Whether you’re looking to purchase a condo, townhouse, or single-family home, the number of homes with Home Owner Association (HOA) fees is on the rise. Often thought of as applicable only to condos and townhouses, many single family houses are now also requiring HOA fees, which means that knowing the ins and outs of what you will be paying for monthly or yearly is important to factor into your budget when considering a new home, no matter where you may be looking.
The benefits of a Home Owner’s Associations are numerous. You can think of these maintenance fees similarly to money that would go towards real estate property taxes to pay for city and state services but with more of a focused support to communal areas, combined with certain rules and regulations to maintain value and quiet enjoyment in our day to day lives. In other words, these fees work to help certify that your community looks its best and is able to function smoothly. Indeed, a recent study has gone to prove that, on average, townhomes, condos, and homes with HOAs sell for about 5-6% higher than a house without an HOA.
And while you can certainly see the value, it’s still important to know what goes into the dues you’re paying and what you can anticipate in terms of monthly and yearly expenses when looking for a new home. Before you purchase a home with an HOA, here are some things you should consider before committing to these fees:
- Is your HOA managed by a Property Management Company? 70% of all HOAs are managed completely by volunteers, but there are many reputable Property Management Companies that take on the more menial tasks as well as larger to-dos.
- How many units are in your complex? Typically the smaller the complex, the smaller the fees.
- What common areas does your complex include? Typically HOA fees cover exterior maintenance, but some HOAs do cover internal repairs. This will be outlined clearly in the CC&Rs and bylaws so be sure to do your research before committing, and ask yourself if these fees feel fair in proportion to what’s included in your coverage.
- How old is your building? HOA fees are typically higher in older buildings, as there is more required maintenance and general upkeep to adhere to safety standards and protocols.
- Does the overall price of your home feel fair in proportion to your HOA dues? On average, HOA homes are priced 4% higher than homes outside of HOAs.
So what does this mean for your wallet?
While most fees are fair and will not break the bank, it’s important to understand the value you will be getting in return. As with most things in California, HOA fees are higher here than in most parts of the country. The Bay Area, Oakland in particular, sees an average fee of anywhere between $350-$600. And while that might seem like a lot of additional money to fork over after making a big purchase, the overall quality of your home and community and peace of mind is usually enough to justify the extra expenditure.
Fortunately, buildings in and around the Oakland/Bay Area are comprehensive in terms of quality amenities – including immaculate common areas such as gardens and grounds, rooftop decks, and gyms. Take a look at these incredible listings and see for yourself. Ultimately, you get what you pay for.
Unsure of how to determine the best bang for your buck? That’s where a quality agent with extensive background and acumen comes in. Luckily, Kim Cole Real Estate specializes in condos and townhomes, so we have certainly seen our fair share of HOAs. We will help you determine what feels fair and right for your wallet, circumstances, and hopes for a new home.