Homeowners Associations (HOAs) have increased in popularity during the past two decades. What you may not be aware of is what’s involved in buying or selling a home located in a planned community such as an HOA, though. There’s an added layer of complexity involved in doing so.
What you need to do before attempting to sell your home
One of the first steps that you’ll want to take before attempting to put your home up for sale is to connect with your HOA’s treasurer to see if there are any upcoming costs you may owe or if you have any outstanding balances with them.
You may also want to dig up your HOA bylaws or consult with one of its officers or its attorney. You’ll need to see whether there are any procedural actions in place to transfer the property and your responsibility for paying dues to the prospective new owner. You may also want to ask whether the HOA requires a home inspection before you can close on your property.
Obligations you may have to your HOA when selling your home
Your HOA may require you to pay for a homeowner resale package highlighting all the rules, covenants and restrictions for the new buyer. These are the bylaws that they must agree to abide by before the closing. You may need to give them as long as three days to read over them before the closing or allow that same amount of time after it happens to rescind the sales contract.
The HOA may also require you to pay a fee to transfer the HOA paperwork and dues into the new homeowner’s name. Some HOAs charge a flat rate of as much as $275 to do this. Others assess between 0.5 to 1% of the home’s sales price. There are some instances in which an HOAs may charge a combination of both fees.
Many prospective homeowners appreciate planned communities and HOAs because they know restrictive covenants help protect the value of their Shelbyville home. A real estate attorney can help guide you through the Kentucky home selling (and buying) process to ensure that the process goes smoothly.