The Quick Handbook for Buying an HOA Home

Businessman Placing House Models On HOA Cubic Blocks

Right now, about one-fourth of single-family homes are in HOA neighborhoods. When buying a home, there’s a good chance that your dream opportunity will be in an HOA. How do you buy an HOA and make sure you’ll be happy as a member of the association? This is your quick go-to guide for buying an HOA home.

The HOA Life

Buying an HOA home is signing up for a lifestyle, some HOAs will be perfect for you and some might not be. The rules, regulations, and customs of your neighborhood will be shaping your lifestyle for your time as a homeowner in the neighborhood. The rules and by-laws define the home renovation rules and neighborhood code of conduct. You also get to benefit from all the neighborhood’s great amenities like parks, pools, and seasonal events. The community governing style will influence how events are planned and incidents are dealt with in your neighborhood. For many, the trade for a quiet neighborhood with nice amenities is more than worth not being able to paint your house lime green.

If you are considering buying a home in an HOA (as many homes are), it’s important to know what lies ahead and how to find the right HOA for you. Let’s dive into a brief yet complete HOA home buying guide.

How Buying an HOA Home Works

When an HOA is built, the land belongs to the developer-builders. The entire neighborhood is owned by the association, which is run in equal parts by the owner-members. Council members are elected volunteers and the founding documents define how new council members and rules are selected. The neighborhood has upkeep, repair, and update costs for the shared amenities, and for this, each homeowner pays an equal share in annual dues to cover the costs. Special assessments are added dues to cover specific costs.

The Neighborhood Rules

In addition, the founding document CC&Rs and by-laws govern the neighborhood rules. These usually relate to home exteriors, pets, parking, rental and property use, and amenity rules. Every homeowner is subject to them and maybe fined or even foreclosed for violations.

Becoming an HOA Member

When you buy an HOA home, you become a voting owner-member eligible to propose rules and run for council, and subject to all the rules, regulations, and dues of owning a home in the association. 

Read the Covenants and By-Laws

When house-hunting in HOAs, always read the rules before you make a decision. In many neighborhoods, the rules won’t bother you at all. You won’t have any desire to paint your house lime green, you want to park your car in the garage, and you always bring your trashcans in on time. If you feel aligned with the HOA rules, this could be a great match for your home purchase. If something rubs you the wrong way, be aware even if the HOA says they are not strict enforcers. The documents are still binding and it could be enforced.

Some HOAs don’t like to share their documents before you buy, ask your real estate agent to help you get a copy anyway.

Determine if the Amenities are Worth the Cost

Every HOA has neighborhood amenities paid for by annual dues from homeowners. The question is whether you feel the dues are worth access to the amenities in your neighborhood. HOA streets often have a nearby park that can be walked to without crossing a major street. There may be a pool you don’t have to maintain, and access to the clubhouse for private and public events. There may be a fitness center, laundry room, private lounges, some even have a little library or after-school center.

Every neighborhood is different. Decide if the dues are a good deal for the amenities you get access to as an HOA homeowner.

Discover if the Reserve Fund is High Enough

The reserve fund of an HOA is its savings account for the cost of figure repairs and updates. The reserve is built ideally from wisely under-spending dues income and building a margin for predictable future costs. The larger the reserve, the less likely an emergency repair or upgrade will cost a special assessment from homeowners.

Decide the Role You Will Play in Neighborhood Governing

Lastly, decide if you want to be a part of voting on issues or join the council. Some homeowners are highly motivated by being a part of their own community management, and some enjoy that there are other motivated people to do it for them. Find an HOA with an attitude and path to participation that suits your own plans.

Buying a Home in an HOA Neighborhood

Many homes built today and in the last 60 years have been inside HOA-planned neighborhoods. By buying an HOA home, you join a community and become a dues-paying co-owner of every shared amenity. From protecting property values to enjoying a beautiful park and pool, the key is to find an HOA whose rules and attitudes match your ideal lifestyle. 

Are you ready to buy a home and are wondering about buying in an HOA? Neighborhood associations can be a great benefit to your homeowner experience, as long as you find a neighborhood that suits your lifestyle and future plans. Contact us today to explore local homes, neighborhoods, and the next steps to your new dream home.

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