Whether you buy a condo or a home in a subdivision, chances are that it will likely fall within the jurisdiction of a homeowners’ association (HOA). HOA is an organization charged with overseeing maintenance of common areas and amenities as well as enforcing rules over how properties are utilized in communities or neighborhoods of single-family homes or condominium buildings. Every owner in a community with a HOA is also a member of the HOA, which is typically run by a board of community members.

There are several ways in which an HOA can serve its community, including:

• Curb appeal – Homes are required to abide by appearance-oriented guidelines set by the association. These guidelines are designed to ensure a uniform appearance for all properties in the community and, by doing so, protect the property values in the area. They are the reason you likely will not see a neglected property with an unkempt lawn in a HOA-governed neighborhood.
• Recreation – Many HOAs offer recreational amenities to residents that range from a swimming pool and a clubhouse to tennis courts and even dog parks.
• Mediation – When a dispute escalates between neighbors, the HOA may be able to intervene and potentially impose fines or sanctions.
• Community engagement – HOAs will often host social events such as welcome parties for new residents or block parties for the holidays. This is a great way to get to know your neighbors and foster a sense of community.

Much like regulations, HOA fees can vary based on anything from the location of the neighborhood to the number of community amenities and services offered. HOA fees for a townhome typically do not cover insurance for your unit, so this additional expense should be factored into your budget. The HOA dues for townhomes, however, are generally lower than those of condos as the HOA is not responsible for repairs to the outside of the townhouse.

If you are looking to purchase a home in a community that is governed by an HOA, be sure to read the fine print to understand the regulations in place and any obligations that come with your membership. In some states, the law requires sellers to provide buyers with a disclosure packet prior to a residential closing. This may include any HOA governing documents that will be binding on the purchaser, such as declarations of covenants, bylaws, architectural guidelines, and resolutions of the HOA’s board as well as dues.

While there are many positive aspects about an HOA, some buyers do not like the idea of being told what they can or cannot do with their own property. In addition, fees can be a deterrent for some. If the neighborhoods you are looking at have an HOA, make sure to inquire about the costs associated with it and weigh all the pros and cons.

If you have any questions and thoughts about financing a home in Winston Salem or the surrounding areas, The Sharpe Mortgage Team would be happy to discuss them with you. Call us today to set up an appointment!