Is your HOA holding you hostage?

Condominiums are very popular home choices for first time homebuyers and millennials, and rightfully so. They are often affordable, luxurious, modern, and urban, of course they're highly sought after purchase options! But there can also be one not so pretty aspect of condo ownership that needs to be acknowledged, the HOA.

Recently, I had a young, successful entrepreneur reach out to me about wanting to list his condo. He owned it outright, was very realistic about the possible sales price, and was willing to put in the effort it takes to get a home market ready - he was a realtor's dream client. After our initial consultation, I did some digging into the homeowners association, HOA, and it quickly became apparent that his condo would not qualify for financing, any financing. I couldn't believe it! This guy had done everything right! He worked hard, saved his money, paid his mortgage off completely but it turned out he owned a property that couldn't be sold if a loan was to be utilized, which is how a HUGE portion of the condo seeking market plan to purchase their new home.

The moral of this story is: know your HOA! If you own a condo make sure your HOA is approved for multiple loan programs, has enough money in reserves for necessary maintenance items, is staying current on dues, etc. Real estate loans are dependent on all of these conditions and even one of them being in disarray has the potential to break a deal. If you are shopping for a condo make sure your realtor is knowledgeable and doing her homework on prospective HOA's to protect your interests. Condos are wonderful, low maintenance, economical homes that will continue to be great options for many people but stay smart and don't assume all HOA's are in good standing. Ask the tough questions and hold them accountable.