Buyer Beware: When buying in an HOA, here are things to consider

Mortgage and Lending with CMG Home Loans NMLS 248937

As I came up with the idea for this post, and started to put it together I realize it sounds like I am anti Association...

That is not true, but there are things to be aware of when purchasing a home the is in an association.

Beyond some of the obvious items that include rules you must abide by, assigned parking, and use of your property there are some less obvious things that you need to consider when buying.

  1. Hidden Fees: While not actually hidden, they are more of an "unknown" you need to ask about. Most associations have fees to join. The most common one is a Capital Contribution which can range from a few hundred to a few thousand dollars. While this can be painful when you buy, as an owner they will help to keep the association healthy in the future. In addition, if you are buying a condo and forms need to be filled out about the association- the association will most likely require you as the buyer pay for that upfront.
  2. The Monthly HOA Fee itself: This is a cost you cannot control, and is part of your housing expense. It will affect your qualifying as well.  in todays market a $300 association fee is pretty similar to borrowing $55,000 in a mortgage. What does it cover? Are the amenities something you want/need? 
  3. Restrictions: In my market one of the biggest restrictions, Age.  We have a lot of retirement communities that require the occupant to be 55yrs + to reside in the unit.  I often get clients that are younger looking in these neighborhoods because you do get a lot for your money in many of these communities.
  4. Condo's, and the health of the project: This is a bit of an unknown that is important. When buying in a Condo project you not only have all of the above items but you also have to be concerned with the project. When applying for a mortgage we will check on the health of the association.  Most common problems will be: too high of a percentage of investors/rentals, to many owners late on their association fees, Litigation (where the association is being sued), and more (right down to new appraisal requirements for condos as well.) This is because you own a piece of the association as well, and that association directly effects the value of your property.

These properties are not bad and can be a great fit for some buyers, especially if you don't want to do exterior maintenance, but if you don't want to follow rules, they may not be a good fit for you.


Thanks for Listening!

I’d be happy to put my 30+ years of experience to work for you and your clients

Robert Rauf 
Mortgage Loan Originator NMLS# 248937 
or my blog: 
Office: (732)908-4868  Cell (732)740-0175

Since 1987 I have been helping my clients fulfill their dream of home ownership! HomeBridge Financial Services, Formerly REMN, HomeBridge Financial Services is located at 9 Grand Ave, Building 2 Suite A Toms River, NJ 08753. NMLS #6521. New Jersey Licensed Lender and Mortgage Banker #L041053. Visit or for more information. NJ Mortgages, New Jersey Mortgages, Mortgages in NJ, mortgage in New Jersey, Mortgages in New Jersey, Toms River NJ 08753, Toms River NJ 08755, Brick NJ 08723, Brick NJ 08724 Mortgage in Ocean County NJ, Mortgage in Monmouth County NJ, Jackson NJ 08527, Howell NJ 07731, Lacey 08731 08734, Beachwood 08722 Bayville 08721, 

Comments (22)

Robert Rauf
CMG Home Loans - Toms River, NJ

Kathy Streib I agree 100%.  For me, I would not be a good fit for an association, but for many of my clients they are a great fit. It just shocks me how even Realtors don't know about the hidden fees. If they are not disclosed upfront, the agent can actually be held responsible for them (and most E&O insurance has a $2,500 deductible)

Apr 21, 2022 06:42 AM
Robert Rauf
CMG Home Loans - Toms River, NJ

Michael Jacobs True for any purchase we make, Right?  The association my parents lived in, while gorgeous, even had stipulations for the color of your window treatments. Being aware upfront will help avoid headaches in the future.

Apr 21, 2022 06:45 AM
Kathy Streib
Cypress, TX
Home Stager/Redesign

Apr 23, 2022 05:56 PM
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Robert. Great tips! Knowledge gives one the power to make good decisions. Enjoy your day.

Apr 24, 2022 05:10 AM
Ed (Edward) Silva, 203-206-0754
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

People need to do their research when going into a property with an HOA and be prepared for its limitations.  Your outline is very detailed

Apr 24, 2022 05:26 AM
Carla Freund
Keller Williams Preferred Realty - Raleigh, NC
Carolina Life RealEstate & Relocation 919-602-8489

These are all great things to know before buying in an HOA. Hoa's can be helpful or a hinderance depending on how you live your life. 

