Lisa and I are representing an experienced 3rd generation custom builder in our Warren's Gate community in Clemmons, NC. It is for active adults who do not want to worry with exterior maintenance of their lawn OR dwelling. One question we get often concerns the monthly HOA fee... on the surface, it seems high compared to other "simialr" communities (I say that tongue in cheek because few "no maintenance" communities are truly "no maintenance", but that is another blog post!). Anyway, we explain that dwelling insurance is included. All the occupant needs is an H06 policy, which covers contents and interior "stuff"... here is an email I sent recently to a potential customer that puts it in more understandable terms:
If you want to mention this to your insurance agent, what is needed is called an H06 policy. It is contents plus interior shell (that’s “Amanda speak”…). The exterior is completely covered by the master policy of the HOA. The reason this is CRUCIAL these days is because of how appearance affects perceived values. If your neighbor goes into foreclosure, abandons the property, or just plain and simple fails to maintain it, the HOA is still maintaining the exterior. So, if a tree limb falls on the roof during the time it is unoccupied, it will be fixed rather than sit there and cause more and more damage. Similarly, if your neighbor is under insured and something like that happens, you don’t have to worry – all homeowners in the neighborhood have the same level of insurance, so one underinsured or absentee homeowner’s lack of maintenance does not bring the whole neighborhood down.
Depending on the level of coverage, you CAN have some costs savings with the HO6, but that is relative to your level of comfort. So, that MAY be a benefit, but the definite and main benefit is in future protection. With all the foreclosures, short sales, etc, happening now in ALL price points, this is tremendous for peace of mind.
One of the things I said about K****** leads just to this issue. K****** has some gorgeous properties, but there is NOT a blanket HOA policy there. In the last few years, there have been quite a few short sales and foreclosures out there. I personally had a home on the market 2-3 years ago that was gorgeous inside and out, but the lack of maintenance of the properties on both sides just killed it when it was shown. That is a worst case scenario, but in this day and age very relevant.
The HO6 covers contents as well as the following example… should you go on vacation and have a water leak, your HO6 covers the internal damage.
Let me know if you have questions. I tried to relay this is “non Realtor speak” like you said yesterday ;-), but your insurance agent will absolutely be the best person to explain it in more detail. I can also give you contact info for the policy holder of the policy out here at WG if you or your rep would like to speak to them.
*** Another important point to realize about the dues is that they have a repair and maintenance escrow built in, so that your chance of all of a sudden getting a $3000 assessment for gutters and downspouts in the mail one day that is due and payable within 60 days is MUCH less. In the case of WG, money for things like that is being set aside little by little every month.
Finally, to put it all in perspective, how much do you spend in a year just on your yard?? I know I personally spent over $200 in weed killer ALONE in July (that is still sitting unused on my front porch, by the way). So, to get all lawn maintenance (that will actually be done!), exterior maintenance, sprinklers in the front and back (and the water for them), repair escrows, maintenance reserves, dwelling insurance, sidewalks and street lights, entrance upkeep, and HOA management for $217.50 a month really isn't a burden...
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