I originally got my real estate license when my agent made more money on the first property I bought to renovate and flip than I did. There were a lot of lessons learned but one was that if you had a good product you could sell it. The listing agent spent a few hours on the deal and I spent most of a summer.
So, by the time I started another renovation I had my real estate license. Like the first property, this was an older condo/townhouse with a relatively high homeowners association fee…or at least that was my first impression and I didn’t mention it at all in my marketing. When I got a couple of negative feedback messages about the fees after showings I started investigating whether the fees where out of line.
I found out a couple of things. First, what a HOA provides for the dues can vary quite a bit. In this particular development the association had been mis-managed for a while and they had to play catch-up as decks and roofs started to require repair. On the other hand, some of the amenities…pool, tennis courts, club house, landscaping…where exceptional.
The second thing I noticed was that most agents totally ignored the HOA in the MLS write ups and promotional materials just like I had. Like me they probably hoped that HOA questions would only come up after the buyer had fallen in love with the home.
I concluded that the HOA information should usually be highlighted, not hidden. In some cases, it may contain the unique selling proposition you need. After all, the point of “condo-ing” is usually having access to amenities that might otherwise be out of reach. For example, for many individuals owning a swimming pool isn’t worth the expense or hassle. On the other hand sharing the expense with a few dozen other residents is reasonable and may include some social benefits beyond the ability to take a dip on a hot July afternoon.
For my particular project, it turned out the dues where very much in line with other older properties. Detached homes in similar external condition would eventually require additional investment or decline rapidly in value. My purchase price also reflected the condition. Even after my renovation the cost to the new buyer was less per square foot than new developments. In spite of the HOA dues the total cost of ownership was often still lower than the newer developments or a detached home.
The take away is that as a listing agent of a property with HOA dues, you should anticipate the objection to a fee by demonstrating the value. Those that aren’t interested in the amenities and the protections of an HOA are unlikely to buy anyway. It will appeal to many, including empty nesters and busy professionals without the interest or time to maintain external landscaping or amenities like swimming pools.
Are your experiences with HOA’s similar? Please share your experiences in the comments.