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To HOA Or Not To HOA
HOA's - Homeowner's Associations - can be a fickle topic as I help my buyer clients search for their new home. There are 2 sides to every coin - and certainly a third if the coin lands on it's side that 1% of the time. It is very important to understand the pro's, con's and costs of living (or not living) in an HOA. Here are a few key points to consider as you think through if living in an HOA is for you...or not!
Living in an HOA:
- Expect limitations with exterior designing. AKA: fence and pool allowances and door and shutter color. There will be architectural guidelines that help keep the neighborhood to a specific aesthetic.
- HOA neighborhoods have dues. Why? There is a cost of maintaining the neighborhood and its amenities. Dues may cover the pool, tennis courts, walking trails, common grounds, trash pick up, snow removal etc. Each neighborhood is different, so the amount of dues will be different from neighborhood to neighborhood and also depend on what kind of dwelling (townhouses may pay less than the single families).
- HOA dues are not apart of your monthly mortgage payments. Dues are paid separately and usually monthly - but sometimes quarterly or annually. It is completely possible that because the house you want to make an offer on has an extravagant HOA due - that you may not qualify for the mortgage. Be aware of this when looking at HOA properties. You may not be able to afford that specific house with the HOA dues added on.
- HOA neighborhoods typically have meetings where the community can attend and vote on spending (maybe the neighborhood needs a new swing set...etc), and have open discussions about neighborhood activities. I always recommend going to your HOA meetings at least annually to get a feel for what your community is up to, and how they are spending your dues.
- There will be rules! Some neighborhoods have very strict rules for keeping your trash can out of site, Halloween and Christmas decoration protocol, parking, and landscaping. Just be sure you understand the rules before you get cited with a fine! Although, it is nice to have some order to a community!
- Enjoy the amenities - you pay for them! It is great to have a neighborhood pool, basketball courts, a workout facility, etc for everyone to enjoy.
Living with no HOA:
Paint that door bright yellow, with pink polka dots! Simply put: There is more freedom, but less order and amenities. You can pretty much do as you please within reason of your neighbors not yelling at you! Sounds nice, but it is also important to consider order and amenities vs "this is my property, I do as I please" mentality. That is a personal preference.
Note: Living out of city limits, you may have to pay for your own trash pick up service. That usually runs about $50-75 per quarter. One could argue the cost of living outside and HOA and living in an HOA are similar in cost - but there are too many factors that could disprove that, and certainly that would depend on the neighborhood.
Point and case - here is a link that will take you to a lovely PINK house in Austin Tx. This homeowner decided that he did not want to live in an HOA so could paint his entire house PINK. LOL! Trust me, it's worth a look! It made the local news!
Another can of worms is if you living in a condo within a HOA community. Condo fees take care of the exterior of the condo building. HOA fees pay for the neighborhood amenities and upkeep. Beware - condo's are seemingly affordable until you look at the combined HOA and Condo Dues. They can be pretty pricey here in Frederick from around $250-500/month. That condo listed at $180k could easily surpass your budget with the fees added on at the end.
Whether you are looking to buy into an HOA neighborhood, or not - both certainly have great benefits and some drawbacks depending on your personal preference! There is always some soul searching as you buy your biggest asset - and this is not something to overlook as you house hunt!
Written by Kat Royer
Welcome Home Realty Group
Kat Royer is a graduate of Virginia Tech with a Bachelor’s degree in Hospitality and Tourism Management and minor in Real Estate. She worked for 7 years in operations and sales for a major internat....
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