What Buyers Need to Know About HOAs

Dave Jensen March 7, 2025

Home Owner’s Associations are not bad. But they are a governing entity and you have to know the rules of the area so you can be sure you’re able to do what you want. In many cases you’ll be just fine. But it’s one more part of the buying process. Be informed.

When you search for a home, you may find a property in a community with a Homeowners Association (HOA). Before you buy, do some good research. Understand how an HOA works, what they mean for you, and how that specific HOA is set up.

According to an article on REALTOR®.com,

“In a nutshell, an HOA helps ensure that your community looks its best and functions smoothly. The number of Americans living in homes with HOAs is on the rise, growing from a mere 1% in 1970 to 25% today, according to the Foundation for Community Association Research.”

An HOA is governed by a board nominated by those living in the neighborhood. It is designed to make sure the amenities are well maintained, the neighborhood residents abide by the architechtural standards, and manage the fees collected to maintain the value of the community. The guidelines are called Common Restrictive Covenants (CC&R),

“Simply put, CC&Rs are just the rules you’ll have to follow if you live in that community. Unlike zoning regulations, which are government-imposed requirements on how land can be used, restrictive covenants are established by HOAs to maintain the attractiveness and value of the property.”

It’s important for you to understand that each HOA is a little different, and they usually have fees (dues) each homeowner is required to pay (monthly, quarterly, or annually). Again, each HOA is different. These fees typically vary based on property size, number of residents, amenities, and more.

There may be additional fees charged to homeowners if the reserve fund for the HOA cannot cover a major or unexpected cost, like severe storm damage. The fees, however, also help maintain common areas such as swimming pools, tennis courts, elevators (for high-rise buildings), and regular wear and tear. Although they are an added cost to the homeowner, an HOA can be a major benefit when it comes to maintaining the value of your neighborhood and your property. The same article continues to say,

“After your offer to buy a home is accepted, you are legally entitled to receive and review the community’s CC&Rs over a certain number of days (typically between three and 10). If you spot anything in the restrictive covenants you absolutely can’t live with, you can bring it up with the HOA board or just back out of your contract completely (and keep your deposit).”

Most lenders will factor your HOA fees into your loan package, ensuring the amount of the loan is appropriate for what you can truly afford. There are some great benefits to having an HOA oversee your neighborhood, and it’s important to understand what fees, structures, and regulations will come into play if there is an HOA where you’d like to live.

Look at the HOA costs and consider the amenities that comes with that. And then consider the whole of the community. Your home is more than just shelter. And living in an HOA is not a bad thing. Millions of people do. Have a look at this quick read to see how the community and your next home are intertwined. More Than a House: The Emotional Benefits of Homeownership

Bottom Line

If now is the time for you to move, and you’re thinking of a given property, be sure you work with a professional who can help you understand the neighborhood’s HOA structure and fees. This way, you’ll feel confident and well informed when buying a home.