If you’re buying a home in a community with a homeowners association (HOA), there are some things you need to know. The community provides you with shared amenities and services like front yard maintenance and security patrols. The HOA board collects a monthly or annual fee to maintain those amenities, protect the integrity and safety of the community and to enhance property values for the homeowners.

The main benefit of life with an HOA is that you can enjoy the amenities you want without having to pay for them by yourself. But, shared benefits means that your dues are used for two things –property maintenance and improvements and for building reserves. This can include future expenses like swimming pool resurfacing or unexpected expenses like fallen tree removal. It also means that the HOA may have some rules you may not like, such as no yard signs or flags on holidays.

That’s why you need to see the governing documents of the HOA, including the CC&Rs, - covenants, conditions and restrictions. These are the rules of aesthetics, conduct, maintenance and security the homeowners voted to have, such as how many pets you can own or whether you can park your car on the street.

Keep in mind that HOA boards are composed of volunteer homeowners like yourself and that they’re not property managers. HOAs typically hire third-party property managers so board members can enjoy the community, too.

You can then make the decision whether this particular community is right for you.

As you browse listings on BerkshireHathawayHS.com or realtor.com, you may find homes you like that appear to be unavailable, due to some kind of contingency. If you find the perfect home, but it’s labeled Active Kick Out or Contingent, should you pursue it or forget it?

The reality is that contracts fall through sometimes. If you have a back-up contract, you can buy the home should it come “Back on Market” or “BOM.”

First Right of Refusal. This means the seller has accepted a contingent offer, such as the buyer has a home to sell before they can close on the seller’s home. The seller can reserve the right to accept a better offer and  if the contingency cannot be removed by the previous buyer. They must give the first buyer 48 to 72 hours to either remove the contingency and move forward with the purchase, or back out of the contract.

Contingency. Nearly all offers-to-buy have contingencies. Typical contingencies include provisions that the home must meet the appraised value by the mortgage lender’s third-party appraiser, or it must pass a professional third-party home inspection to the buyer’s satisfaction. The buyer may make the contract contingent upon the lender funding the purchase.

Option period. Option periods give the buyer time to get financing and complete home inspections and the appraisal. Unless the buyer acts on a contingency, the home is considered out of option, but it can still fall out of escrow.

Contact me to learn more.