Buying a Home in an HOA: What You Need To Know
Buying a new home can be an exciting time, especially buying a new construction home. But knowing what and where you are buying that new home is important as well. And if you're buying a home in an HOA, it's important to be prepared. Knowing what an HOA is, how it can affect the home buying experience, and what you can do to prepare for homeownership in an HOA is important. If you're thinking about buying a home in an HOA, here's what you need to know.
What Is An HOA?
An HOA, also known as a Homeowners Association, is an organized body made up of homeowners within a neighborhood. The HOA collects dues from homeowners and enforces rules that maintains quality of life for homeowners within that HOA. Often, the HOA also maintains public spaces within the community, like a playground, swimming pool and gates to the community. The HOA may also provide services to the homeowners, like a security guard or a grounds maintenance person.
How Is Buying a Home in an HOA Different?
Buying a home in an HOA may require the buyer to go through an approval process. The HOA must review an application from the buyer, and may even have the buyer to go through an interview process. Usually this interview process is designed to ensure that the buyer understands the HOA rules and is prepared to follow to those rules. However, when buying an existing home in an HOA, the homeowner usually becomes a member of the HOA simply by purchasing the property.
How Can You Prepare to Buy a Home In An HOA?
Buyers who are thinking about buying a home in an HOA should first familiarize themselves with the HOA's rules, policies and fees. HOAs typically require homeowners in the neighborhood to pay a monthly fee. These fees are usually in the $100 to $1000 per month range, though they can be more or less depending on the area where the home is located, the size of the housing development, the type of services provided and other factors.
If the home buyer cannot afford these monthly fees, then they should probably look for a home in a lower price range, or in a different development. Knowing the HOA rules can also be helpful because the buyer will be expected to live by those rules, when the purchase is finalized. Typical HOA rules may control street parking practices, noise levels, what kind of outside paint the owner is allowed to have, and whether pets are allowed in the development.
Long Beach home buyers who cannot abide by these rules may face regular fees, and could even lose their home. Knowing the rules in advance of trying to buy the house prevents the home buyer from wasting their time and the time of the people in the homeowners association. Finally, it's helpful to know what kind of information the HOA will ask for in the interview. Sometimes this can be determined by talking to the HOA in advance of the interview. A good real estate agent can also coach the home buyer on what they can expect during the interview.
What to Expect After the Purchase Is Final
When the purchase is final, the home buyer should commit the HOA rules to memory. This helps ensure that the homeowner can avoid breaking the rules. Following the rules as laid out by the HOA can help ensure a positive relationship between the homeowner and HOA.
If you're a home buyer who is thinking about purchasing a home that falls within an HOA, work with an experienced real estate professional. Your real estate agent can answer your questions and get information for you about the HOA fees and rules.