Hi guys, could you please help me with the newbies challenge?
So, I am comparing 2 shortlisted properties. One condo is in a range of $250K, it has $295 HOA, another around $200K with $495 HOA.
It's obvious that I want to evaluate what each HOA will actually cover, to see if the higher HOA is justified, and then calculate a total cost of property. Let's for now forget about comparing income potentials.
So, the challenge I am having is that my real estate agent says I cannot receive HOA documents until I complete inspection. Comparing to Canadian home buying process where you can see documents before even making an offer, it makes no sense whatsoever to me.
Basically, I need to make an offer blindly, then spend money on inspection, only to find out that I am paying $495 for hardly any benefits, and that their financials are weak etc... So now if I want to drop the deal, I wasted inspection money that i wouldn't need to do if i was able to start my due diligence process with free step of HOA docs revision.
So, is there a way around it? Is there a place where HOA restrictions, financials and all their rules and policies are disclosed publicly or can be requested prior to offer, or at least prior to investing in general inspection?
Well you can pay for the HOA documents up front. Most property management companies charge between $300-$500 for them.
And that's what doesn't make sense to me.
If I am evaluating 10 properties I need to pay $5K. It's like paying $5K to look at photos of properties, or to look at their tax history, or purchase price fluctuation. It's like pay a non-refundable deposit for this computer so we will tell you its specification.
I understand that "that's just the way it is", but it makes no sense to me.
So, I wonder if anyone else to whom it doesn't make sense found any work around it.
@Olga Kostrova Yeah it's frustrating. I'm considering condos in Virginia Beach also. It seems strange and archaic to me that all this info is kept from the buyer or you gotta pay hundreds of dollars just for some files. Hopefully the industry evolves to provide more transparency. You should just ask the seller or the seller's agent. They'll probably tell you what's included with the HOA/POA fees. Sometimes it's in the listing. Sometimes it's in the private agent's remarks section that clients can't see.
You can probably reach out to the HOA/POA directly with generic questions most (larger) have websites and / or offices. You don't necessarily Have to wait to see the resale package to get the basic answers you need, you can also ask the buyer/agent.
You have to pay to get the real numbers (even the owner does, although he did probably just receive a yearly statement that would give you most of the info you want. But it probably went straight in the trash.) your concern about what does it cover doesn’t make sense. That’s less than a 5 minute call your realtor makes for you. In regards to the financials you could ask locals if they are run like the ones I’ve experienced in MN and Vegas. Every year when they are audited they simply increase the monthly dues if they’re short of money. So another 5 minute call asks when they last time they increased the dues was. Combined this shouldn’t have taken you as long as your post did. Simply so your realtor to find out the two things.
Ps. I rarely do inspections, but there’s certainly no reason you should have to wait until after the inspection to order the Hoa dox. You simply pay them the fee and they deliver it, usually digitally thee days.
Email the management company and ask the most pressing questions directly. The seller's agent should be able to provide you answers, and even the seller can (and should) provide the copy of the bylaws that he had received in the past.
Thank you, guys. So far neither seller agent, no my agent gave me details that would feel helpful. May be I will just have to learn to ask better questions..
What are the main questions you guys have learned to ask to make assessment of the "ROI" (so to speak) on HOA fees.