REGISTER FOR MORE INFORMATION
Did you know that homeowners association (HOA) fees are the number one objection to buying a condo? Does the term “HOA fees” give you pause, either because you don’t want to sell them, or don’t want to pay them? In episode 7 of Condo Artist: The Other Side of Real Estate, condo sales specialists Uri Vaknin and Mark Bunton break down exactly what HOA fees are in condominium buildings, why they carry so much value for the homeowner, and if you are an agent, how to sell them to your condo buyers! You’ll learn:
Join Uri and Mark for a detailed discussion of HOA fees that will demystify the concept for anyone involved in a condo real estate transaction!
This episode is brought to you by Juhl Las Vegas, loft-style condos located in the heart of vibrant, downtown Las Vegas. From the low $200s to over $1M. Learn more at JuhlLV.com.
This episode is also brought to you by One Las Vegas, luxury high-rise condos featuring two and three bedroom plus den residences. From the mid $400s to over $1M. Learn more at theonelv.com.
Subscribe to Condo Artist: The Other Side of Real Estate on Apple Podcasts, Spotify, and Google Podcasts.
TRANSCRIPT:
Uri Vaknin 00:16
Welcome to another episode of Condo Artist: The Other Side of Real Estate. I’m your host, Uri Vaknin, a condo sales strategist who has developed and sold out thousands of condos in Atlanta, Las Vegas, Florida, Detroit, Texas, Nashville and all across the United States. Each week, I along with my co hosts and colleagues, Mark Bunton, Hello, and Shahn Douglas, who’s not with us this week, we’ll bring you the latest insights, best practices and sales techniques to sell out more condos faster, no matter the market. At times, we will delve into architecture, design and urban planning, as they pertain to condos and condo living. I am an admitted podcast junkie. But in our search for podcasts about condos, we all realized that there really weren’t any out there. Throughout the series, you will get to know more about me, Shahn and Mark and our 53 years of combined experience in the world of condos. One of the things that has become glaringly obvious to us is that most people, including real estate agents, buyers, architects, and even condo developers, don’t fully understand condos. This podcast will pull back the curtain on the world of condos. This week’s episode is “Demystifying the Condo HOA.” So Mark, you know we always hear the number one objection when people are looking at buying a condo is are the condo HOA fees.
Mark Bunton 01:51
Right? Exactly.
Uri Vaknin 01:53
They don’t get it. They don’t understand condo HOA and most often, they are turned off by the fees. So in today’s episode, what we want to do is demystify and kind of debunk sort of the negative connotation that people associate with the condo HOA. Because what do you like to always say Mark about the condo HOA.
Mark Bunton 02:14
The HOA is the backbone of a condominium community.
Uri Vaknin 02:17
Exactly. So when you’re buying a condo, you’re obviously buying real estate, but you’re buying into a condo homeowners association, and which is an actual legal Corporation. So you really need to understand what you’re buying into correct, Mark? Yes. And this week, we’re going to talk more high level. And next week, we’re actually going to have a guest on a Community Association manager, that’s what they’re called here in Las Vegas. In other words, that HOA manager in most other places, and she is going to give us a real sort of in depth understanding of, you know, the condo associations, and all the legal documents around it, and the financials and all that. But today, I really want to go back to my beginning, in my career in real estate, you know, when I was actually before I even got my real estate exam, I knew that I was going to go into selling condos, that was going to be my specialty. And Mark, Shahn and I we all started off back in Georgia in the early 2000s. With a company called The Condo Store, you could have had a better name than that. And while I was taking my real estate exam, or not real estate exam, before I took my real estate exam it was you’re taking the course every weekend, I would go to different sales centers, and I wanted to be a condominium specialist and selling condos. So what I did was I learned everything I could about each buildings Hoa. I went to to learn their fees. I wanted to learn what their fees included, and how strong their associations were everything about them so that when I went so that the day that I got my real estate license, I could pitch myself as a condominium expert, which I did. So, you know, I tell that story. Because if you’re a real estate agent and you’re listening to this, one of the first thing you could do is really learn about each of the HOA is. Now mark. This is where you really come in and come in strong. This is something that you’ve been doing, you know, for us, you know, here in Las Vegas, but actually all throughout the country when we’re selling condos, and what we’re trying to do is, you know, trying to compare ourselves or the communities that we are selling to other condominium buildings. And recently you actually did a really cool project because we like to always stay up to date you know, things change in the road of condos Hoa has changed and we wanted to figure out Where we, where our buildings stood in relationship to our competitive properties? Why don’t you tell us a little bit about the two of the projects you worked on?
