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Things You need To Know When Buying In an HOA

By
Real Estate Broker/Owner with Regal Realty of the Treasure Coast LLC

Things You need To Know When Buying In an HOA. 

When buying in a HOA or condo association the association fee needs to be factored into your monthly payment.  You may be pre-qualified for a home up to $150,000 but the association fee whether it is monthly or quarterly may cause you to be unable to purchase that home. 

 

The government and conventional loans have guidelines to follow based on your income and the percent of income used to pay your monthly mortgage and also base on you totally monthly obligations.  This in the industry is commonly called the "debt to ratio income."  If you fall outside this window then you will be declined  for the loan. 

When buying in an association if there is a high percentage of delinquency the lender may not grant to loan.

It is important when buying a home in an association to read the documents as soon as you are given them because it will give you way out of the deal if the terms of association do not meet your expectations. 

Associations can determine where your park, the color you paint your house, how many pets if any you can have,  what you can display outside your home.  The association can give additional assessments, when if not paid can cause a lien to be placed on your home. 

Associations can foreclose on your home is fees are not paid. 

Most associations require an application fee which is used to do a credit and criminal background check.  They may also require a face to face interview with members of the Association Board. 

Associations are run by a board which is usually your neighbors.   They provide a community atmosphere as well as added security. 

Associations can lead to reduced or elimination of cable bills because the fee of basic cable may be included in your association fee. They have been know to include the water bill within the association fees also.  

Associations can give you play grounds, community pools, business centers, rooms for private functions and additional community activities.

Most importantly, read the association documents before buying and as soon as you get them. 

 

   

Posted by

 

 

I am  certified from the National Association of Realtors for being a Short Sale and Foreclosure Expert. 

If your are looking to sell or purchase a home in South Florida CLICK HERE to contact me to assist you with your real estate needs.

 

                              

  

Merline Pennant

Realtor/Broker

Direct Line: (772) 985-7653

email: Merline@RegalRealtyTC.com

Website: RegalRealtyTC.com

 

Comments (33)

Kathy Streib
Cypress, TX
Home Stager/Redesign

Apr 13, 2013 11:24 AM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good morning Merline,

Excellent post and congratulations on being featured in Kathy's weekly post! HOA dues are something one must take into account and the lender will want to see those documents when figured your approval. Good shout out for an important factor in the equation.

Apr 13, 2013 09:20 PM
Mark Loewenberg
KW of the Palm Beaches - Palm Beach Gardens, FL
KW 561-214-0370

this is such a key to folks that see low priced listings and then realize that is not the true price of admission

Apr 13, 2013 10:08 PM
Linda Blumenthal
Hampton Crossing - Licensed Real Estate Salesperson - 631-466-4087 - Westhampton Beach, NY
NYS Licenced Real Estate Salesperson, CBR

Good morning Merline.  I can't imagine anyone buying into something when they don't know the rules and regulations.  Your warning is a good one.

Apr 13, 2013 10:26 PM
Merline D Pennant - New homes, Short Sales and Pre-foreclosures
Regal Realty of the Treasure Coast LLC - Port St Lucie, FL
New City, New Towns, New homes

Kathy thank you so much for honoring me in your weekly post.

Apr 13, 2013 11:08 PM
Merline D Pennant - New homes, Short Sales and Pre-foreclosures
Regal Realty of the Treasure Coast LLC - Port St Lucie, FL
New City, New Towns, New homes

Thank you Dorie.  You are right on the money.

Apr 13, 2013 11:09 PM
Merline D Pennant - New homes, Short Sales and Pre-foreclosures
Regal Realty of the Treasure Coast LLC - Port St Lucie, FL
New City, New Towns, New homes

Mark I like your term the true price of admission and that is exactly what it the price of admission.

Apr 13, 2013 11:10 PM
Merline D Pennant - New homes, Short Sales and Pre-foreclosures
Regal Realty of the Treasure Coast LLC - Port St Lucie, FL
New City, New Towns, New homes

Linda, you will be surprised the people who purchase and don't even read the documents and then they have issues with the association.  Or maybe they just had tunnel vision they wanted the house so much they did not care to read the docs until it was too late.