Apr 24, 2022 05:45 AM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good morning Robert,

Great synopsis of what a buyer should know before purchasing a home in an HOA. Thank you for sharing with us.

Apr 24, 2022 06:57 AM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Hi Robert - buyer beware is a good title.  Know what is and whether you want to be in association.  For me I have a home in New York that is not in an HOA and that is the way I like it.  Our Florida house is and that works well since I am not there all the time.

Apr 24, 2022 11:57 AM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Hi Robert:

This is a terrific overview of some issues buyers should consider when looking at homes in HOAs. Things can vary by association, and certainly by state or region. It's essential due diligence to know what you are buying, the costs, any restrictions, and so much more before it's too late. And there are normally tons of documents to review (at least the HOAs in my area here in CA!).


Apr 24, 2022 12:58 PM
Margaret Rome Baltimore 410-530-2400
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

And those condo docs can be huge.   A recent condo re-sale had over 900 pages. I was thankful they were emailed .

In my area, the seller pays for the HOA and Condo Docs.

Apr 24, 2022 08:54 PM
Robert Rauf
CMG Home Loans - Toms River, NJ

Margaret Rome Baltimore 410-530-2400 In my area the buyer seems have to pay it all. The biggie is that capital contribution.. Don't you have that in MD? it is pretty common. and some have a laundry list of misc. fees on top

Apr 25, 2022 02:04 PM
Robert Rauf
CMG Home Loans - Toms River, NJ

Jeff Dowler, CRS How many people do you think actually read all of that?? (lawyers charging by the word!)

Apr 25, 2022 02:06 PM
Robert Rauf
CMG Home Loans - Toms River, NJ

Grant Schneider I completely understand.  For me in a primary- It wouldn't work, but I totally understand it for a second home.

Apr 25, 2022 02:07 PM
Robert Rauf
CMG Home Loans - Toms River, NJ

Dorie Dillard Austin TX Always good to pay attention, and make sure you have that information for your buyer

Apr 25, 2022 02:11 PM
Robert Rauf
CMG Home Loans - Toms River, NJ

Carla Freund Exactly- A great fit for some.  and all of us in the business need to pay attention to the fees involved and keep our buyers informed

Apr 25, 2022 02:12 PM
Carla Freund

Yes, I noticed fees jumped a little a few years ago. I wouldn't be surprised to see them go up again as maintenance cost are going up.

Apr 26, 2022 04:42 AM
Robert Rauf
CMG Home Loans - Toms River, NJ

Ed Silva and don't forget that we need to dig a little deeper for our buyers to be sure we have the information, especially in regards to the fees that are due at closing. 

Apr 25, 2022 02:14 PM
Robert Rauf
CMG Home Loans - Toms River, NJ

Wayne Martin AMEN! I always say knowledge is power.  We just need to know what questions to ask!

Apr 25, 2022 02:15 PM
Robert Rauf
CMG Home Loans - Toms River, NJ

Kathy Streib Thank you for the feature!

Apr 25, 2022 02:15 PM
Sheri Sperry - MCNE®
Coldwell Banker Realty - Sedona, AZ
(928) 274-7355 ~ YOUR Solutions REALTOR®

Hi Robert,

You touch on most major issues concerning an HOA. Some other areas that I think are very important are:

What are the HOA reserves? - In AZ, there is a minimum to be held.

What does the HOA cover, such as exterior paint, roads, and roofs, or is it only landscaping and upkeep of common areas only?  It is essential to know this info.

Apr 29, 2022 01:07 PM
Robert Rauf
CMG Home Loans - Toms River, NJ

Sheri Sperry - MCNE® This topic could go on forever!  That's why I lumped it in with "health of the association"  My biggest focus was the hidden costs to join an association. Most buyers are not aware of the added closing costs, and surprisingly few agents are aware of them as well (which is mind boggling to me???)  As I was writing this I was worried I was going to appear to be anti condo, which I am not.. I probably should have just made the focus about the fees.

May 02, 2022 07:37 AM