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HOA’s: Why they exist

Many communities like: condos, townhouses, single family homes in a planned community, have an HOA. HOA stands for Homeowners Association. Typically they manage and insure a clean community. They can dictate the; type of vehicle parked in your driveway, the color of your shutters, your yard work designs, and much more. Here are a few questions you may want to ask your HOA before you close to ensure a community with HOA guidelines is for you.

  • What are HOA fees and what do they do? 

An HOA fee is paid for by all homes inside of the planned development. The fees will range with different properties. Some reports have found that the higher the HOA fee, there are more home/units in the development. Also they would increase based on the amenities offered in the community such as: gates, pool with clubhouse, golf courses. The purpose of the fees is to help cover any work that the common areas may need, any amenity shared area, and community exteriors. Those pretty neighborhood signs with all the lovely floral arrangements, HOA fee pays for.

  • What do HOA fees do for me?

When you enter a HOA managed community, you are also subjected to the list of rules and restrictions that the HOA have in place. You may live in a place with valet garbage, that would be a fee in your HOA. Community access gate needs repairs? Your HOA helps with that. They also pay in for the perks that are offered to you based on what amenities your community has. Keeps the pool clean, tennis court in shape and the playground safe. If you don’t mind living with certain rules and guidelines, an HOA may be right for you.

  • How often do I pay an HOA fee?
Really that depends on the community. Some could be monthly, quarterly and even annually. It is important you keep in mind when that payment is however, so that you can account in your monthly expenses with no surprises. There are several websites with mortgage calculators that you can play with what kind of HOA you could afford on top of your mortgage payment and other monthly fees.
  • How important is it that I follow the rules?
IMPORTANT. HOAs can fine or sue for infractions on the guidelines. Some can even go as far as placing a lien on your home for multiple infractions. Ask your agent to acquire them for you prior to the purchase of your home so that you are familiar with what is and isn’t allowed. Also make sure you have the most up to date version of the HOA guidelines. If it says do not park your DeLorean on the street, it may be out of date (or you may just still be awesome.)
Basically what it all comes down to is that HOAs can hurt or help. It all depends on are you able to see yourself living with the set of rules and regulations that are in place in your new potential planned development. It may mean less work for you if your HOA covers yard work but it also may mean more struggle because you can’t have your RV in your driveway. An up-kept neighborhood is always good when trying to sell your home however the guidelines may be too restrictive for your prospective buyer. It’s a hit or miss for most people but always a decision that is ultimately yours to make.

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