Mark Bunton 05:10
Recently, we put together a, I guess a synopsis, you’d call it of various high rises that are in Las Vegas. And we were able to collect information about each of these high rises using MLS and MLS documents that we were able to order that gave us a fairly accurate picture of what we were up against as far as where the communities that we sell, they stand in relation to our some of our competition, and how we can use the that information
Uri Vaknin 05:46
to our advantage. So one of the things he said was MLS is a good place to start. But it doesn’t always have the best information. What do you mean by that? And by MLS, you know, about hundreds of websites feed off of MLS, so whether you’re a buyer, you may be looking at realtor.com. But if you are, you know, an agent, you’re actually probably using the MLS or commonly known in the United States for our international listeners. And I know we have some international listeners out there, that Multiple Listing services, which is where all agents in a community come together and list their properties,
Mark Bunton 06:27
right? MLS. Those services are typically driven by individuals, individual agents who enter their listings into MLS, in order to give them exposure, not only to other agents, but as you mentioned, they get shot out all over the internet. And some of the information in there is accurate. And sometimes it’s not a lot of times I’ll look up information for one particular community and see differing, I guess, a different different data for one building, you know, as far as, as what’s offered what’s included, you know, even contact information. So I take that information that I find in MLS and, and use a little bit of brainpower to make sense of it.
Uri Vaknin 07:17
Where do you use it? So you’re right, so MLS is a starting point for you. Or if you’re a buyer, you know, like realtor.com, but it’s not always correct.
Mark Bunton 07:28
MLS is a good place to start. Of course, everybody knows that MLS is driven by individuals, individual agents who have their listings, they put them in there into MLS, to gain exposure, they get shot out all over the world wide web for pretty much everybody to see across the whole world. And looking in the information in MLS, I’ll go and look up, you know, one particular community hoping to get some insight into what’s going on in that in that community with the HOA. And a lot of times I’ll find that the information will differ from listing to listing. And that’s, I’m not sure how that happens, but it does. And I would take any information or I do take any information that I get from MLS with a grain of salt. And and as I take a look at the information that I find in MLS it’s, I can tell that it’s not always correct, the information differs from listing to listing. And one of the drawbacks from finding this information in MLS is that there’s no way for me to find out how MLS fees are calculated.
Uri Vaknin 08:38
You mean, HOA fees? Correct? No, that brings up a great point. So a lot of people are under the misconception that all HOA fees are based on square footage. So if you live in California, actually, by law, it can’t be based on square footage. You live in California, everyone pays an equal amount for each of the amenities. And then there’s a separate calculation for the square footage or the size of your home, whether you want two or three bedrooms, but in most states, and in most condominiums is actually based on a price per square foot basis. So a lot of times people say oh, the HOA fees are 50 cents per square foot. What does that mean? If you’re a buyer, that means that if you have a if you buy 1000 square foot condo, your HOA fees are gonna be $500 a month. Simple as that. But it’s not always that simple. You know, sometimes buildings have a different formula for figuring out the HOA fees. So you bring up a really great point about MLS is that MLS doesn’t tell you the whole story, right? But you’ve got to dig deeper.
Shahn Douglas 10:02
This podcast is sponsored by Juhl Las Vegas lifestyle condos located in the heart of vibrant downtown Las Vegas, featuring a variety of floor plans including flats, two storey Lofts, brownstones and penthouses as well as an amazing variety of amenities, such as full service concierge resort Pool and Spa, wine deck and Co Op working space, live the life you deserve, at jewel Las Vegas condos from the low to hundreds to 1 million. For more information, visit us at juhllv.com. That spelled JUHLlv.com.
