New HOA Rules Change The Way a House is Sold
On February 2nd, there will be new procedures when it comes to selling a home that is located within a Home Owner’s Association (HOA.)
Until then, we will continue to use the standard HOA Addendum that is part of the purchase contract when the property being transferred is part of an HOA.
In the past, this document was typically completed and submitted by the buyer as a part of the contract, defining such things as who would pay specific fees related to the transfer of property. The problem with this is that without investigating the HOA, it’s difficult for a prospective buyer to determine how much those fees will be.
Consequently, buyers frequently submit their offer without knowledge of facts that would enable them to make an informed decision.
– Holly Esligner, ABR, CRB, CRS; Chair – 2014 HOA Workgroup; 2010 President of Arizona Association of REALTORS®.
Any buyer should know, before they submit the offer, what the true costs to join an association would be, whether there is one association, two, or in rare occasions, three governing associations on the subdivision (Grayhawk would be an example of this.)
The new form will change this. The revised HOA Addendum will now be generated by the Seller, just like the Seller Property Disclosure Statement. When someone offering a home for sale lists their home, it will be their responsibility to provide information about the governing agencies of the HOA as well as the costs associated with selling the home and include it with the listing on the MLS. The buyer will still be able to propose which parties will be responsible for the fees, but now they’ll know what the true costs are before making the offer.
As a result of these changes, buyers will be informed in advance which will help alleviate the problem of unexpected fees prior to closing which often kill the sale of the home and cause headaches for everyone.