Step 14: Review the HOA documents

Many homes are located within a Homeowners Association that can help protect property values by making sure the neighborhood is well kept and a minimum level of maintenance is performed, while also taking care of common area items. Of course the flip side to maintaining the neighborhood’s character is that rules are set in place, usually with Covenants, Codes & Restrictions, often referred to as CC&Rs, and/or with additional rules and regulations. You should receive these documents from the escrow company, once they receive them from the HOA itself. After receiving the HOA documentation you have five (5) days to review it and note anything which you disapprove of and potentially cancel the contract. This opportunity to cancel and receive your earnest money back is within five days of receipt and depending on when the documents were received by you this can potentially extend longer than your inspection period.

Additional documents that might be worth investigating are HOA design guidelines, annual budget, financials, approved plant lists, association by-laws, and a reserve study which should be prepared periodically to set aside sufficient money for long term HOA common area costs. Obviously confirming HOA fees and any transfer fees, capital reserve fees, etc. for when you might sell in the future is also worthwhile. The scope of what’s included in the HOA fees themselves can vary greatly from one association to the next, so delving into those details is also a good idea.

Next: Fill out and return your buyer’s packet