Different buyers want different things from a neighborhood. Some are adamant about finding an area that is governed by a homeowners associations (also known as an “HOA”), while others are equally as passionate about finding an area without an HOA.
This shouldn’t be surprising. All buyers are unique, and they all have wants and must-haves when searching for a new home. Are you the type of buyer who wants an HOA or not? If you’re unsure, here’s a rundown of what an HOA is and the pros and cons of living in an area governed by an HOA.
What is an HOA?
In simplest terms, an HOA is a group of property owners that creates and enforces rules and regulations for all properties within a certain area. If you buy a home in an area that falls within an HOA’s jurisdiction, you automatically become a member – whether you want to be or not. Members are required to pay dues and follow the HOA’s rules.
HOAs are common in planned communities and subdivisions, as well as townhome and condominium developments and complexes. They are often launched by the developer of the community or subdivision and then turned over in time as individual units and properties sell.
HOA Pros
We’ll start with the bucket of buyers that much prefers an HOA. What do they love so much about having an HOA in place?
First and foremost, HOAs tend to keep neighborhoods looking good. In an area without an HOA, your neighbor might let the grass grow waist-high, leave rusty cars on cinder blocks in the driveway, or paint the house neon green.
With an HOA in place, depending on the rules, none of those things would happen. And, if they did happen, neighbors could file complaints and go through a mediation process to work things out.
Second, areas with HOAs often have shared amenities for owners. Amenities might include a community pool, hiking trails, dog parks, pavilions, playgrounds and more. And, best of all, an HOA’s budget covers maintenance and upkeep of these shared areas.
Finally, HOAs tend to bring neighbors together, generating community pride and spirit. HOAs often host parties around special holidays and occasions (like Halloween and the Fourth of July), and shared membership in an HOA means that neighbors can’t help but get to know each other to some degree.
HOA Cons
Not everything related to HOAs is great, and that’s why some buyers will do anything to avoid them.
The biggest drawback to HOAs is that they cost money. Owners in the area are required to pay dues, and there’s no way of getting out of them. This isn’t always a big issue. In single-family neighborhoods, dues tend to be low – sometimes as little as $10-$20 a month. In established neighborhoods where the HOA has managed its finances well, the dues may be even lower.
But not all HOAs manage their finances well. If you live in an area where this is the case, you may find yourself sucked into the drama of an insolvent HOA that forces your dues to go up significantly for a period of time.
Also, while HOA rules and regulations can be attractive to some, they might be off-putting to others. For example, some HOAs limit the number of cars that can be parked in a single home’s driveway and street-front. But what if you have high school-age kids who have cars and you need to park them on the street? Some buyers might feel handcuffed by the HOA’s limitations.
And, finally, HOAs can lead to challenging interpersonal relationship issues. HOAs have boards with positions filled by homeowners in the community. Board members don’t always get along, and sometimes you get one board member who turns into a tyrant and makes life difficult for everyone else.
Is an HOA Right for You and Your Family?
Only you can determine whether or not an HOA is right for you and your family. But make sure you always conduct proper research. Before you even considering making an offer on a home, gain a deep understanding of an HOA’s cost, its rules and regulations, as well as its financial situation.
When you buy in an area with an HOA, you’re buying a mandatory membership in an association that will in some way affect your life. It’s best to know as much about that association as possible.
Have questions about HOAs? You can always send them to me at pthessen1@gmail.com.
-submitted by Perry Thessen
