How HOA fees can hinder the sale of your home
Spring is coming and that means it's time for the real estate market to jump back into action. Homeowners are putting their properties on the market, having open houses, and hoping to sell their home to the highest bidder. But at the same time, potential buyers are hoping to get a new home for the best deal possible. So how do sellers and buyers find a common ground? It can be tricky to find a price everyone is happy with, and if you're selling a place with HOA fees, be prepared to fight for their positives.
Home buyers take home owners association fees into consideration
There are several factors that are taken into consideration when someone is buying a home: the location, condition, and price are all important details to potential home buyers. Homeowners Association Fees are an additional cost included in the price of a home that may wind up costing you big - it can deter someone from making an offer on your place.
Although HOA fees are not directly in the purchase price of a home, they will be an additional monthly expense that homebuyers need to take into consideration when making an offer on a home. They will need to plan HOA fees into monthly costs along with property taxes, home insurance, utilities, and the mortgage payment. Unfortunately the more expensive a home is the smaller the pool of potential buyers gets.
What to expect from home owners association fees
HOA fees are applicable to homeowners in communal properties such as condominiums townhouses and gated communities. According to Investopedia they can "often range from $200 to $400 per month. The more upscale the building and the more amenities it has, the higher the homeowners' association fees are likely to be." However, in many high cost of living areas, HOA fees have been known to be as high as $700 per month.
HOA fees are held in a reserve fund in the name of the property and used for general upkeep or maintenance of common areas and public spaces. In addition to the regular monthly or yearly HOA fees, if unplanned repairs are required homeowners may need to pay more than the regular fees. Examples include the cost to replace a roof or repave a parking lot. If there isn't enough money in the reserve fund, all homeowners will be asked to contribute additional monies equally.
The benefit of HOA fees
HOA fees are used to keep the property maintained, well kept and clean; they can be put towards maintenance such as snow removal and cutting grass or keeping a pool clean and the lobby of the building presentable. When living in a communal property, the reality is there are areas that belong to everyone and those areas need to be maintained.
If your home is on the market potential buyers will most likely ask questions about the mandatory HOA fees, so be prepared with any and all information you have regarding the cost of the fees as well as the rules regarding what they can be used for.
There is a market for potential homebuyers who are looking for low maintenance properties and if that's the case they will most likely see the benefit in paying HOA fees.