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Why do HOA fees differ?

By
Real Estate Broker/Owner with House to Home, Inc. - Denver Real Estate - 720-231-6373 DRE# ER40011786

Why do HOA fees differ?

Townhomes

Why do HOA fees differ so much between complexes?    Multi-family buildings include a few items in their monthly fee such as water/sewer, trash, snow removal, grounds maintenance of common areas, exterior building maintenance with roof and insurance of the exterior building.    Some don't pay for water/sewer and some do not pay for exterior building with roof.    Some complexes have amenities lika pool and clubhouse with fitness center. 

 

Each complex has a Board of Directors that reviews the budget.   This is when they review contracts with vendors who do the snow removal and also the maintenance of the grass/sprinkler systems.      When there have been many storms that produced hail or tornadoes and roofs had to be replaced/repaired, these fees are factored into the monthly fee.    To keep a complex in good condition, the buildings must be painted every few years, parking lots need to be repaired which will be factored into this fee.

Condo buldings

As buildings age, the fees increase to maintain older buildings.    As elevators age, these are expensive to repair/replace, as well as a boiler and the duct work or plumbing the building may be responsible for.  

 

If you are contemplating purchasing in a multi-family complex, review the budget.     There are many documents you have the right to review to include the budget.   I would encourage new buyers to get involved in their HOA, go to the meetings and know what rules are being reviewed, and what issues are being discussed.

High-Rose Buildings

 

When you have major repairs needed that are not in the annual budget (such as roof replacements) you will see special assessments included in the monthly fee.     These are generally only assessed for a one year period.

Low rise condo buildings

 

You will see HOA fees ranging from $150-$600 (approximately) for multi-family complexes, and newer housing developments have HOA fees that include only grounds maintenance for common areas and trash removal for single detached family homes.

 

When looking for a multi-family unit, you have choices between townhomes, low-rise condos and high-rise condos.

If you need more information by complex, please give me a call.

Posted by

Joan Cox
Broker/Owner, REALTOR®
House to Home, Inc.

Serving the Denver Metro area including all suburbs


Helping Buyers and Sellers achieve their real estate dreams, one house at a time!

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Comments(60)

Ron Aguilar
Gateway Mortgage Group - Saint George, UT
Mortgage & Real Estate Advisor since 1995

thanks for the post on HOA fees

Mar 06, 2013 10:21 PM
Jill Sackler
Charles Rutenberg Realty Inc. 516-575-7500 - Long Beach, NY
LI South Shore Real Estate - Broker Associate

This is a good and straightforward post explaining the different HOA fees. Lyn's comment #41 is really relevant. I was looking into purchasing a foreclosure that has monthly fees of 1,000 (very high) solely because of the grounds and the pool.

Mar 06, 2013 10:24 PM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

I showed one loft downtown with over 400 units, and the HOA fees were over $500 and many items throughout the building were old and needed replaced.   These items turn off a buyer very fast, even though the unit would have worked well for the buyer.

Mar 06, 2013 10:25 PM
Nancy Middleton
Counselor Realty, Inc. - Excelsior, MN
Nancy Middleton, Counselor Realty, Minnetonka, MN

Joan. I was listing agent in a brand new construction of 20 units by a high end builder with great quality. I bought a unit myself after figuring out what my own home costs were and adding those up against the association dues and found I was better off buying a unit with the pre-construction cost. I also ended up on the HOA Board right in the beginning and later on as well. Reading all the rules and regulations and condition of the complex, its age, type of HOA is an absolute must before anyone enters into living in a condo complex. We got a good management company and didn't have a lot of amenities.

I personally woud never live in a huge complex where you are more likely to end up with politics and people who didn't get involved except for complaining.

 Thanks, Joan for a good explanation of all the varieties and reasons for different HOA fees and the need to be educated right from the beginning before searching for HOA living.

