Homeowners Association (HOA) - Friend or Foe?

Home buyers in the Triangle area are always weighing the pros and cons of neighborhoods with Homeowners Associations with questions such as: What should I know about a Homeowners Association?  What does an HOA cover or not cover? If my neighborhood has an HOA, do I have to pay for it?  Does an HOA monthly fee affect my ability to afford a home?  

Lets talk Homeowners Associations and all the ins and outs. By definition an HOA is "a corporation formed by a real estate developer for the purpose of marketing, managing, and selling of homes and lots in a residential subdivision."  Once a predetermined number of homes or lots are sold in the development, the HOA ownership is transferred to the homeowners and membership is typically a condition to the purchase of the land or home and buyers are not given an option to reject it. It's important to know that if you purchase a home in a neighborhood which has an HOA with regular fees and occasional assessments, you are required to pay these amounts. One thing many people don't know is the HOA has the ability to put a lien on the property for unpaid fees or assessments.

All HOAs are different and cover different things so just because you live in a town home in North Raleigh it does not mean your HOA covers the same thing as a person living in a town home in Cary or Holly Springs.  Town home/condo community HOAs often are higher than the HOA dues in a detached home community because they often cover more benefits to the homeowner such as exterior and grounds maintenance. Make sure to consult your real estate professional for a full rundown of what is covered by a Homeowners Association when looking to purchase.  

HOA dues can also make a difference in financing your home.  When your lender quotes you a monthly payment on your Good Faith Estimate (GFE), they are only quoting your principal and interest for the loan as well as your escrow amounts for taxes and insurance.  Your HOA monthly payment is a separate payment completely, and the amount of that monthly dues payment is taken into consideration towards your ability to afford the home. Take this into consideration especially if you are looking to buy at the upper end of your loan qualification as it may disqualify some properties.

Homeowner Associations are not inherently good or bad, they just "are".  They exist to protect property values for all persons living in a neighborhood and provide a system for rule enforcement and accounting of money to pay for the amenities they provide, upkeep of the neighborhood, things like grounds maintenance, etc.  Choosing whether you'd like to live in a neighborhood with an HOA is a personal choice. If you like the assurance and benefits they provide, then they are a good thing. If you see them as restrictive and unnecessary, you may want to consider a neighborhood without an HOA. 

If you have more questions about HOAs or you're looking to buy in Apex, Holly Springs, Raleigh, Wake Forest or anywhere in the Triangle, give us a call today......we would love an opportunity to help you answer all your questions about HOA’s and anything else relating to the Triangle Real Estate market. 

Chad Wingler Lead Buyer Specialist chad.welcometocarolina.com 919-300-5421