Uri Vaknin 10:54
This takes us to the next step is, you know, what you really have to do if you’re a buyer, or if you’re a real estate agent, is to really understand one, how the HOA fees are calculated. And then to and most importantly, for everyone involved is what’s included in your HOA fees. That’s really at the end of the day, what everyone wants to know. And sometimes what you have to do is you don’t be scared off by a higher HOA fee in one building than another. Because what do we know Mark in one building? They may include more services, or more amenities, or include more of utilities built into the HOA fees than another?
Mark Bunton 11:44
That’s exactly right. And then and that’s and that’s where getting or having the knowledge is exactly what is included in your HOA
Uri Vaknin 11:53
helps. Exactly. And so typically, MLS says what’s in the HOA fees. But as you said earlier, it’s not always correct, because it’s based on user input. And we know user input is not always correct. So it’s really key to try to figure out, you know exactly what to include in the HOA feeds. Right. Right. And then what’s interesting, so in your recent analysis that you did, you came up with, you know, you have two separate sections, there was the HOA fee, then there was the second Hoa fee in some cases. And then there was the mat or two third section, a master Hoa fee. And that is something that we people really need to understand to don’t just don’t get what the HOA fee is looking at if there are any other fees that are going to be associated with it, which are going to be your total Hoa fee. And we’re going to really kind of get into more of that detail when we do talk to our Community Association manager to really look at all those different things. But what you really want to know is what’s your full dollar amount is per month on your homeowners association fees, right?
Mark Bunton 13:07
Correct. And it’s good to know that going in because your lender will definitely take a look at that.
Uri Vaknin 13:13
Exactly. Because it also helps in a lot of older condo buildings. But we have seen you know, by older I mean from like the 60s and 70s is that oftentimes the HOA fees are almost all inclusive, because they didn’t meet her as much they didn’t meet her separate electrical, they didn’t meet separate gas meter the water and they just sort of some like lumped it all in into a to a fee, and sometimes often went with apartments too, if not apartments with conversions, meaning something that was maybe built as an apartment building then later converted into condos, you may have a higher Hoa fee, because a lot of things may be lumped in. So what I always like to say to buyers is don’t be scared off at first by the actual dollar figure or the price per square foot. First find out what that fully includes. Right, right. So I know you hate when I tell stories, but this reminds me of one of my favorite stories. Back in the day. Remember when we were selling the Artisan in Atlanta, Georgia, and Decatur, Georgia, remember that? And so we had a really big floorplan share, and we had a lot of great amenities in that building. And one day, it was really funny. I was literally being shopped and it’s for those of you who don’t know what shopping means it’s when you’re selling a property and either a competition, another developer or someone comes to your property and acts like they’re buying, but they’re really there to like see your product and see how well you do or see the pricing or to learn whatever they they did know. And like the top Real Estate Attorneys in Atlanta At that time, actually did not get the business of writing our condominium documents in other markets called CC and RS, which will go into way more detail about that. And so the, one of the partners of the firm who I knew came to the property, and I know what she was trying to do was trying to win my business, you know, to be able to do all the closings. But while they were there, and I so this is a whole nother side, you know, I digress here. But you know, if you’re being shocked by someone, show off, do your best, because out, I can tell you, I have actually sold to shoppers, whether it’s another developer who became excited about our community, or in this case, I actually sold the second most expensive condo in the building to this attorney. And so they were shopping me to learn about the building, and to show their interest in order to try to win the business. But I could tell at some point during the presentation, there was a shift where they became really interested. And they just become empty nesters. And what was funny was, so I was telling them all about the property. And they they were living in a single family house, a beautiful single family house that I had not yet seen. But from when they from the registration card, when I took their address down, I knew the street that they were on. And I knew what kind of houses were on that street, there were houses, beautiful houses, typically from 1920. They all had like these beautiful tile roofs. And they all had like two acre lots. So I knew kind of what they were coming from. And so, you know, it’s telling them everything about the property that we’re all excited. And the husband said to mate, worry, before we go any further. I want to know, what are the HOA fees on this home that we’re interested in. And I said with pride and conviction, I said they were $845 a month. And he literally we were sitting on a table, put his hands down on the table and lifted himself up and said we can end the presentation right here. And I said, I chuckled, he goes, why are you laughing? I said, because it’s funny, because, you know, I get this reaction a lot. Actually, we get the reaction all the time when people are moving from a single family home into a condo, and especially a larger condo, you know, with what HOA fees are. And so I just said, let me ask you a couple of questions. I said, You know, I know your house, you have a beautiful home, I should I pay about $200 a month for my landscaping. You must pay, you know, that house and that lot at least $400. He goes, I wish he goes. We pay $600 a month for landscaping. I like oh interesting. I said, and I know you’ve got a pool. And I said when I had a pool, I was paying I think $125 a month for pool service. And he goes again, I wish I pay $150 a month and I said you know, you probably pay $150 for your cable and internet. He said I wish. And then he looked at me he goes 40 I understand what you’re doing. And I said, I’m not doing anything. I’m just breaking it down. And when you break down the HOA fees for buyers, they really get it don’t they Mark?
