HOA Pros and Cons

What is a Homeowners Association?

A homeowners association (HOA) is an organization that manages and oversees a housing community. It is in charge of common areas and creates and enforces community guidelines, which helps maintain a safe neighborhood with consistent property values. HOAs include members from the community who set covenants and enforce rules.

Common HOA Features and Services

A homeowners association might include the following features and services:

• Landscaping
• Poor repairs and maintenance
• Security services
• Community events
• Parking
• Fitness centers
• On-site business services
• Pest control
• Children’s playgrounds
• Trash collection
• Tennis court
• Picnic areas

A real estate developer may design HOA living to create a small community that gives homeowners access to the services and amenities they need most.

Pros of Living in an HOA Community

Exploring the pros and cons of HOAs helps buyers decide if this living structure suits their lifestyle. A homeowners association community offers many benefits, including the following.

Amenities and Shared Spaces

HOA members typically have access to various amenities, including pools, tennis courts, children’s parks, or clubhouses, which can make living in the community more enjoyable. Even better, these common areas are in close proximity to your home, making them more accessible.

Maintaining Property Values

HOA rules help maintain property values by creating a consistent standard among all homes within the community. The HOA community enforces regulations related to paint colors, outdoor decorations, landscaping requirements, and renovation plans. Because the HOA enforces these aesthetic standards, the neighborhood as a whole can enjoy higher resale values.

Sense of Community

Living in an HOA can create a sense of community. Each property owner shares the same property values and expectations. Community amenities encourage neighbors to get to know each other. Ongoing social events allow neighborhood residents to mingle, further promoting a sense of community.

Reduced Maintenance Responsibilities

A homeowner’s association gives property owners fewer maintenance responsibilities. HOA communities can enjoy shared swimming pools or fitness center access without the cost of maintaining these amenities. Landscaping is also usually included in HOA fees, which means property owners don’t have to handle lawn tasks in the summer or snow removal in the winter.

Conflict Resolution

The community association sets HOA rules and can provide a framework for neighbor disputes. Many HOAs have a dispute resolution process in place that makes solving disagreements easier. A designated property manager may also be in charge of resident disagreements.

Cons of Living in an HOA Community

Before choosing a home in a HOA, it’s important to consider the potential downsides.

HOA Fees and Assessments

HOA fees increase the cost of living. Many HOA communities charge a fee either monthly, quarterly, or annually. The fee is ongoing, meaning residents will still pay it even after paying off their mortgage. It’s also important to note that HOA fees can change over time. Special assessments are one-time fees that cover unexpected expenses.

Rules and Restrictions

HOA living also comes with community rules that all property owners must follow. HOA’s rules can restrict and limit personal choices, such as landscaping, pet ownership, or parking. HOA residents also have to seek permission from board members before making home renovations or modifications.

Potential for Disputes

Disputes are also possible in homeowner’s community associations (HOAs). The HOA board oversees community members, enforces rules, and makes management decisions. 

Living in an HOA community can lead to disputes over rule interpretation and enforcement. Board members may disagree with residents on policy decisions, maintenance priorities, and spending choices, while homeowners might challenge selective enforcement or question assessment increases.

Management Issues

The quality of HOA life may depend on the board. Poor management can lead to overall dissatisfaction in the community.

Impact on Property Sales

The restrictions and rules of an HOA can also impact property sales. Potential buyers may be hesitant to put an offer on a property in an HOA with strict regulations or high HOA dues. Some buyers may also not want to purchase a house in which they have to pay a monthly mortgage plus HOA fees.

Things to Consider Before Buying in an HOA Community

Buying a home in an HOA community is a big decision. Here are a few important things to consider before purchasing a property in an HOA community.

Reviewing the CC&Rs

Covenants, Conditions, and Restrictions (CC&Rs) are the rules set by the association. This legally binding document lists the financial expectations and property management expectations. For example, the CC&R might list home exterior expectations, such as prohibited paint colors or materials. It might also list certain pets restricted from the community.

Attending HOA Meetings

Potential buyers can learn more about a specific community by attending an HOA meeting. These meetings include board members and residents and are designed to ensure the association functions as planned. Interested buyers can also attend to learn more about dispute resolution and how new bylaws or covenants are implemented. 

Evaluating Financial Health

Evaluating an HOA’s financial statements can help potential homeowners learn more about the association’s stability and financial expectations. An HOA with minimal reserve funds may be more likely to increase fees. The process by which board members propose fee increases can also help potential buyers determine if that HOA is right for them.

Selling a House with an HOA

Selling a house in an HOA has unique restrictions that are worth considering.

Disclosing HOA Information to Buyers

Sellers should disclose HOA information to interested buyers, including fees, covenants, financial statements, assessment costs, and outstanding violations. This transparency also extends to pending legal actions against the HOA board.

Challenges of Selling a Home with an HOA

Sellers in an HOA may face unique challenges that can prolong the selling process. Rental restrictions, pet rules, and fluctuating fees may lead to fewer buyers. Always work with a real estate agent familiar with HOA sales.

Selling to a Cash Home Buyer

Selling a home in an HOA for a competitive price on your timeline is possible when working with a cash buyer. Here are a few things to know about selling your HOA property to a cash home buyer.

A Solution for Homeowners in HOA Communities

Cash house buyers offer sellers a fast, hassle-free solution for selling, even when the property is located in an HOA. They are typically less concerned with appraisal or inspection contingencies, helping to speed up the closing timeline. Additionally, cash buyers may be more willing to pay monthly HOA fees when they don’t have a monthly mortgage payment.

Benefits of a Quick Sale

Selling your single-family home in an HOA to a cash buyer offers many benefits, including lower selling fees and fewer contingencies. With a cash buyer, sellers also have more control over the closing date. 

A-List Properties buys HOA properties for cash, with no repairs or showings needed. We handle all HOA paperwork and can close in as little as 14 days.

Contact us today at (972) 526-7042 to discuss selling your home, or fill out our online form to receive a fast cash offer.