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The Cost of Buying A Home In An HOA Community

Thursday, September 12, 2019   /   by Sharyn Younger

The Cost of Buying A Home In An HOA Community

Buying A Home In An HOA Community: What’s the cost?




Know what to expect when buying a home in an HOA

There’s a lot to consider in purchasing a home in an HOA. Learn what to expect and how to best navigate the transfer from seller to buyer


Home Owners Associations. Love them, hate them, they’re here to stay. If you are buying a home in an HOA community there are certain things you need to know.


During the offer process you will receive an HOA Addendum from the seller which shows all of the fees owed to the HOA associated with the transfer of the property from seller to buyer. HOA’s are hungry and need their pound of flesh. What better opportunity for a money grab than when the property is being sold. Some typical fees are as follows:


HOA Dues: This is the monthly or quarterly fee you will pay beginning at the time you take possession of the property. If you’re at the point of making an offer, you probably already know what the monthly dues are.


Transfer fee: This is a negotiable fee between buyer and seller that can run from 0 – $400.


Capital improvement fees: This is typically a one time fee that the HOA charges to buy in to a community. The amount can vary widely from a few hundred dollars to several thousand dollars and intended to keep up with the amenities of the subdivision.  I see cap improvement fees on less than half of the homes I sell. They are very common in adult communities. It is also negotiable between buyer and seller.


Pre-paid dues: Often times the HOA will collect several months worth of dues up front as part of closing costs. They may collect a couple of months up to a full year of dues. The good news is you typically will not have to pay those dues for the months that you pre-paid. More money for furniture!


Resale Disclosure Fee: This a fee that is typically paid by the seller. It is applied to the costs of the HOA doing all of the paperwork required to inform you, the buyer, of any current violations on the premises that you might inherit, any back dues owed, or any up-coming special assessments that you will want to know about. This is a very important document that you will not want to overlook. It is not typically sent to your real estate agent so keep a good eye out for it. It often comes at the same time as your CCR’s – all the Codes, Covenants and Restrictions that the HOA places on homeowners. It’s a long tedious read, however you sure wouldn’t want to be surprised after you move in to find out that the house is due for exterior painting in order to maintain compliance.


Master planned or secondary HOA. Some communities sit within a master planned community or there are two HOA’s which could mean that some or all of the fees listed above, can be charged twice. I don’t often see this but it does happen. A good example would be the Ocotillo are area in Chandler. Each subdivision has its own HOA (fee), but they all also have a master planned community association (fee). Often times the secondary association fee is less than the subdivision fee.


A good listing agent will have the seller obtain all of the information prior to listing so it can be provided to a potential buyer. When we write an offer, we will either offer to pay or have the seller pay some of all of the fees depending upon how we decide to negotiate it. The seller can then agree to your terms, counter or reject.


The best thing a good realtor can do is help you know what to expect. Knowing that there could be additional closing costs to include HOA fees is a reasonable expectation and one you don’t want to be surprised by.


Copper Summit Real Estate | The Sharyn Younger Team
Sharyn Younger
480-589-2347
Waterstone Mortgage
Emilio Cosculluela
602-708-9322
Emilio.Cosculluela@WaterstoneMortgage.com

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