Tag: home buying checklist

What You Need to Know About HOAs: A Homebuyer’s Guide

Posted on by Will Sing

What is an HOA?

An HOA, or Homeowners Association, is an organization in a subdivision, planned community, or condominium building that makes and enforces rules for the properties and residents. When you purchase a property within an HOA’s jurisdiction, you automatically become a member and are required to pay dues, commonly known as HOA fees. These fees contribute to the upkeep and maintenance of common areas and sometimes cover utilities like water, sewer, and trash.

The Benefits and Drawbacks of HOAs

Benefits:

  • Reduced Risk Profile: By joining a larger group of homeowners, you’re contributing to the maintenance and exterior updates, which can reduce your individual risk.
  • Community Standards: HOAs help maintain property values by enforcing community standards and ensuring properties are well-maintained.

Drawbacks:

  • Cost: HOA fees can range from as low as $60 to over $500+ per month, depending on the age of the property, size of unit, and the reserve funds available for repairs and maintenance.
  • Control: You may have less control over certain aspects of your property, as the HOA will have rules and regulations that you must follow.

What Do HOAs Cover?

HOAs typically cover the maintenance of common areas, which can include landscaping, pools, and recreational centers. They may also cover certain utilities, though this can vary. For example, in the Mountain Park area, there are separate HOAs for specific building complexes and an overarching HOA for the entire area, providing amenities like a pool and a rec center.

Special Assessments

Special assessments are additional fees that can arise when the HOA’s reserve funds are insufficient to cover major repairs or improvements. These assessments are usually paid on top of your regular HOA fees and can significantly impact your budget. It’s crucial to be aware of potential special assessments, especially if the property is older and may require more extensive maintenance.

HOA Transfer Fees

When purchasing a property with an HOA, be prepared for an HOA transfer fee, typically ranging from $200 to $1,000. This fee can vary widely depending on the specific HOA.

Reviewing HOA Documents

In Oregon, there isn’t a large governing body overseeing HOAs, so it’s essential to thoroughly review all HOA documents. Here are the five key documents you need to examine:

  1. Reserve Study: This document details the HOA’s reserve funds and planned improvements.
  2. Financial Reports: Ensure the HOA is financially stable and can cover future expenses without needing special assessments.
  3. Meeting Minutes: Understand ongoing and upcoming issues, potential rule changes, and financial health.
  4. Governing Documents: These include the rules and regulations, such as pet policies and property use restrictions.
  5. Insurance Certificate: Verify that the HOA has adequate insurance coverage.

Getting Expert Help

While reviewing these documents, consider hiring a company like CID Analytics. They offer a service similar to a home inspection but for HOAs, providing a detailed report on the HOA’s health and potential issues. This service costs around $600 and takes about five business days to complete.

Conclusion

Understanding the role and impact of an HOA is crucial when buying a home. By reviewing the necessary documents and considering both the benefits and drawbacks, you can make an informed decision that suits your needs and lifestyle.

For personalized advice, you can schedule a free strategy session here. Also, check out my Free Buyer’s Guide to help you navigate the home buying process.

Watch the full video on Understanding HOAs: What Every Homebuyer Needs to Know.

Connect with me on YouTube, Instagram, or Facebook!

 

What Does Contingent Mean in Real Estate? A Complete Breakdown for Buyers and Sellers

Posted on by Will Sing

In the world of real estate, the term “contingent” can sometimes leave buyers and sellers scratching their heads. Whether you’re navigating the buying process or preparing to list your home, understanding contingent offers is crucial. In this post, we’ll break down what it means to be “contingent” in real estate, how it affects you as a buyer or seller, and what potential scenarios you could face.

What Is a Contingent Offer?

A contingent offer on a house means the buyer has included a protective clause in their contract. This contingency gives the buyer an option to back out of the purchase if certain conditions are not met. Typically, a contingent offer involves the buyer needing to sell their current home before they can finalize the purchase of a new one. Think of it as a step in between “active” and “pending”—the property is not quite under contract yet, and there’s still an opportunity for other buyers to step in.

If you’ve heard the term “bumpable buyer,” it means that the current buyer’s offer is contingent on selling their home, and another buyer could potentially “bump” them out of the contract. Essentially, it’s a state of uncertainty, and another buyer might have a chance to swoop in.

What Does Being Contingent Mean for Buyers?

For buyers, there are two key scenarios involving contingent offers:

  1. You Are the Contingent Buyer: You want to buy a home, but you need to sell your current property first. This makes your offer contingent on that sale, which can sometimes be a hurdle. If another buyer who is not contingent decides to make an offer, you will usually have 48 to 72 hours to either remove your contingency or lose the property.
  2. You Are a Competing Buyer: You want to buy a property that already has a contingent offer. In this case, you can put in an offer, which then triggers the “bump clause.” The original buyer (who is contingent) will have a set amount of time to remove their contingency—if they can, they go from “contingent” to “pending,” solidifying their contract. If they cannot, the seller is free to accept your offer, and the contingent buyer is out.

