The 5 Most Important Things to Consider When Buying a Home in an HOA

  1. Financing. What are you approved to borrow? Get pre-approved before you start your search.  Get the approval in writing. The approval should be from the lender that would make the loan, versus a broker or a lender which tells you it looks like you could get the loan.
  2. Neighborhood and the HOA.  Seek to buy in a stable or improving neighborhood with a financially strong HOA.  If the HOA is just getting started consider risks to you if the development stalls.  Become familiar with the HOA.  Check its balance sheet and website (if any).  Does the HOA have assets?  Check out the HOA to see what its purposes and services are. Review the restrictions, covenants and rules you are to comply with.  Look at a few homes in the community and decide if you are comfortable there.  Watch out for incurable location defects–like railroads and nearby smells, noisy freeways or streets, property that backs to nearby parks and shopping. 
  3. School quality.  Even if you don’t have children, consider the impact on resale market where public schools are of poor quality.  Market value appreciation will also be held down.  Contact the local school district.  Be wary if less than 75% of high school students graduate high school in 4 years.  Useful tools to determine if the neighborhood is located in a good school district are and
  4. Price. Check for comparable sales in your neighborhood/HOA of choice.  You can do this on the internet ( or other websites) and/or with your real estate sales person.  By adding or subtracting value for pros and cons, you can arrive at an informed purchase price.
  5. Physical condition.  Once you find a home you would like to buy, make your purchase offer contingent on (1) you and the home qualifying for a loan and (2) your approval of a professional inspection of the home.  Join the inspector during the inspection.  Then you can discuss defects discovered and their repair cost.  Consider an energy audit and specialized inspections depending on the home and location.

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