Are you a first-time homebuyer? Considering joining an HOA? Here's what you should ask the association before buying.
The home purchasing process gives you a lot to think about, especially if it's your very first time buying property. Not only do you have to consider price, neighborhood, the state of the property, and amenities, but many homes are part of a homeowners' association (HOA) with its own set of rules and requirements you must follow.
Before you complete the deal, make sure you fully vet the HOA you'll be joining. You must be sure that your own goals and values align with those of the HOA, otherwise disputes may arise in the future when you can't comply.
The top eight questions to ask the HOA as a first-time homebuyer include:
- What are the fees and payment terms?
- What about assessments?
- What is the delinquency rate?
- How would you describe the community?
- How is maintenance handled?
- What rules does the HOA enforce?
- Can I see the governing documents before deciding?
Let's dive into each of these questions and why they're so important in your decision-making process.
1. What are the fees and payment terms?
First and probably most importantly, you have to know what membership fees you'll have to pay and when they're due. It's crucial that you figure in the monthly HOA costs alongside your mortgage payment to ensure you can afford everything comfortably. Weigh the extra costs against the benefits of being part of the community.
2. What about assessments?
Assessments are special fees that HOA members have to pay to cover costs that arise for maintenance or repairs in the community. These unexpected fees can surprise first-time homebuyers. Understanding the HOA's process for handling them, as well as if they are planning any assessments in the near future, is a must before buying.
3. What is the delinquency rate?
An HOA's delinquency rate is the percentage of members who aren't paying their membership dues on time. Banks are often slow to approve mortgages if an HOA has a high delinquency rate, so it's important to find out how high the HOA's number is right away.
4. How would you describe the community?
It's also important to know how you'll fit into your new HOA community. Find out details like how involved members are in the decision-making process and how you will be communicating with the HOA board. What are the community's values? What is it like to live there? What are some of the challenges or advantages of this particular HOA? Try to grasp if you see yourself succeeding in a community like this one.
5. How is maintenance handled?
Any homeowner has to cover certain maintenance and repair costs of their home. But ask about the HOA's insurance policy regarding repairs and what it covers. Does the HOA have a reserve fund for costs that may come up with shared community spaces? How much does the average member pay themselves for maintenance and repairs?
6. What rules does the HOA enforce?
Each HOA has its own list of rules and regulations that members must follow to live in the community. These range from pet restrictions to lawn and appearance rules, parking guidelines, rental rules, trash procedures, noise restrictions, and more. Find out what rules the HOA enforces so you know you can comply and that the HOA is a good fit for you.
7. Can I see the governing documents before deciding?
HOAs are governed by their bylaws, articles of incorporation, and the Declaration of Covenants, Conditions, and Restrictions (CC&Rs). Before you buy, ask the HOA if you can take a look at these documents so you know what all the rules and regulations are. Your agent can often get these documents for you, or you can ask the HOA directly. The governing documents tell you pretty much everything you need to know about how the community operates.
8. Get help from a real estate attorney
Still have questions about joining an HOA? Buying a house for the first time can be overwhelming and confusing, especially when you're not sure what to look for in the association's governing documents. That's why working with a real estate attorney can help ensure you can comply with all rules and regulations, and that there's nothing you're missing in the fine print.
Contact the team at PeytonBolin to get started with a free legal phone consultation. We'll help you get through the homebuying process with your goals and best interests in mind.