Apr 13, 2013 11:11 PM
Rich Cederberg
eXp Realty - Albuquerque, NM
eXp Realty Agent Albuquerque
There have been a lot of problems with condo associations here in Albuquerque making the properties essentially unsellable to anyone except cash buyers. And your point about reading the association documents is so very important!
Apr 14, 2013 12:15 AM
Charita Cadenhead
eXp Realty - Birmingham, AL
Serving Jefferson and Shelby Counties (Alabama)
Verifying the association fees directly with the Association and association docs is very high on the list. Many times, agents will just copy what someone else has without verifying.
Apr 14, 2013 02:33 AM
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

There are some of my clients who will out right refuse to look at homes in the Homes Association of Cedar Hills.  They are known for being punitive and many buyers name them by name and tell me . . . let's look elsewhere.

Apr 14, 2013 06:04 AM
Ginger Harper
Coldwell Banker Sea Coast Advantage~ Ginger Harper Real Estate Team - Southport, NC
Your Southport~Oak Island Agent~Brunswick County!

This is so very true.  We have a condo with at HOA and it is the biggest pain that you could ever imagine.  Long story short....Our tenant had 2 dogs in the condo. When she began to rent 3 years ago.  Rules changed and she had to remove the pets.  She did not and the HOA fined us $100 a day for 6 months.  WE are still battling  that..

Apr 14, 2013 08:26 AM
John G. Johnston
John G. Johnston & Associates, LLC - Westcliffe, CO
An Exclusive Buyer's Agent ~ Westcliffe, CO

Merline  Plus getting a mortgage on a condo unit where there is a high percentage of renters is impossible.  Forget buying one thinking you can rent it in a couple of years.  Thanks for the blog and enjoy the day!

Apr 14, 2013 10:15 AM
Merline D Pennant - New homes, Short Sales and Pre-foreclosures
Regal Realty of the Treasure Coast LLC - Port St Lucie, FL
New City, New Towns, New homes

That is interesting to know Rich.  HOA fees can be a killer.

Apr 14, 2013 10:55 AM
Merline D Pennant - New homes, Short Sales and Pre-foreclosures
Regal Realty of the Treasure Coast LLC - Port St Lucie, FL
New City, New Towns, New homes

Charita, you are so right.  Contacting the HOA directly is best for all concerned.  No surprises.

Apr 14, 2013 10:56 AM
Merline D Pennant - New homes, Short Sales and Pre-foreclosures
Regal Realty of the Treasure Coast LLC - Port St Lucie, FL
New City, New Towns, New homes

Carla, I understand your buyers I am one of them personally.  HOAs are too unpredictable.

Apr 14, 2013 10:57 AM
Merline D Pennant - New homes, Short Sales and Pre-foreclosures
Regal Realty of the Treasure Coast LLC - Port St Lucie, FL
New City, New Towns, New homes

Ginger that is awful.  they should have grandfathered in your tenant.  $100 a day for six months they were definitely trying to make some money.  This situation is just plain wrong.

Apr 14, 2013 10:59 AM
Kevin J. May
Florida Supreme Realty - Hobe Sound, FL
Serving the Treasure & Paradise Coasts of Florida

The options are few when you disagree with the HOA rules Merline so the excuse that you didn't read the docs is a poor one.  Nice post and breakdown for the uninitiated.

Apr 14, 2013 11:00 AM
Merline D Pennant - New homes, Short Sales and Pre-foreclosures
Regal Realty of the Treasure Coast LLC - Port St Lucie, FL
New City, New Towns, New homes

John, condos were suppose to be a cheaper alternative to purchasing a home but the HOAs have killed that situation and unless something changes they are going to be increasingly ta-bu to a lot of people.

Apr 14, 2013 11:00 AM
Ann Allen Hoover
RE/MAX Advantage South - Hoover, AL
CDPE SRES ASP e-PRO Realtor - Homes for Sale - AL

In my parent's neighborhood they are really on top of making sure the lawns are well cared for.  There are have been a couple of times they have received a letter telling them the yard needs cutting......sometimes their landscaping guy gets behind in his schedule when the weather is rainy.  She had to move one of her birdfeeders out of sight too.

Apr 16, 2013 04:57 AM