Homeownership still remains a major life goal and milestone for many people. However, when purchasing a home, it’s important to pay attention to the community you’re buying in. In some cases, you might be buying a home that’s located in an area with a homeowners association, or HOA.

With an HOA, your homeownership costs are likely to increase because you will be expected to pay a monthly fee in order to cover the costs of certain amenities and services. And if you don’t pay HOA fees, it could lead to being evicted from your own home.

7 Questions to Ask Before Buying a Home With an HOA

Before you buy a home with an HOA, here are some important questions to ask.

1. How much are the HOA fees in this community?

Every community has its own fees and ways to set fees. Your first question should center around how much are the HOA fees, and how are they assessed.

In many cases, HOA fees are charged on a monthly basis, based on the amenities and services provided. For example, you might pay only $100 per month in some communities, but pay more than $1,000 a month in other communities.

When buying a home, you need to figure the HOA fees into the cost. When applying for a loan with a company like Reali, don’t forget to think about the HOA cost. This could reduce how much you can actually afford to borrow.

Related: Should Your Next Home Have An HOA?

2. What do the HOA fees cover for residents?

Find out what amenities and services the HOA fees cover. If your community has a clubhouse and pool, the fees likely cover the maintenance involved in the upkeep. Additionally, some communities include yard care services and snow removal services. In these communities, the HOA fees might be higher, since the homeowners association is providing more services.

Make sure you know what amenities and services are covered so you can determine whether paying the price to live in the community is worth it to you.

3. What’s the history of the HOA raising fees?

Because HOAs can raise fees, it’s important to have an idea of the history of these fee increases. Ask for a history of recent HOA fees and increases. Get a feel for how often you might see your fees go up — and the amount of the increase.

You should also ask about special assessments. Rather than an increase in the regular fees, a special assessment is a one-time fee that is charged for upgrades or other circumstances. Find out about the history of special assessments, since they are costs added on top of the fees. If the HOA tends to levy several special assessments in a relatively short period of time, that could be an indication that buying your home in the area might cost more than you thought.

4. Does the HOA keep a reserve fund?

Learn whether the HOA has a reserve fund for ongoing maintenance and repairs. Taking a look at the financials and finding out if the HOA manages its money in an efficient and responsible way can help you decide if you want to be involved.

An HOA that has a reserve fund is less likely to need as many special assessments. Additionally, good financial management might be a sign that the HOA has an eye on the future and that proper planning is one of the values observed. When an HOA is on top of ongoing maintenance and repairs, things tend to be less expensive in the long run, and upgrades are made regularly, rather than at a time when things are necessary — and more expensive.

Related: Items You Need to Budget for When You Buy a Home

5. How does the HOA decide how much money to keep aside?

Find out how the HOA decides how much money to keep aside for repairs. Also, ask how the HOA decides on its fee amounts and how it determines its special assessments.

The answer to this question can help you decide how much you trust the HOA. Some homeowners associations make it a point to hire an expert to analyze the situation and help set fees and provide recommendations for creating a reserve fund.

Find out if the HOA has a qualified financial officer to perform these assessments, or if they hire an outside expert. No matter which path the HOA chooses, the important thing is to find out if the HOA is getting solid information on which to base its decisions.

6. Are there optional HOA fees?

In some communities, there might be optional HOA fees.

For example, you might be required to pay a base fee that covers the cost of trash removal, upkeep on the clubhouse, and a security guard at the gate. However, some of the other services, like yard care and snow removal, might be optional. You can choose to pay these fees and receive the services.

However, you should note that if you don’t pay for the optional services, you’re responsible for making sure that your property meets the standards set by the HOA. This can include properly trimmed grass, having snow removed from your sidewalk by a certain time of day, and other requirements. Paying for the optional services in your HOA fees can ensure that your property always meets the criteria and you don’t end up with a fine.

7. What happens if I can’t pay my HOA fees?

Find out from your homeowner’s association if they have a payment plan or some other way to make the fees more affordable. It’s important to note that HOAs do have the power to evict you from the property if you fall too far behind on your fees. They can also place a lien on your home to recoup the fees.

Before buying a home with an HOA, make sure you know the payment schedule for the fees, and you know what options are available if you run into trouble and can’t pay your fees.

Related: How to Buy Your First Home


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Final Thoughts

Before you buy a home in an area with a homeowners association, make sure you understand what you’re getting into. An HOA can provide amenities and services and some homeowners like living in these communities. However, depending on where you buy, HOA fees can be expensive. Carefully consider whether it makes sense for you before committing to living in one of these areas.


  • Miranda Marquit

    Miranda Marquit is a nationally-recognized financial writer and money expert. She has contributed to NPR, Marketwatch, Yahoo! Finance, U.S. News & World Report, FOX Business, The Hill and numerous other publications. Miranda is an avid podcaster and writes about money and freelancing at her website, MirandaMarquit.com [http://mirandamarquit.com/]. She lives in Idaho and loves reading, board games, travel, the outdoors and spending time with her son.