Wednesday, July 08, 2009

10 Things Your Real Estate Broker Won't Say at SmartMoney.com

10 Things Your Real Estate Broker Won't Say at SmartMoney.com
There is a #11, too: "This home is in an HOA."

8 comments:

Tom Skiba said...

Of course #11 presumes that the broker (1)even knows the house is in a community association (2)knows anything about the state laws regarding associations, and(3)chooses to mention it to the prospective buyer.

Sadly brokers frequently fail in one or even all of these areas in their efforts to get to closing and collect their commission.

Fred Pilot said...

This is a recycled story that ran about 10 years ago and was prominently featured at ahrc.com

Anonymous said...

Let's see. The broker is aware of the number of bedrooms, bathrooms, size of lot, property taxes, "community amenities", square footage, type of construction, school district, etc., but gets to claim ignorance about whether an HOA exists. Hmmm.

I don't think it's a question of whether the broker knows the home is in an HOA. The reason the broker won't mention it is because it's detrimental to selling the property as pointed out by Tom Skiba himself. If it was a selling point the broker would mention it. Brokers don't like to disclose information (such as the existence of an HOA) that would kill the deal. Thanks to Tom Skiba for being honest about HOAs being an undesirable property trait.

You don't advertise undesirable attributes. All the homeowner sees is the house, not the legal entanglement of the HOA.

The broker is about closing the deal and both industries are more than happy to churn homeowners into and out of HOAs. Why does MLS provide searchable fields for all these other property attributes (and burdens) but omits something as simple as an affirmative "HOA" or "no HOA" field to permit purchasers to search for property that is not burdened by one or more involuntary memberships?

Among all the other bad things that go hand-in-hand with HOAs, knowledgeable buyers don't want property burdened by perpetual liens that are never paid off. If HOAs were such a great thing then NAR, CAI, and MLS would want to note the presence of the HOA. After all the industry claims are that people "chose" that and "knew it" when they moved in, right?

Realtors aren't interested in killing sales prospects by advertising negative property attributes, so they don't like to advertise the existence of the HOA or the level of assessments. In fact it's been made difficult to search in any way to avoid HOA-burdened property. Homeowners can't exclude HOA property from the search due to the deliberate design of MLA. More evidence that homeowners don't "choose" HOA property. When the homeowner buys and finds out the bad news later, he's encouraged to "move" by the real estate industry - more commissions of course.

Fred Pilot said...

I was mistaken re the media story of 10 years ago featured at ahrc.com

It was "10 things your homeowners association won't tell you."

Anonymous said...

But how can that be? Realtors are licensed, aren't they? Since they are licensed they should know about the HOA, shouldn't they?

Tom Skiba said...

Funny how a broker is frequently perfectly familiar with all the amenities that the HOA brings, the pool, the walking trails, the fitness center, etc. but doesn't mention the HOA itself. The reality is that those amenities are things that they can see, touch, and show to a buyer, the association is more complex.

My personal experience is not that they are intentionally trying to hide the HOA, as claimed by Anonymous above, but that they just simply don't know and frankly don't care. Maybe they think that it is too complex, maybe they don't want to look uninformed, or maybe they are just woefully untrained.

I would actually think that the addition of a flat to MLS to indicate that there is some form of mandatory association would be a valuable one. CAI believes that more information and more knowledgeable buyers are good for the market and good for associations. That is why we support pre-sale disclosure legislation whenever the opportunity arises. (and guess who almost universally opposes such mandatory disclosures?)

The reality is that associations work for some folks and not for others. People should be informed consumers and associations should be allowed to succede or fail on their merits: that's a free market.

Fred Pilot said...

Two to three decades ago, a detached residential property that came with an HOA was sufficiently unusual such that it arguably should have been disclosed by real estate salespeople to prospective purchasers.

However today due to the expansion and continuation of public policy favoring the privatization of local government, HOAs are nearly ubiquitous in much of the United States. They are as common as towns, counties and municipalities which aren't usually discussed within the scope of a residential real estate transaction unless there is some unusual zoning or ordinance restricting the use of the property.

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