What Does Being Contingent Mean for Sellers?

If you’re selling your home and receive a contingent offer, it’s important to understand the potential risks. If the buyer needs to sell their current home, this could delay your closing timeline. For instance, if their home takes longer to sell than expected, you might need to extend the closing date, which can be problematic depending on your plans.

It’s also essential to assess the buyer’s preparedness to sell their current property. Are they already on the market? Are they prepped and ready, or are they just starting? The more ready they are, the less risk you’ll face. Given the additional uncertainty, contingent buyers often need to make a stronger offer to compensate for the risk you are taking.

Key Takeaways

  • Contingent Offers: Buyers need to meet specific conditions, often involving selling their current home.
  • Bump Clauses: If you are the contingent buyer, be prepared to act quickly if a competing offer comes in.
  • For Sellers: Contingent offers can mean more risk and longer timelines, but they might come with a higher price to compensate for that risk.

Watch the Full Video: The REAL Difference Between Contingent and Pending

If you have any questions about buying a home or need more personalized advice, feel free to reach out to me. Connect with me on YouTube, Instagram, or Facebook.

For a more detailed consultation or to get started on your home buying journey, schedule a free strategy session here. You can also access my Free Buyer’s Guide to help you through every step of the process here.

Navigating Your Home Purchase: Who’s Who in a Real Estate Deal

Posted on by Will Sing

Understanding the Key Players in Your Home Buying Journey

Buying a home involves several key players, each with a unique role. In this blog post, I’ll walk you through the major roles in a real estate transaction, what they do, and how they help ensure a smooth process. Whether you’re a first-time buyer or an experienced investor, understanding these roles will give you the confidence to navigate your home buying journey.

The Real Estate Agent: Your Project Manager

First and foremost is your real estate agent. Think of your agent as the project manager of your home buying process. Their job is to guide you from start to finish. Here’s what you can expect from your real estate agent:

  • Scheduling Tours: Arranging viewings for properties you’re interested in.
  • Determining Comps and Offer Strategy: Helping you understand the market value and craft a competitive offer.
  • Negotiating Deals: Working to get you the best terms possible.
  • Scheduling Inspections: Coordinating necessary inspections to ensure the property is in good condition.
  • Connecting with Contractors: Providing referrals for any needed repairs or renovations.
  • Resource Direction: Guiding you to tax or legal professionals as needed.

The Lender: Securing Your Mortgage

Next is the lender, who plays a crucial role in securing the financing for your home. They will:

  • Pre-Approval Process: Help determine how much you can borrow and identify suitable loan programs.
  • Document Collection: Request necessary documents to process your loan application.
  • Loan Processing: Guide you through the steps to secure your mortgage, providing clarity on your financial obligations.

It’s essential to work with a lender who communicates effectively and who you can trust. Poor communication can jeopardize your transaction.

The Escrow Officer or Title Company: Ensuring Neutrality

The escrow officer or title company acts as a neutral third party in the transaction. Their responsibilities include:

  • Holding Earnest Money: Managing the deposit you make when your offer is accepted.
  • Facilitating the Closing: Ensuring all paperwork is completed and funds are distributed correctly.
  • Providing Title Insurance: Protecting you against any title disputes.

Home Inspectors: Assessing Property Condition

Home inspectors are like the primary care doctors for your new home. They meticulously examine the property to identify any potential issues. Key tasks include:

  • Detailed Inspections: Checking structural integrity, plumbing, electrical systems, and more.
  • Referrals to Specialists: Suggesting further inspections if they find potential problems.

The Appraiser: Determining Home Value

Appraisers assess the value of the home to ensure the lender is not over-lending. They are a neutral third party and you won’t have much direct contact with them. Their role is crucial for:

  • Valuation: Ensuring the home’s value justifies the loan amount.
  • Risk Mitigation: Protecting the lender from overextending credit.

The Insurance Agent: Securing Home Insurance

Home insurance is mandatory when buying a home. An insurance agent will:

  • Policy Selection: Help you choose the right insurance policy for your home.
  • Bundling Options: Provide options to bundle home insurance with other policies for discounts.

Other Key Players

Additional roles that may come into play include:

  • Transaction Coordinators: Assist with paperwork and ensure everything runs smoothly.
  • Home Warranty Providers: Offer warranties to cover potential mechanical issues.
  • Contractors: Provide estimates and complete any necessary repairs or upgrades.

Conclusion

Understanding the roles of these key players in a real estate transaction can help you navigate the process with confidence. If you have any questions about buying a home or need more personalized advice, feel free to reach out to me. Connect with me on YouTube, Instagram, or Facebook.

For a more detailed consultation or to get started on your home buying journey, schedule a free strategy session here. You can also access my Free Buyer’s Guide to help you through every step of the process here.