Mark Bunton 18:45
Most of the time? Yes.
Uri Vaknin 18:47
I mean, you know, as long as they see value. And so the whole point of this exercise was to break down value, right? I mean, break down and show them value. And we’ve been very successful doing that here in Las Vegas. We’ve been, you know, one of our properties, basic cable and internet is included with the HOA fees. And what’s great is because we are, you know, two tower community with 359 condos, we get a really great rate that a buyer can’t get on their own. And so when you really start to break down the HOA fees for buyers, they really begin to understand, you know what the value is, and with this one buyer particular, I even went on further and I said, You know, I love your clay tile roof is so gorgeous. I said I hope you you’ve never had to replace that. And he goes, four years ago we replaced it I said our must have cost about $20,000 he said try again $40,000 and I said wow, these $845 HOA fees are sounding really, you know kind of interesting right now, aren’t they? And he goes actually already you know I hate to say this, but They’re kind of right. This does make sense. Until I tell the story a lot, because you know, this, when you’re number one objection is our HOA fees when buying a condo, it’s really important for both the agent to understand how to, quote, sell it to the buyer or the prospective buyer. But it’s also really important for the buyer to understand exactly what’s included. And what I like to do is literally sit down with the buyer, and break down the actual costs of writing exactly what’s included, and compared to what they spend now, and then say, Okay, now, not only you’re not paying for it, but you’re not even dealing with it. Someone else is dealing with it. You know, someone else is taking care of all that.
Mark Bunton 20:54
But But you are paying for it through the HOA fee, though, right?
Uri Vaknin 20:57
Right you are you’re right, but you’re paying for it, but you’re not paying individually for it at these higher rates that if you would on your own, you know, because it’s just like, you know, any type of insurance, the more people who pay into it, you know, the less it is. So oftentimes, you know, that’s a good point you bring up Ark is smaller condo communities, HOA fees might be slightly higher, because there are fewer people paying in. So it’s interesting to look at that. But let’s talk a little bit about what you also discovered in that analysis that you did, um, where HOA fees are all across the board, from what 42 cents all the way up to? Well over $1 square foot. Right?
Mark Bunton 21:39
Right. So something that we did find out was what One Las Vegas and Juhl were two of the most affordable HOA fees in the city of Las Vegas for high rises, which was great news. Well, I love that. Um, but But did you know after looking through MLS, we decided to dig in a little bit deeper. And we actually spent a little bit of money and ordered condo docks from I think it was five or six different communities that are high rises in Las Vegas that are we see as competition for us. And you know, we went online did a little bit of investigative work, find out who the HOA management for each of these communities is, which was not really an easy thing to do. It took a little bit of homework. And once we found out that information, we went to that that management company’s website and order some condo docs, and then we sat around and wait for about seven or 10 days. And those condo docs, were delivered to our email, you got a copy of them, I got a copy of them. It couldn’t have been easier. And we open those up and you know, took a look at them. And we looked at things like, you know, like you were saying what is included in your monthly Hoa fee? We took a look at, you know how much somebody paid for that per month, and how the HOA fees are calculated? Were they calculated on a per square foot basis or something different. We also took a look at, you know, the reserves and what what condition were they in? Were they fully funded? And if not, where were they? And,
Uri Vaknin 23:17
Mark, I know we’re going to go into this next week, but give an overview of what reserves might be
Mark Bunton 23:23
reserve funds. It’s money that is collected through HOA fees and a certain amount of that money is put into we’ll just call it a condo HOA savings account. And it sits there for a rainy day. And if, for example, you know, something happens to the roof of your condo community and it’s deemed that a replacement is needed, instead of a special assessment or somehow coming after the homeowners for that money. The money’s already there and been put aside month after month, year after year in the condo savings account or as it’s actually known as reserves.
