Before buying a condo, townhome, or even a single family home that belongs to a homeowner's association (HOA), make sure you have all the details you will need to make an educated decision and avoid any unwanted surprises down the road. HOA's are usually overlooked in a purchase, even though they can greatly impact your day-to-day life. A good HOA can make your life in that community easy or be a never ending headache. Also, if you're not careful, you could end up spending a lot of money you didn't anticipate after closing. Follow these steps when researching HOA's.

First and foremost, take a look around you and make notes of these items when visiting homes in communities run by HOA's:

• Are the fences rusting?
• Are the building signs in disrepair?
• Does the asphalt look like gravel?
• Are the pool and other amenities clean and in good working order?
• What is the age and condition of the roofs?
• Do the buildings need to be painted?
• Are there staircases and balconies in poor shape that the HOA is responsible for maintaining?
• When were the buildings last treated for termites? Have they been neglected, with a higher risk of unknown termite damage throughout the community?
• Are there problems with siding?
• Are there grading issues causing flooding?
• What is the condition of the gutters, fascia, and other fixtures?

Additionally, to be even more proactive in your research on an HOA, take a look at the reserve study. A reserve study outlines an HOA’s long-term funding plan, showing how much it currently has to offset maintenance costs. It’s the most important tool in determining the financial health of the HOA. Consider these items when looking at the reserve study:

• What is the percent funded? Zero percent to 30 percent means it’s at high risk of a special assessment; 31 percent to 70 percent is a medium risk; 71 percent to 100 percent is low risk.
• How much does the reserve study recommend the HOA saves each year, and how much is the HOA actually saving?
• Has the HOA been following the reserve study and making capital improvements?
• How much money can you foresee being needed compared to what the HOA has saved?

Finally, ask plenty of questions. If you are seriously considering a home within an HOA, give the HOA a call and ask them these:

• Have there been any special assessments before? Get the details and ask if there is discussion about having another one.
• Have there been any lawsuits or are any expected? Check court records.
• How many insurance claims has the HOA had?
• If roofs are an HOA responsibility, are there plans to transfer the burden to the owner? How many roof repairs have there been in the last couple years?
• Are there plans to change the HOA’s covenants, conditions, and restrictions?
• Have there been any repairs from extensive water or termite damage in the last couple years?

Be prepared and know as much as you can about an HOA before you buy. You won't regret it!

(Courtesy of REALTORMag, 2015)