3 Things You Need To Understand About Buying A Home With A Homeowner's Association
If you are interested in purchasing a home in a neighborhood with a homeowner's association, there are a few things you need to understand about how homeowner's associations work before you go through with the purchase.
#1 It's A Financial Commitment
Purchasing a home in a neighborhood with a homeowner's association (HOA) is a financial commitment. You are going to have to pay annual dues to the HOA for as long as you live in your home. These annual dues will not go away just because you paid off your mortgage, and they will likely increase over time.
Make sure that you are able to pay the dues required for the homeowner's association, because there is generally no way out of them and board members of the HOA can go after you if you don't pay your dues.
#2 It Comes With Restrictions
Being part of an HOA also comes with restrictions. Most HOA's influence is legally binding, and when you purchase a home with an HOA, you are legally obligated to follow their rules.
Carefully read all the bylaws and make sure that you are comfortable with the restrictions and areas of control that the HOA has over your home. Your HOA may be able to determine what type of landscaping you install, the color you paint your house, and even if you can hang wind chimes on your porch.
Most of these restrictions are in place to ensure the quality of life in your neighborhood and to protect the value of the homes in the neighborhood. However, it is important that you feel comfortable with the level of control that the HOA will have over your property.
#3 It Offers Some Benefits
Most homeowner's associations offer some type of insurance protection for your home. Oftentimes, they purchase large catastrophic insurance policies for the entire neighborhood. These policies protect your home from things such as fire and storms. Find out if your HOA will reduce any of your overall insurance costs. As was mentioned above, HOAs also help to ensure a certain quality of life in the neighborhood and seek to protect the value of the homes in the neighborhood.
Before you purchase a home that comes with an HOA, make sure that you are comfortable with everything that the HOA entails, from the financial commitment, to the rules and bylaws, to the benefits. If you are comfortable with the entire package, proceed with your offer on the home. If you are not, find a home without an HOA or with an HOA that is more in line with your values. Look for an HOA that has management you are comfortable with. One good HOA management company is Cornerstone Properties Inc.