Uri Vaknin 24:00
Awesome. Well, and we’re gonna get way deeper into that in our next podcast but I think it was important for our listeners to get an understanding.
Mark Bunton 24:08
In addition to that, I think the HOA Doc’s are also able to tell us if what type of rental restrictions if any, there have been placed on the property. Yeah,
Uri Vaknin 24:19
that is a great point, Mark, because a lot of people in many, many types of markets, whether it’s a resort market, which Vegas is somewhat of a obviously a resort market, in many cases, you really want to understand, you know how many actual homeowners are in the building on how many second homeowners but you can’t always tell second homeowners but you can always tell how many renters that they allow. Because this is important to some people they want to live in a community that is really more about, you know, owner occupants as opposed to renters, correct?
Mark Bunton 24:54
That is correct.
Shahn Douglas 24:58
This podcast is sponsored by One Las Vegas, luxury high rise condos, featuring two and three bedroom plus den residences, starting from the low four hundreds, located on South Las Vegas Boulevard, just minutes from Allegiant Stadium, McCarran International Airport, and the famous Las Vegas Strip. Discover your own private Oasis with unparalleled amenities, including resort Pool and Spa, full service concierge to story, state of the art fitness center, tennis court, dog parks, plus much more, visit us online today at theonelv.com or call us at 702-405-9020. Call One Las Vegas home today.
Uri Vaknin 25:54
You know, the other thing we really looked at was what a lot of these different buildings offer and you know, whether you’re a buyer or your real estate agent who as a buyer, you have to understand what is it that you want out of your HOA fees. And out of your HOA a lot of people,
Mark Bunton 26:11
one of the one of the other things that we looked at there was was to review the demand statement, which was a is basically a summary of any type of discrepancies or delinquencies that’s going on in the building at that particular snapshot in time when the when the HOA documents were put together. And a lot of the buildings had really encouraging demand statements, and some of them didn’t. Well. And so what is
Uri Vaknin 26:37
really alluding to is talking about people who are delinquent or paying their HOA fees. And this is a really important by concept idea. Because you can always tell, you know, if people are going to go into foreclosure, I say, if someone is more than three months delinquent, or their HOA fees, there, there’s something wrong. And so what’s been really cool to see and most buildings here is that the strength of the HOA is in which the lack of delinquencies that they have, these are really important things to look at. But also, so if I’m a buyer, you know, there are some buildings which have much higher HOA fees, but they offer some incredible services like valet parking. But I don’t, for me valet parking sign portal, I don’t want you in parking my car. But in some buildings, you either have that way, parking that you’re required to park valet, and other buildings, you could either Park valet, or you could park on your own. But for a lot of buyers, you know being forced into valet is not necessarily how they want to live. For other buyers it is. So it’s really important to understand that and if you want if you do have valet parking in a building, I can assure you that your HOA fees are going to be much higher. Keep in mind that anytime you have more services that are actually run by individuals, it’s going to be more expensive, because you’re paying for labor costs. And labor costs are typically some of that highest, or the largest component of any Hoa budget.
Mark Bunton 28:18
Besides besides valets, what might some of those be,
Uri Vaknin 28:21
um, you know, if you have, you know, in some buildings, what they have are 24 hour concierge, which is great to have for some people, but they some of them may also have a door person, plus a concierge, which adds additional costs. Obviously, one security, you know, security gets very expensive. And so for a lot of people, and especially for a lot of you know, female buyers, the number one reason that they choose to buy into a condominium is for that sense of security. That is one of the top reasons we hear, right people want to live in a building. And so for them, they may be willing to pay a little extra in order to ensure that they have sufficient security in that building.
Mark Bunton 29:09
Right? How about cleaning services in the building and cleaning companies? And how about Hoa management? You know, even lifestyle directors that you know the buildings have those that money’s all comes from the HOA, right?
