Our Real Estate Blog
Buying a home in a neighborhood with a Home Owner’s Association (HOA) works well for some families, while others find the HOA to be burdensome or intrusive. Learning more about what an HOA is, how it works and what to expect can help you determine if your next home should be in a neighborhood with a homeowner’s association.
What Is a Homeowners Association?
When builders or developers create planned communities with ameneties, they often also create a homeowners association to help manage the shared areas of the property when the building is complete. The homeowner’s association has some powers over the people who live in the neighborhood and is also responsible for maintaining the look and integrity of the community. Anyone owning a home in the community must also pay HOA fees for the services rendered. Dues can be paid monthly quarterly or annually and are determined by the association itself and its bylaws.
If you buy a home in a neighborhood with an HOA it is important to discover what rules are in place and what expectations the HOA has of residents. Some are far more involved and assertive than others, with rules for trashcan placement, yard maintenance and even parking. You should know what amenities you’ll have access to when you join the community and how your fees will be spent.
Since HOA fees are an added expense, they’ll also be considered when you apply for a mortgage, so be sure to factor them in when you work out what you can afford.
Benefits of Living in a Homeowner’s Association Community
Communities that have an HOA in place are generally well maintained; the HOA is responsible for caring for public areas, landscaping, sidewalks and some roadways. You won’t have to worry about living in a messy or unsightly neighborhood when an HOA is in place.
A pool you don’t have to care for, tennis courts to use on demand and even a clubhouse for parties and get togethers are big draws for some homeowners, if these things matter to you, you’ll enjoy this type of community.
A community with an active and healthy HOA will likely have groups and social gatherings. In some HOA groups, clubs, celebrations and welcomes for new members are scheduled throughout the year. If you want a close knit, involved community, then the right type of HOA may serve your needs well.
Drawbacks of Living in a Homeowner’s Association Community
The biggest drawback of living in an HOA community is having to cope with rules that you don’t agree with or that put a burden on your family.
For many homeowners, the HOA determines what colors a home can be, how often the lawn should be mowed and even what holiday decorations are acceptable. If you prefer making these decisions for yourself, you may not enjoy an HOA neighborhood.
You may not be able to make some improvements to your home; your HOA will determine if you can create an addition, add a fence (and will specify what kind of fence you can have) or even rent out your property. Homeowners who might want to expand their home, renovate or even have kids or get a dog may find that the rules for fencing and building are too stringent.
In some cases, an HOA has the power to levy annual fees or costs for construction projects and bill homeowners for the work. In some communities, this can run into the thousands of dollars per home. You should be aware of this possibility and determine if the HOA has to power to charge members for capital improvements before you buy.
Is an HOA Community Right for You?
If amenities and low care public areas matter to you and you don’t have plans for ambitious renovations or home changes, then an HOA neighborhood could suit your needs. If you generally dislike having rules imposed on things you own or feel uncomfortable having to request permission to make changes, the HOA may be more of a burden.
Review the rules and bylaws of any HOA you are considering buying into to be sure you fully understand what to expect before you make a purchase. You’ll be able to enjoy the neighborhood without any unwelcome surprises or costs when you know what to expect.
House hunting can be time-consuming. With so many houses currently on the market and so little time to spend visiting homes, it’s important to narrow down your search as much as possible before attending a showing.
Fortunately, in today’s digital world, it’s possible to learn a great deal of important information right from your phone or computer.
In today’s post, I’m going to give you some advice on researching the homes you’re thinking about making an offer on. We’ll talk about researching the neighborhood, and--of course--the house itself.
Putting together all the stats on the home
Let’s start with, arguably, the most important thing to research: the house itself. When you want to learn about a home, the best place to look is usually the real estate listing. Since most of us discover homes through listings, odds are you’re already on this page. However, there’s a lot of information in a listing, so take the time to go through it and gleam whatever you can from the home’s description.
