What is an HOA?

If you are looking to purchase a home in the Mid-Missouri areas of Boone, Callaway, or Cole County, you will probably run into homes during your search that are a part of an HOA. You should understand exactly what this means so that you can decide if this is something you want and ensure you don't run into any unpleasant surprises down the road.

What is an HOA?

HOA stands for Homeowners Association. Simply put, it is an organization that makes and enforces rules for the properties and residents within a particular area. When you purchase a property within the boundaries of an HOA, you automatically become a member of that HOA and are required to pay dues known as HOA fees. You cannot opt-out. This is why it is important to know whether a home you are interested in is part of an HOA or not. HOA fees are often paid monthly or yearly and the amount may vary based on several factors. You should also know that HOA fees can change from year to year, depending on operating expenses and what the HOA board decides is necessary. 

You will often find HOAs that are run by a property management company. However, they will also consist of a board of volunteer members who are elected from the community that holds regular meetings in which members can attend. The structure and operating procedures from one organization to another can vary, so don’t be afraid to ask questions to gain a better understanding of how the HOA in which you are considering operates. 

What does an HOA do?

Most of the time an HOA is established in order to help preserve and enhance the property values within a community. This can be appealing to many home buyers. You will probably find that most of the rules established by the HOA deal with the appearance of the properties within it. Issues such as the cleanliness and appearance of the exterior portion of each property are often addressed. You will find these rules in the HOA’s Declaration of Covenants, Conditions, and Restrictions (CC&Rs), which set the conditions for property owners regarding the maintenance and appearance of their property, as well as any other conditions which the HOA has established.

CC&Rs commonly include restrictions on items such as what type of fencing is allowed, the color of siding or paint you can use on the outside of your house, whether or not you can have a shed, and more. You should ask for an outline of the penalties for violating any of the restrictive covenants, which can include fees, forced compliance, and in some cases even litigation. Since you can be penalized, sometimes financially, it is so important to know what you are getting into before you purchase a home with an HOA. 

What will my HOA Fees Cover?

The answer is: it depends. Since each HOA is different, what your fees cover will vary. Most of the time HOA fees cover any upkeep and maintenance for shared community features, such as mowing and landscaping of common grounds. You will encounter several neighborhoods which offer extra amenities to their residents such as swimming pools, playgrounds, clubhouses, and athletic fields. These amenities will usually be funded through HOA fees. If you are looking within a condominium HOA, you can probably expect the HOA fees to cover basic building maintenance, landscaping and lawn care services, and snow removal for parking lots and streets (you should always confirm this, and never make any assumptions). Always make sure you understand not only how much you will be expected to pay, but what services your dues will cover.

What are the Benefits of Buying a Home With an HOA?

There are many benefits to owning a property with an HOA. Since the point of most HOAs is to raise and maintain property values, your property values within an HOA are more likely to increase over time because property owners are required to adhere to strict guidelines about the appearance and upkeep of their property. Many buyers are also drawn to neighborhoods with an HOA because of the extra amenities close to home. I know I was! Having a neighborhood pool is such a great part of living in my neighborhood and although I pay yearly fees, I find that they are totally worth what I get out of them. A word of caution; just because you see amenities near a home you want to buy does not mean you get access to them. Always clarify what you are entitled to before purchasing. Again, you should never make any assumptions. 

What are the Drawbacks of Buying a Home With an HOA?

The sometimes high HOA fees are often a deterrent for buyers. It is certainly something to keep in mind when you are searching for a home. Many buyers are also wary of HOAs because of their strict rules about things like fence material, house color, and sometimes even how many cars can be parked in your driveway. These rules can seem arbitrary, and many homeowners prefer not to have to deal with these restrictions. When you buy a home within a community with an HOA,  you accept both its rules and leadership, so be aware of the potential for corrupt or poorly run HOAs. If you are looking at a home with an HOA, it is a good idea to speak with some neighbors regarding how the HOA is run. 

Should I Buy a Home Within an HOA?

The only person who can truly answer this question is you. For some people, the idea of strict property guidelines is something they will happily adhere to in order to keep property values up. To others, the idea of having to follow stringent rules regarding their property doesn’t please them. Some buyers are fine with paying HOA fees and getting access to extra amenities, but others prefer not to spend the money and don’t find the fees worth what they get in return. The best way to decide is to consider your lifestyle and preferences, look at the pros and cons of owning a home with an HOA, and choose what makes the most sense for you.  

Find Your Next Home With Heartland Network-Mid MO

Heartland Network - Mid MO can help you learn more about local HOAs in communities throughout Boone, Callaway, and Cole Counties. Our team of real estate experts is familiar with what to look for and we know what questions to ask when it comes to buying a home with an HOA. We will be there to guide you through the entire process and will make sure you have a full understanding of the area in which you are interested in buying. Contact us today with any questions you may have!