Uri Vaknin 29:23
I mean, so you bring up a really interesting point. So it’s a lot of larger buildings almost always have on site, hoa management, garden style condominium communities, meaning sort of maybe the two storey sort of suburban type of condo communities may not often have an on site manager, you have to decide if if that’s important to you, do you want on site management? Um, I would prefer to always have on site management when he
Mark Bunton 29:54
definitely
Uri Vaknin 29:54
yes, and so you know, but that actually adds to the cost as well too. But these things, you know, you know, they had there’s a value to them. But then the other thing you know, you want to probably look at are the history of increases in the HOA costs. And guys out there guys and women, everyone out there, our listeners, this is really important to understand Yes, HOA fees will increase like everything else increases in cost if if health insurance costs increase, HOA fees are going to increase, you know, if minimum wage increases, or obviously HOA fees are going to increase, there will be increases, what you want to make sure is that your increases and your HOA fees are somewhat in line with what you know consumer price index increases are, if they’re wild increases, there’s something up and you really want to understand and look at the budget. And we’re going to go more into the HOA budget, you know when we speak to our professional Community Association manager in another episode, but it’s really important to kind of fully understand, you know, the HOA that you’re buying into. And in every market, you know, you’re always given access to the HOA documents. in some markets you are, you have to receive what you refer to earlier mark is to condo docks, some people call them CCNRs, you know, sometimes they’re called a public offering statement, if they are a new condominium. In Las Vegas, if it’s a resale condo, it’s called a resale package. Everyone is given those, and they’re required to be given them depending on you know, your the laws of your state or municipality at different times. But if you are a buyer, make sure you receive that and make sure you read it. I know sometimes they are very long, but you really need to read them. What I did when I worked with individual buyers, is I would actually have a printed out copy because now you can in most places, and I think almost all places now they can be sent to you digitally, which obviously we prefer because they’re not as scary as when you print them out. I worked on remember the W Hotel and Residences in Atlanta, downtown Atlanta, Georgia. Yes, the HOA documents were 1100 pages long. Because it was a condo that was part of a master association that included a hotel and retail and restaurants. And so not only was there a homeowner’s association, but there was a master Association. And there were other associations that although you didn’t pay into, you need to know about them as well. And so those were very long, but what I like to do is actually have a set of the HOA documents and if applicable, the master Hoa documents printed out. And then based on I mean, obviously, there’s certain things that you always want to highlight with your buyers. And I literally would take out a highlighter and highlight it beforehand. I obviously have, you know, post it notes or whatever on the pages that I want to refer to. But if I know that my buyers have pets, what am I going to do to mark make sure that they know about the pet rules and regulations? Exactly. I mean, if they have three pads, and if they can’t have any more than two pads, obviously, this is not going to be the condo for them. And that’s another really interesting important thing. If you’re a real estate agent, you want to know these things before you start showing your clients, you know certain properties because if you go down the road, they go under contract, and they reengage away fees and they find out that they can’t live there for whatever reason because the HOA fees precluded, you’re kind of screwed to say that you know, and so that’s another reason to become an absolute expert on you know, the most of the condo buildings in your area. become an expert on you know, their Hoa is. So what I do is I sit down with my buyers and I highlight everything if they tell me that they are going to renovate the condo, guess what I spent time going over with them.
Mark Bunton 34:45
The ARC application
Uri Vaknin 34:47
with that name Mark, you can’t you can’t throw out acronyms like
Mark Bunton 34:50
that. What is it the architectural review committee
Uri Vaknin 34:54
right on? Yes, why could the architectural review committee Now it may be called different names and different communities. But most of the time, I seen it as an architectural review committee. And so it clearly lays out what you have to do if you want to make any changes. And oftentimes, there’s some changes you can’t make in a building. And so or you have to, if you want to put in new flooring, you have to put in some flooring. So you want to go over all those types of things. And then also, you know, you want to go over? And do people ask the question like, Well, you know, can they raise my HOA fees overnight. And so you might want to highlight that section of how HOA fees are raised. And so these are what you really need to do both as a an agent, and as a buyer, or prospective buyer is really read those HOA documents, CCN, ours, public offering statement, resale package, whatever it may be called, and your community, but really, really review it and make sure that you know that that a good fit. Exactly. It’s a good fit. Thank you That’s searching for the words. And so that is one of the number one things you need to do. So you need to understand what the HOA fees include. You need to understand what I’ll call it the strength of the HOA, which refers to what you talked to earlier Mark about the reserve study, also how much money the HOA has in the reserve fund, but then also how much they have in the operating fund, which we’re going to go into depth with our Community Association manager. And then you also want to make sure that you review the HOA document CCNRS or whatever, to make sure that it’s a good fit for you to live in that community. Otherwise, you know, you kind of move in and then you’re like, Well, I didn’t know this, you know, buyer beware. But I think
Mark Bunton 36:57
I think some of the HOA documents that I read recently even went into detail about how the money could be spent on just services to the building itself and what had to happen before that money was spent. If it was over a certain amount if it was below a certain amount, all the information that you need to know about how your HOA fees are going to be used are in those documents. Why? Why would you not look at them?
