Posts Tagged ‘property’

The HOA Dilemma for Home Buyers: What You Need To Know

Thursday, January 18th, 2018

Many home buyers considering attached home purchases – condos, townhomes or twin homes – often discover that HOA payments could alter monthly payments quite a bit more than anticipated, and may mean the difference between whether a purchase makes sense and if a loan will be approved.

HOA communities can often come with high monthly payments, especially in areas that are desirable such as those close to the beach, town centers, etc. Here are the things buyers should look into when deciding whether to buy a property with a high HOA:

1. What do the fees cover? Most cover exterior building maintenance and insurance, as well as the common areas (landscaping, pool and spa if they exist, gates and parking facilities). Home owners are responsible for insurance that covers the interior of the home, including all personal items. Make sure you understand exactly what is covered in the fee so you are not surprised.

2. CC&Rs. Usually a buyer cannot get copies of these until a contract has been negotiated and escrow opened. Once the documents are received make sure to read them thoroughly to understand owner responsibility and coverage. If you are thinking about making an offer and have specific questions, your agent can try to get the answers from the HOA or the listing agent/sellers. But if numbers work out for your loan and you love the home, make an offer and then you can get your hands on all the documents. You have a contingency period in which to review them so if you discover anything that concerns you, you have time to cancel the contract.

3. Assessments. The seller will be able to tell you if there are any upcoming assessments, but you will also be able to get an idea of what may pop up in the near future from the age and location of the complex. Make sure to take this into consideration – for example, if the complex is 25 years old you may surmise that in the next 5-10 years the roof will need to be replaced. Usually the HOA will assess homeowners to cover such a large expense. Payments will usually go up for a period of time until the money is collected. Some associations give a choice so the owner can break down the payments over time or pay a lump sum.

4. Dues increase. Note that HOA dues are subject to increase on an annual basis, or whenever the board feels it is needed in order to cover increased expenses. As a potential homeowner in the complex it is important to keep this in mind, especially if the price of the dues is already stretching your budget. Make sure to talk this over with your real estate and mortgage professionals.

5. HOA strength. One of the most important things to find out is just how strong the HOA reserves are – this will obviously carry it far if an unexpected expense does arise. If the reserves are low they would have to raise the dues a lot in order to cover unanticipated expenses. One great way to make sure the board is doing thing correctly is to get on the board! I have a friend with an accountant background who got on her board when she moved into the community – she found it many ways to save money and helped bring it back to a healthier place, reserve-wise.

6. Lawsuits. Check to see if there are any lawsuits against the HOA, as this could effect your purchase. Discuss with your mortgage professional.

No matter what type of home you purchase the bottom line is that you will have to be comfortable with expenses, including any that may not be forseeable. It is important to scrutinize HOA documentation so you are familiar with where the money is spent.

RSS Feed

Why is Home Inventory Scarce (even in San Diego County)?

Monday, February 1st, 2016

If you are a buyer you have likely noticed that inventory is scarce right now, in San Diego county as well as many other areas. As we head into the Spring/Summer “busy” home selling season, many wonder whether the inventory will pick up, and that has some buyers and sellers worried. For sale

Here are some of the likely reasons why inventory levels remain low right now:

1. Rate increases. In December of 2015 the feds slightly raised interest rates, with the hint that more increases would follow. Many buyers got off the fence and are not out looking for houses before any further increases might price them out of the buyer market. This could be good news for sellers, but it seems they are not jumping to list their properties – likely because they are concerned with finding replacement property themselves.

2. Buyer inability to qualify for a loan. Many buyers may not be able to qualify for loans. Price increases in 2015 and mortgage interest rate increases could cut out the ability of some buyers to qualify.

3. Sellers don’t want to give up prop 13 tax basis. Some sellers may not want to list their properties because they could lose their Proposition 13 tax benefits if they sell – especially if they purchased their homes when prices were lower, the assumption being that a new home purchased will  be priced higher and thus have a higher tax base.

4. Sellers worry they won’t find replacement property. This was mentioned above, and it is a Catch-22 situation: sellers may have plenty of interested buyers and great offers, but they are afraid because of the lack of inventory available for finding replacement property; thus many sellers stay put.

5. U.S. and foreign economic issues. Although this may not play into selling and purchasing decisions as much as some of the other reasons, it could be a deal breaker for some buyers/sellers, who may perceive threats in the economic system and decide it is best to stay put until things feel safer.


The bottom line is that we do not know how the inventory will be affected as we head into 2016. Buyers who are qualified should probably focus on finding properties sooner rather than later, if they want to avoid interest rate hikes. Sellers who have replacement property, are moving out of the area, or must sell for other reasons will likely find themselves in a great position to sell. Make sure to talk to a knowledgeable and experienced local area agent and mortgage professional to understand what it going on in your hyper-local market, so you know when is the best time for you to buy or sell real estate.

RSS Feed

Top 10 Overlooked Home Purchase Questions

Tuesday, September 24th, 2013


RSS Feed

4 Reasons to Buy Investment Property in San Diego

Monday, January 28th, 2013

If you’ve been to San Diego you know what a wonderful place it truly is, and how much it has to offer. Both full-time residents and part-timers love to live here, and it continues to be one of the top vacation destinations in the country. San Diego is also on the top ten list for international buyers. If you haven’t been to San Diego and wonder what makes it so special, and a great place to invest in property…here are my top 4 reasons:

1. Appreciation Factor. The San Diego real estate market is a special one. Sure, it has ups and downs like any market, but the location and weather make it a desirable place to own property year-round. The proximity to the coast will always be a strong factor. If you plan to hold onto the property over time you will find your investment is sound, and you will profit. This is prime coastal Southern California real estate territory.

2.  Rentability. If you are planning on renting out your property you are in luck. Rents have risen over the last few years, inventory is scarce, and San Diego rental property is always in high demand. If you purchase property along the coast you may be able to rent out your property as a vacation rental, which can be a strong source of income. High end rental properties can even be a sole source of income in some situations. In the last several years I have seen rental properties rent very quickly, with multiple applications.

3.  The Weather! Nowhere else has weather like San Diego. With an average year-round temperature of 72, San Diego is the quintessential vacation destination. Many “snowbirds” come to San Diego in the winter to escape the cold elsewhere, and those living in places that get a tad too warm in the summer, like Arizona and Nevada, love to call San Diego home during summer months.

4. So Much to Offer. San Diego has the best of everything: theater, music, dining, museums, culture, parks, sports and sports venues, shopping, and beaches. There is something for everyone in San Diego, and it will continue to be a vacation destination. In a word, it is paradise…wouldn’t you love to have a home in paradise?

No matter who you are or how you like to relax and play, you will find it in San Diego. If you are looking for investment property this is a great place, whether your goal is to have a home to escape to, or one that will be a source of income. If you have questions about investment property in San Diego County, please feel free to contact me. There are properties and locations for so many types of investments, and I will be happy to assist you in finding the right one.

RSS Feed