Next, Google the house address and click on listings from other real estate sites. Oftentimes, a house that has been sold before will have multiple listings across the internet with different data.
Once you’ve scoured the listings, head over to the county assessor’s website to look at records of the home’s ownership. This will tell you who bought and sold the home and when. There’s much you can learn from this data, especially if a home is being sold frequently. You can also use this information to contact previous owners to ask them questions about the home that the current owner might not know the answer to.
Snooping around the neighborhood
If the house is nearby, simply driving through the neighborhood can tell you a lot. You can visit the neighborhood during rush hour to see what the traffic is like, for example.
However, it isn’t always practical to take the time to visit a house that you aren’t sure you’re interested in. So, what’s the next best thing? Google Maps.
Visit the neighborhood on Google Maps to see what’s in the area. Are there a lot of closed businesses? That could be a sign of a neighborhood in decline. Check for nearby things like parks, grocery stores, and other amenities that could influence your buying decision.
Next, use Google’s “street view” feature and explore the neighborhood. You can see what kind of shape the other homes are in, and find out the condition of infrastructure like roads and sidewalks.
Note addresses of comparable homes in the neighborhood and look up their purchase prices. This will give you an idea of whether the home is being priced appropriately.
If you’re having trouble finding information on a home, such as sale records, try contacting the local assessor. They should be able to point you to a database that will help you in your search.
Finding a mortgage lender should be easy, particularly for homebuyers who want to purchase a high-quality residence without having to worry about spending too much. However, many mortgage lenders are available nationwide, and the sheer volume of lenders can make it difficult to choose the right one.
Lucky for you, we're here to help you streamline the process of selecting the ideal lender.
Now, let's take a look at three tips that homebuyers can use to accelerate the process of choosing the perfect lender.
1. Know Your Credit Score
Your mortgage interest rate may vary based on your credit score. As such, you should learn your credit score before you begin your search for the right lender. This will enable you to boost your credit score if necessary – something that may help you get a preferred mortgage interest rate.
You are eligible for one free copy of your credit report annually from each of the three major credit reporting agencies (Equifax, Experian and TransUnion). Request a copy of your credit report, and you can find out your credit score and map out your search for the ideal mortgage lender accordingly.
2. Meet with Several Mortgage Lenders
There is no shortage of mortgage lenders in cities and towns around the country. Therefore, you should allocate the necessary time and resources to meet with several credit unions and banks to explore all of your mortgage options.
Each lender can provide details about fixed- and adjustable-rate mortgages, how these mortgages work and other pertinent mortgage information. This information can help you make an informed decision about a mortgage.
In addition, don't hesitate to ask questions when you meet with a mortgage lender. If you obtain plenty of information from a mortgage lender, you'll be able to understand the pros and cons of various mortgage options and make the best choice possible.
3. Review a Mortgage Closely
A mortgage may enable you to secure your dream residence, but it is important to understand all of the terms and conditions associated with a mortgage before you select a lender.
For example, if you decide to purchase a condo, your mortgage might only cover the costs of your property. Meanwhile, you still may be responsible for condo homeowners' association fees that total hundreds of dollars each month, so you'll need to budget properly.
Of course, you should feel comfortable working with a mortgage lender as well. The ideal mortgage lender should be available to answer your concerns and questions at any time and help you stay on track with your monthly mortgage payments.
If you need extra assistance as you consider the mortgage lenders in your area, you can reach out to a real estate agent for additional support. This housing market professional can provide insights into mortgage interest rates and may even be able to connect you with the top local lenders.
Take the guesswork out of finding the right mortgage lender – use these tips, and you can move one step closer to getting the financing you need to buy your dream residence.
The process of closing on a home can seem lengthy and complex if it’s your first time buying or selling a house. There are several costs and fees required to close on a home, and while it’s up to the individuals to decide who covers what costs, there are some conventions to follow.
In this article, we’re going to talk about closing costs for selling a house and signing on a mortgage. We’ll discuss who pays what, and whether there is room for negotiation within the various fees and expenses.
