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Monday, December 21, 2015

Homeowner Association Fees - They Have Little to Do With Your Offer Price

I recently had a Viera, Florida home buyer attempt to support his offer price by stating "the offer is lower because the fees are steep."

When I work with sellers I usually recommend pricing a home for sale based generally on four factors: 
  1. condition, 
  2. competition, 
  3. objective,
  4. location.
With buyers I always start with a similar list of factors with budget and location near the top.  Of course there are other factors but for this post budget and price fit with the direction I am going here.

There is this famous line about real estate being all about "location, location, location."  It means that given two identical houses the price for each will vary based on location.

Going one step further home owner association fees very often are directly linked with the location.  

I am confused by the superficial attempt to support a low offer by the association fees being steep.  Homeowner association fees are usually in exchange for some benefit.   

Association fees may be the price of admission to the location.    It could be the amenities provided such as the manned, private entrance.   It could be for services included such as landscaping and exterior maintenance.   In the case of condominiums it could be for insurance.

Association fees have nothing to do with the value of a property aside from the benefits associated with its location.

For this reason it is inconceivable to me that the association benefits would detract from an honest offer or the value of a particular house or condo.

In its most simplest form here is the truth about buying and selling a house. 
  1. Buyers offer what they are willing to pay.   
  2. Sellers accept offers they are willing to accept.  
Its all about who is ready, willing and able....That is the free market.  In the end it is all about motivation.

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