Uri Vaknin 37:27
Well, if you said a couple of days ago, smart buyers examine all the HOA docs. And I think that the main thing that we want to get across to all our listeners today is that you really need to go through them with a fine tooth comb to understand it. And you also want to understand, you know how the boards are made up with the election processes. I know that is the most boring part of the HOA documents, but at least have a basic understanding of how many people on the board how long they’re the board and how they’re selected. Every state is different. Every state has their own separate laws as it pertains to Hoa and one of the things you need to realize an HOA is an actual Corporation. And when you buy into a condominium, you are buying into this corporation and you are a member of that Corporation. And, you know, back to you know being a member of a corporation is you know, we worked on a really great condo community in Fort Myers actually North Fort Myers and it was called Northstar Yacht Club and our HOA fees were actually very reasonable for what you got. But the whole community sat on a third on 13 acres. It was incredible. Like you know, entire complex, and it is unbelievable. You know clubroom and and tennis courts and everything. And you know had 301 condos. And when I said to every buyer is that belongs to you. You know that incredible 15,000 square foot clubroom you have ownership in that that unbelievable pool. You know you have ownership in that that tennis court, you have ownership in that that catering kitchen, you have ownership in that. And so that is the main thing that people need to understand is that when they buy a condo is that they’re not just buying their condo, they’re getting a little piece of all of that that the condo offers. And yes, there’s a cost to it, which are the HOA fees and don’t be turned off by HOA fees. You know, get to know what they’re they’re really all about, study them. Study the HOA documents CCNRS have a girlfriend’s name, resale package budget, you know, reserve study all that. Get to know that do your due diligence, but don’t be scared by it. Because there is really nothing quite like living in a condo, because you get that all of that affords you that wonderful lock and leave lifestyle, and also the simplicity of not having to do all those things that you have to do when you own your own single family home.
Mark Bunton 40:24
A lot of this, I think listening to everything that you’re saying it gives be very little overwhelming, and especially to to a buyer who may or may not have bought into a condo community before. And I would, you know, rely heavily on my agent to help me out and help me get through all of this. They should be knowledgeable and be able to answer questions and and, you know, refer to the condo docks they have there in front of you for any piece of information that you might need more than that things that you aren’t going to think of on your own. They have experience with and should be able to point out and highlight.
Uri Vaknin 41:04
And you also said some great Mark the other day you said, you know if you have a lot of questions, make an appointment with the HOA manager and sit down with an HOA, maybe not sit down because now a lot of things are virtual, but set up an appointment. And typically an HOA manager is not going to make an appointment with you unless you’re under contract. So, you know, everyone needs to realize that people don’t you know, everyone wanted to, you know, talk to the HOA manager before they were under contract. They can’t do their job of running the buildings on they have a really hard job as it is and we’re going to learn about that job in the upcoming episode. But meet with the HOA manager after you’ve gone under contract. I would suggest you read all the HOA documents first and so that you can have intelligent questions to ask. But you know, it’s worth the effort. And to that there’ll be no surprises, you know, after you move in, but it’s all right there for you. The law requires that they give you all the information, absorb it, learn about it, don’t be scared by it. And what what should you do Mark? Buy a condo Right?
Mark Bunton 42:11
right.
Uri Vaknin 42:13
So with that said, we want to thank you for joining us for this episode of Condo Artist: The Other Side of Real Estate: Demystifying the Condo HOA. You can always reach us, contact us email us at condoartist, One word, @gmail.com that’s condoartist@gmail.com.