Everyone loves low HOA fees

Sales pressure vs. responsible, realistic HOA fees. Your unit fees can be a selling point for your homes!

This week we helped one of our developer clients deal with a common challenge in the sales phase: a prospective buyer that was looking at another property with lower HOA fees. Really low fees.

Developers and real estate agents cringe at these questions! Buyers see a wide range of HOA fees, even for very similar properties. Buyers focus a lot on HOA fees, even though they are a small part of their home costs. You can turn this question into an opportunity to show the quality and integrity of you and your product.

Responsible builders provide responsible budgets.   Fees that are artificially low can mean trouble for buyers and builders.

Here’s an example of an HOA fee comparison of similar properties, with big fee differences. Most buyers would think the $30 option is better…until they can see what’s not included, and will need to be covered.

For a condominium or common interest property, there are legal requirements that have costs.  There are also operating and maintenance costs that keep dues payments on track and HOA services going.  Are these requirements adequately represented in budgets?

Statutory/legal:  Insurance, state business registration renewal and condo filings, shared maintenance, reserve contributions for long term common maintenance, backflow inspections, required reserve study updates, tax filing. 

Optional but important:  Financial management, costs/method to bill and collect owner fees, vendor payment, and more; shared services like garbage and landscape care, shared utility billing and distribution to owners.   Depending on the property, there may be other important shared costs. 

You can educate buyers to be aware of what is included in HOA fees, and whether the fee is artificially low to look attractive.  If the actual expenses to run the community are not in the budget, it will be up to the owners to figure out community operations and costs later.  That will be frustrating and expensive.

At MicroHOA, our background is development of small HOA communities. We have been where you are! We can help you prepare for issues like these, and make the HOA part of your project go smoothly. Contact us at info@microhoa.com.