Mar 06, 2013 10:53 PM
Hella Mitschke Rothwell
(831) 626-4000 - Honolulu, HI
Hawaii & California Real Estate Broker
Joan: Price of a unit is not the only thing to consider. Age of the building that needs maintenance is one that will become costlier in Hoa fees especially if unexpected.
Mar 06, 2013 11:49 PM
Donna Harris
Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com - Austin, TX
Realtor,Mediator,Ombudsman,Property Tax Arbitrator

There is a difference from complex to complex, and it's obnoxious trying to remember everything. I have a buyer right now comparing a complex that is only $89 a month to cover all exterior landscaping and watering, with another that is $220 a month that covers basic cable, water, sewer, and trash... It's going to be paid anyway, but do you want to do it on your own or within your HOA?

Mar 07, 2013 12:14 AM
Ric Mills
Keller Williams Southern Az - Tucson, AZ
Integrity, Honesty, and Vast Real Estate Knowledge

The HOA is run by the residences and they have to keep the financial status in the BLACK.  What residences forget is that the things they want done cost them all money and if they need the pool area redone, the parks redone, then the fees need to provide that money.  They are not a profit based entity but they can't function in the red.

Mar 07, 2013 12:40 AM
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

Joan, your post is an excellent explanation of HOA fees.  This is a great topic that few buyers understand.

Mar 07, 2013 01:46 AM
Scott W. Johnson
Marindependent Insurance Services LLC - Mill Valley, CA
Insurance Broker-Agent

well said

Mar 07, 2013 02:10 AM
MaryBeth Mills Muldowney
TradeWinds Realty Group LLC - Braintree, MA
Massachusetts Broker Owner

funny here in Massachusetts we refer to two plus homes which are usually rental units as "multi-families"  but I can certainly understand why a condo complex could be referred to in the same way.  Thank you for updating me on your area of the country's jargon.

Mar 07, 2013 04:38 AM
Roy Kelley
Retired - Gaithersburg, MD

This is very good information for prospective home buyers.  Our HOA has very strict architectural requirements.  Any physical changes must be approved in advance.

Mar 07, 2013 06:30 AM
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F

I am always really cautious with condos.  You can get burned big time if they do not have their budget in order and have to charge a special assessment.

Mar 07, 2013 07:12 AM
Christi Farrington
Dagny's Real Estate - Wilton, CT
~ Your representative in Fairfield County, CT

Very well said; thank you.  Also, the HOA fees may vary with the square footage of the unit.  Yes, join the assoiciation; be informed!

Mar 07, 2013 07:31 AM
Nick T Pappas
Assoc. Broker ABR, CRS, SFR, e-Pro, @Homes Realty Group, Broker/Providence Property Mgmnt, LLC Huntsville AL - Huntsville, AL
Madison & Huntsville Alabama Real Estate Resource
Joan, HOA's run the gamut here from about $100/year to around $3,200/year and what you get in return varies greatly.
Mar 07, 2013 11:55 AM
Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Flower Mound, TX
Selling Homes Changing Lives

Hi Joan,

Congratulations on another great post! HOA's are a mystery to many and you did an excellent job giving explanations that make sense.

Thanks again for all that you do to educate so many.

Mar 07, 2013 01:21 PM
EMILIA B COOPER, REALTOR® SFR.NCHSE.AHWD
LAROSA REALTY - Orlando, FL
Short Sales, Foreclosure & Bank Owned Real Estate

Joan, Great information about HOA!! I save it, excellent post, Thank you for sharing!

Mar 07, 2013 01:21 PM
Kimo Jarrett
Cyber Properties - Huntington Beach, CA
Pro Lifestyle Solutions

Lyn, #41 sums it best and I agree.

Mar 07, 2013 08:38 PM
Toni Weidman
Sailwinds Realty - Trinity, FL
20+ Years Selling Homes in New Port Richey, FL

Hi Joan, good post and I'm sure that's why it was featured. Congratulations.

Mar 07, 2013 11:39 PM
Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County

What a great idea for a blog post. I know that so many people were probably curious about this!

Mar 09, 2013 11:19 PM
Paddy Deighan MBA JD PhD
http://www.medicalandspaconsulting.com - Vail, CO
Paddy Deighan J.D. Ph.D

I can certainly understand why HOA fees differ...for all of the reasons that you suggest. My second home is a townhome in Colorado and the HOA is $750/mo AGGGGGHHHHHHHHHHHH

Mar 22, 2013 02:38 PM