If you’re considering buying a property located in a homeowner association, you will have to deal with HOA fees. For people moving out on their own for the first time or moving from a traditional home to a property with an association, understanding what these fees do and why they are necessary is important.

One-Time Capital Contribution

Some HOAs require new owners to make a one-time payment into the association coffers upon their purchase of the property. This money is kept in a reserve account to cover future expenses, such as adding amenities or updating certain common areas. This fund may be used to make exterior repairs or improve landscaping. Sometimes, when an association requires a one-time payment, the monthly fees are lower.

Monthly HOA Fees

Many associations charge a monthly fee to cover certain ongoing expenses that benefit all residents. Some examples include the following:

 ·  Building maintenance
·  Utility costs for common areas
·  Trash pickup
·  Snow removal
·  Ongoing landscaping such as mowing or trimming
·  Pool maintenance
·  Maintenance of other common areas
·  On-site security
·  Lighting and signage for common areas

While owners not responsible for this type of actual work, they must pay their portion of the costs.

Comparing HOAs

It can be difficult to compare costs for HOAs because they are not all alike. For instance, one association may have a pool, exercise facility and/or common meeting room while another one may have none of these. The costs will differ because the two HOAs will need to maintain and provide different services.

Location  can also play a role in determining the cost of fees. For example, an older association with dedicated neighborhood streets maintained and plowed by city services may have lower fees than a home within an up-and-coming new construction area where roads are private and maintained by the association. Associations, regardless of age, with non-dedicated roads will bear the expense of care through their HOA fees.

The age of the association and its improvements may also impact the monthly fees.  Newer or new communities, possibly still covered by builder warranties, may not require the same level of reserves needed in older associations where roofing, concrete, fencing and building exteriors inevitably will need attention as the years progress.

Keep in mind that it’s always important to factor HOA fees into your budget when you are shopping for a home to ensure it matches your financial criteria. Your real estate agent should be able to help you determine what areas are owner responsibilities and what services are included in the monthly fees.  This information will help you to equitably compare associations to ensure you select the right one. For additional information on selecting the right property in the right association for you, feel free to contact me today for a consultation. I will be happy to answer any questions you may have, and/or help you find your dream home.

Allyson Hoffman, ABR, ACRE, CDPE, CRS, e-PRO, GRI, SFR, SRES
RE/MAX Villager
Serving Chicago's North Shore, North and Northwest Suburbs
847-310-5300
[email protected]

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Allyson Hoffman is your ultimate real estate resource for Chicago's North Shore, North and Northwest Suburbs and surrounding areas. Visit my website for detailed information regarding today’s real estate markets.    

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