If you are considering buying a townhome or condominium don't forget to consider the cost of HOA (homeowner association) fees as well as the purchase price when calculating your monthly payments. When qualifying for a mortgage, HOA dues are added to monthly loan and tax payments to get your qualifying monthly payment. Including those fees means you will qualify for a lower priced townhouse or condo than a house.

Condo-th-house

Association fees vary, but are usually highest for condos and typically the higher the association fees the more coverage. For instance in townhomes your assocation fees usually include trash removal, snow/lawn care, exterior maintenance, hazard insurance, sometimes water/sewer… and in a condo your fees could also include heat, sometimes even air conditioning and cable.

It is important to keep in mind, however, that you will be personally responsible for items covered by association dues when you own a house… those costs just aren't factored into your qualifying expenses. In a house you are responsible for everything associated with the house so if the siding needs to be replaced you must pay for it yourself… in most associations it would be covered by the HOA. In a CIC (Common Interest Community) the monthly fees you pay go towards services provided by the association as well as capital improvements/maintenance so you aren't as likely to have as many surprises.

When association fees are higher or lower than that of comparable complexes first check to see what is covered… are fees covering more or fewer services than in other complexes? Also check to see if the association has adequate reserves for repair/replacement costs… are they making up for inadequate reserves in the past? for special assessments because of needed repairs with inadequate reserve funds?

Coops may have fees that are higher still… often because they may also include a common mortgage for the whole property. In a coop you own a share in a corporation that owns real estate rather than owning the real estate itself.

Sharlene Hensrud, RE/MAX ResultsEmailMinneapolis Condo Realtor

RELATED POSTS

About Sharlene Hensrud

I love what I do! Highly insightful, analytical and creative, there is nothing I love more than helping you find the right solution for your real estate transition. My mission is to serve my clients with honesty and integrity, exceeding their expectations in service and support… and to help others by donating a portion of every transaction to Habitat for Humanity

Related Posts

Closing & the Water Bill

Many people don’t realize that water/sewer service is attached to a property address rather than a person. If there are unpaid gas or electric bills after transfer of ownership, the previous owner is still responsible. But if there are unpaid water/sewer bills, the new owner is ultimately responsible because it is tied to the address,.

Read More

Prioritizing your Priorities

Most life decisions require some compromise, whether buying or selling a home, deciding where you want to live or work, or making other major life-changing decisions. It's usually not too hard to come up with a list of pros and cons for two choices but when you have many priorities you are trying to juggle.

Read More

Biggest reasons Milennial renters decide to buy

The biggest reason young renters choose to buy is to have control over their living space… such as having the ability to paint whatever color they want, make updates and renovations, or add a pet. Infographic from Keeping Current Matters Sharlene Hensrud, RE/MAX Results - Minneapolis-St. Paul Realtor HomesMSP Team - Sharlene, John, Angela – Minneapolis-St. Paul Relocation RELATED.

Read More

One thought on “Why are townhouse and condo association fees sometimes so high?

Comments are closed.