With home prices and closing costs on the rise, the last thing you need is yet another unexpected expense. But if they’re buying into a community with an HOA, surprise “special assessments
” can absolutely break the bank. Here’s what you need to know about these not-so-special fees:
- Special assessments cover major one-off projects. Your clients’ typical monthly HOA dues are meant to cover normal maintenance and upkeep, but special assessments are levied to pay for bigger projects that require more money than the HOA has saved. These projects can include installing new elevators, replacing the roof, or repairing storm damage.
- Sometimes sellers will pay off the special assessment‚ but not always. If the sellers are still paying off their special assessment, they’ll typically use their equity to finish those payments. But in today’s market, they may expect your buyer to cover this cost along with the purchase price.
- If you don’t ask, you probably won’t know. Sellers aren’t always (...ahem) forthcoming about these fees. Always make a point to ask if any special assessments are on the horizon and how many have been levied in the past.
- Be wary of older, outdated buildings. Siding, windows, and roofs are the most common special assessment projects. If youre considering a property that hasn’t been updated in a decade or more, know that these potential major repairs may fall on you.