But first, let’s talk a little bit about what closing costs are and what to expect when you start the process of buying or selling a home.
Closing costs, simplified
If you’re just now entering the real estate market, the good news is you can often estimate your closing costs based on the value of the property in question. You can ask your real estate agent relatively early on in the process for a ballpark figure of your costs.
Closing costs will vary depending on the circumstances of your sale and the area you live in. In some cases, closing costs can be bundled into your mortgage, such as in “No Closing Cost Mortgages.” However, avoiding having to deal with closing costs often comes at the expense of a slightly higher interest rate.
If you are planning to buy a house and have recently applied for a mortgage, laws require that your lender sends you an estimate of your closing costs within a few days of your application.
Now that we know how closing costs work, let’s take a look at who plays what.
Buyer closing costs
In terms of the sheer number of closing costs, buyers tend to have the most to deal with. Fortunately, your real estate agent will help you navigate these costs and simplify the process.
They can range from two to five percent of the cost of the sale price of the home. However, be sure to check with your lender for the closest estimate of your closing costs. It’s a good idea to shop around for mortgage lenders based on interest rates as well as closing costs charged by the lender.
Here are some of the costs you might be asked to pay as a home buyer:
Prepaid interest or discount points
Home inspection fee
Insurance and Escrow deposits
Seller Closing Costs
While the seller pays a larger amount of closing costs, sellers still have obligations at closing that can be just as expensive. The biggest expense for sellers is to pay the real estate commission. Commission usually falls in the vicinity of 6% of the sale price of the home. This covers the commission of both the seller’s and the buyer’s real estate agents.
The main takeaway? Buyers and sellers both share the burden of closing costs. While the buyer has more expenses to take care of, the seller pays for the largest costs.
The cost of buying a house extends beyond a seller's initial asking price. In fact, there are many "hidden" costs that buyers need to consider as they decide whether to purchase a house, such as:
1. Closing Costs
There are various closing costs that a buyer may encounter before he or she finalizes a house purchase, including survey, appraisal and wire transfer fees. As such, it generally is a good idea to prepare for these costs prior to launching a house search. Because if you prepare for closing costs, you can ensure that you have the finances available to cover these expenses when you are ready to complete a house purchase.
Oftentimes, it helps to meet with banks and credit unions prior to starting a home search. These financial institutions can help you get pre-approved for a mortgage and teach you about home closing costs. Best of all, after you get a mortgage, you can start your home search with the financing you need to secure your ideal residence.
2. Property Taxes
Property taxes usually are assessed twice a year, and they vary based on state and county. However, if you learn about property taxes, you can map out your homebuying budget accordingly.
Real estate property tax information is part of the public record. Thus, you can access information about property taxes related to a particular home before you purchase it. And once you have this information at your disposal, you can use it to determine whether to move forward with a house purchase or continue your search for your dream home.
Utility bills vary based on the size of a home, its location and other factors. If you devote time and resources to estimate your utility expenses, you may be better equipped than ever before to make an informed home purchase.
To assess your potential utility costs, you may want to consult with a seller's agent. This professional may be able to provide you with insights into the current homeowner's utility expenses to help you budget appropriately.
It never hurts to hire a real estate agent to help you navigate the homebuying journey, too. A real estate agent can offer expert insights into closing costs, property taxes and other homebuying fees, as well as help you quickly discover your dream residence.
Let's not forget about the comprehensive homebuying guidance that a real estate agent can provide, either. For instance, if you are unsure about whether to submit an offer to purchase a house, a real estate agent can offer recommendations and tips to help you make the best-possible decision. Or, if you have concerns or questions at any point during the homebuying journey, a real estate agent is ready to respond to them.
For those who want to buy a house, it helps to learn about all of the potential costs associated with a home purchase. If you start budgeting for a home purchase today, you could accelerate your quest to find and buy your ideal residence.