monthly meeting notes and accounting documents (don’t worry–this is one of your rights as a member) to verify that the reserve is well maintained and that your HOA is financially healthy.

Finally, it’s on you as a homeowner to learn about what your HOA will cover in terms of home, yard, and neighborhood maintenance. Let’s say your roof starts to leak and you quickly call up a roofer to fix the problem for a hefty fee. It’s very likely your HOA might cover the cost of some of these issues (it’s why you opted to be a part of one, after all) to make it a duty to get a clear list of HOA services offered to you as a new homeowner in the neighborhood. Often times, if you’re living in a quality HOA, members of the board will welcome you into the neighborhood with a helpful guide about the HOA, but as this isn’t always the case, it’s crucial to know what your HOA fees are getting you as a new member.

Ask Questions and Get Help!

It’s easy to feel overwhelmed when buying a new home whether or not you’re preparing to be a part of an HOA. The good news is, if you’ve opted to live in one, board members on the HOA are here to help you get acquainted with the rules and expectations of your new HOA. Asking questions before and after the purchase of your home will make for a smoother transition into your new neighborhood. Don’t hesitate to ask for help from the board and from neighbors who have walked this road before you.

If you originally had dreams of lounging by an impeccably cared for pool and owning a healthy green lawn but your HOA isn’t actually all that it was cracked up to be, it’s important to remember that you can always run for the board to see the change and improvement you want in your neighborhood! After you’ve been a homeowner in the HOA for some time, you’ll be eligible to run for the board. If there are rules you want changed or ideas to be enacted upon, take it into your own hands to make your HOA better.