Selling Town Home With High HOA Fees

housetrained1978

9 years ago

last modified: 9 years ago

Hello, long time lurker, first time poster.

My husband and I listed our 3 bedroom 2 bath town home 24 days ago. We have had 32 showings. The feedback has been excellent and many people say they really like it. We have received one low ball offer and we could not come to an agreement. We had another group trying to get qualified to buy it, but weren't able to.

The one constant concern we are hearing is the HOA fee is too high. We have heard this from probably 70% of the groups as to why they didn't make an offer. Our fee is $300 a month. I would say in this area, the average is around $200 a month. Our fees include water, sewer, trash, insurance, pool, clubhouse, tennis court, and cable. We have a nice little fenced-in front yard, a one car garage, and a backyard. It's also an older property with lots of mature trees and shrubbery. Landscaping is included.

We have a very healthy reserve fund and instead of piling on assessments, they decided to raise the fee about 2 1/2 years ago. We won't have an assessment for at least 5-6 years, if even then.

This year, three units have sold. We are priced right in line with the comps and are priced right, per square foot, according to my agent. I would love any suggestions about how to deal with his issue. We are willing to offer 5-6 months of fees paid, if we need to, but that doesn't change the fact the HOA will remain $300 a month.

I talked with my agent today, after he held an open house with 6 showings and three of the groups mentioning the high fee. He is going to put together a flier with all the things that are covered, as well as leave copies of the financials and reserve study.

Any other tips or suggestions to address this issue?

Featured Answer

DLM2000-GW

9 years ago

last modified: 9 years ago

Your agent should have had that flyer with the items covered in the HOA fee from day one but that's water under the bridge. Just make sure it happens Monday. The other thing to do is find out what the more standard $200 fee is covering at your competing properties. It sounds to me as if your fee covers quite a bit even before you take into account the healthy reserve fund and that's a big plus. Point up whatever your fee covers that either isn't covered at your competition or isn't covered to the same standard - maybe the landscaping is nicer at your place, or your pool and amenities are nicer - whatever it is, highlight it just as you would the nicest features of your unit.

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Comments (8)

jewelisfabulous
9 years ago
I've seen some listings handle issues like this by the seller offering to escrow a year's worth of the HOA fees for the buyer.
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housetrained1978 thanked jewelisfabulous
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lucy132
9 years ago
The HOA fee affects what the buyers can qualify for in terms of financing. It may be putting some of your buyers out of range for their budget. I think it's very important that what is covered in the fee be specified in the MLS listing also. Landscaping maintenance is a big one. Depending on what buyers are looking for in your price range and area, also highlight things that might be unique and appealing in your community - are there pool parties in the summer or other social events, tennis lessons offered, things like that. Good luck!
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housetrained1978
Original Author
9 years ago
Thank you for the replies!

DLM2000, I agree we should have had the flyer at the start. I didn't even think of it until yesterday. I also have been looking into nearby communities to try to do a comparison of what we offer, versus what they offer. Great suggestion. For instance, I have a friend who lives in a condo nearby, and his HOA is $200 a month. That does not include cable or any personal yard, just general landscaping. Based on the other town home communities in the area, we definitely get a lot more yard than the other ones.

jewelisfabulous, I think that is the direction we will go. Probably not a full year, as that's a $3,600 drop, and we don't have to move so we aren't there yet, but I am willing to offer maybe 5-6 months, at this point.

lucy132, it's in the MLS listing, but I think it could be even more detailed. You are right. People have to include that in their loan to qualify. $300 in utilities we pay for ourselves does not have to be added in the financing requirements. My agent said our fee probably dismisses 30% of potential buyers right up front. Those are people who don't even call for a showing. I wish we could do away with the cable. Many people do online viewing, these days. We will definitely build up the community events.
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jay06
9 years ago
In my area, a condo fee that covers cable is unusual and would be a huge benefit. Could that be highlighted in your MLS description?
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maddielee
9 years ago
Do your fees also include property taxes? The condo fee that we pay on a property also includes the taxes. emphasis that, if it applies. 2 bedroom 2 bath HOA is over 350.00/month....near Tampa FL.
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lascatx
9 years ago
If you offer an HOA fee deal, instead of the whole thing for a few months, why not pay the difference between the average $200 per month and your $300 a month for a longer period -- or offer half and make yours effectively less than the competition? Won't cost you more but it may seem like more to a buyer. Then the info on everything your HOA covers (with comps if you can) and anything to back up the reserve/assessment info. You will attract a smart buyer or a novice with a smart agent. That should make the whole transaction go smoother too. ;-)
housetrained1978
Original Author
9 years ago
Cable is highlighted in the listing. I would say maybe 25% of communities around here include it.

maddielee, it does not include property taxes, which is not common here. I wish it did!

lascatx, I love that idea! I think it's great and I emailed my agent and suggested that to him. We have two more showings this afternoon, already, so I'm hoping we can get this going ASAP,
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