To HOA or not HOA?
An HOA — or Homeowners' Association — is an organization in your subdivision or community that creates and enforces regulations and rules for the properties and residents. If a property is part of an HOA's jurisdiction, buying it automatically makes you a member. Therefore, you are required to pay HOA dues that cover the organization's costs and services. The strictness of HOA rules can vary significantly from community to community, and while some are very restrictive, others allow a wide range of changes to your property. It's essential to check in to what an HOA requires, costs and offers in a particular community or neighborhood before purchasing a home. Contrary to fictional portrayals, an HOA can be really beneficial to the homeowners by providing deals on local services and generally keeping the home values constant or increasing by keeping the neighborhood the same.
In a lot of ways, you can think of an HOA like a homeowner's union. It gives you that collective bargaining power with larger agencies like utilities, city services and local governments. This power can save you a lot of money by getting members better deals on trash services or electricity, including landscaping with HOA dues and more. It's a well-known rule that the more you buy, the better prices you get. That means when a group of 50 homes is negotiating for a landscaping deal, they can get much better prices than if it's just one home. Don't feel like you're cheating the other business owners either. They offer lower prices because doing a bunch of things in one area lowers their overhead, and having a consistent client increases their overall profits.
Maintaining Home Values
The main job of any homeowners' association is to maintain property values. They do this not by restricting what you can do but by limiting what your neighbors can do. And yes, since you are a neighbor as well, you are also subject to the same neighbor restrictions. That means you typically can do whatever you want inside your home since that only affects you. However, you can only do things within a specific range to the outside of your home since that affects your neighbor's houses as well. The look of a neighborhood, especially neighboring homes, can significantly affect the value of a home and usually are outside the purview of the homeowner. HOAs seek to fix this by requiring that everyone keep their home up to the same standards and avoid practices that will devalue the neighborhood.
It's essential to understand the benefits and restrictions of living with an HOA, especially if you've never had one before. Your professional real estate agent will be familiar with or be able to get, the bylaws of any HOA that covers a home you are considering. Sit down and go over them together to ensure that those rules work with your preferred lifestyle.