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How an HOA Management Company Can Hurt You

I am a tad- “put out” as they say.

My client is trying to buy a condominium in Glendale and we are having an astounding experience with the “professional” management company.

Here’s the problem.  Management Companies (in general) seem to hate producing the documents needed for a buyer to research the Homeowners Association.  They drag their feet, they charge huge fees and I have had many conversations filled with truly bad attitude in the attempt to get these documents for my buyers.  This is not one Management Company.  As far as I can tell it is most of them.

When the market was hot the buyers just put up with this bad behavior.  In today’s market, however, buyers are nervous and a lack of timely information just might be enough for them to bail.

Shouldn’t a Management Company do a better job of helping the homeowners of the building sell for (presumably) top dollar?

And this leads to the spark for this particular rant.

My client wants this unit.  The building needs to obtain a special certification (FHA) in order for him to buy it.  If the building gets this certification it becomes more desirable because this certification is rare in Glendale.

Here’s how my conversation with the Management Company went:

Me:  Hi, I am following up on the paperwork needed to get the FHA certification completed.  We’ve been waiting 2 weeks and we really need to get this turned in.  Can you help me?

Management:  We asked the HOA secretary to sign it.  There is nothing more we can do.

Me: I heard the secretary is on vacation and any HOA officer will do.  Can you find someone else to sign this?

Management: No.

Me:  No?  I don’t understand.  If we don’t get this certificate the sale will fall through.  My buyer is paying top dollar and this sale will raise the values for everyone.

Management:  No condo association wants FHA buyers.

Me: I am sorry, what?  You assume all FHA buyers are bad?

Management:  They are low quality people who always bring everything down.  I told you I’ve done everything I can do.  Good Bye.

To say I was astounded is too light.  Clearly this is one angry, uneducated and slightly delusional employee.  She really needs a different job- cleaning out sewers sounds appropriate.  However, the senior manager and the owner of the company, while saying much nicer words, were no better.  It took nearly three additional weeks to get a signature and one 5 question document completed.  The homeowner had to go to the Management Companies office and physically get in someone’s face.

I believe small Homeowner Associations are completely unaware of how much a Management Company can affect their resale value.  Perhaps they chose a Management Company based on price- cheapest wins.  Maybe it is on relationship with no thought to quality.

Whatever the criteria was, I am telling you all, now.  Buyers are sophisticated.  They expect full disclosure in a timely manner or they will pull out and buy somewhere else.  Expect better service from your Management Companies.  I’ve seen your budgets- you are paying good money to these companies and there is no excuse for they way they hold your transactions hostage.

 

About Kendyl Young

6 Responses to “How an HOA Management Company Can Hurt You”

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  1. Kendall,
    Im a Realotr in Newport Beach and I experience the same kind of attitude with most HOA’s. YUK!!!

  2. Kendyl says:

    It is truly astounding, right? I wonder what it will take to get these management companies in line with the best interests of the homeowners.

  3. Anne says:

    I am a seller near Charleston, SC and I am experiancing the same problem. Just about as soon as I listed my home for sale, I found a buyer. They where looking to finance thru an FHA Loan and Management stated they would not allow FHA financing in this community. Although we have some rentals available and some of those are state fundet section 8. Now how can they explain that? In addition, some numbers of our HOA standings were providet but didn’t match up in reality. Remember, if you deal with small numbers, they can change percentage wise very quickly and make the differance betwieen qualification or non-qualification. After doing some investigation the rentals where off by as many as15%. (management confirmed the mistake) Anyway, my buyer was still interested and wanted the house and willing to pay a fee of $180 dollars to have a questionnair prepared by management only to find out, the numbers given to the buyer did not match up so well for a conventional loan. After trying to keep the buyer interested for almost 3 weeks without progress they went on and I now lost my buyer. I am stuck with bad numbers and a none cooperating HOA as well as a Management.

  4. Kendyl Young says:

    Anne, I am so sorry to hear of your story! I am truly astounded at how Management companies get in the way. HOA officers are usually made up of current homeowners who are generally unsophisticated in what will maintain or grow property values in their complex.

    The HOA hires a management company based on price and the ability to make their current lives more comfortable. I doubt anyone gives a thought as to how that management company can damage their long term home value.

  5. Renee says:

    Anne,
    I am really sorry to see another horror story like this. I am an HOA manager and unfortunately in Colorado this behavior is a problem because it is unpoliced. Hopefully they will begin licensing soon. There are better companies just not many. Most of our documents are on the open portion of the website and the rest are available to the seller by signing in. There are some minimal costs associated with copying and sending documents but we just offer everything online or on a cd so the printing costs are avoided.
    So sorry you had to endure this,
    Renee

  6. Sara says:

    Of course it isn’t fair, but short of geittng elected to the HOA board and changing the rules, there is little you can do. You could try appealing to the board, but it sounds like they want the bikes in the parking lot, so you may be out of luck. You could try selling, and moving to a younger, more outdoor friendly community, but you still run the risk of the HOA changing the rules.Go to the HOA meetings and see if the board can be reasoned with. It is likely that there was a resident with a bike that caused problems, and you are paying the price. If the community is older and has no interest in biking, they probably would not want the HOA to foot the bill for something they would not use.

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