Did you find the home you always dreamed of? Are you selling your home and moving on up? Welcome to the homeowners’ club! Or, welcome to the new homeowners’ club! We hope your new home is everything you hoped for. We also hope you’re prepared for closing costs and HOA transfer fees.
Sorry, we really don’t mean to be a buzzkill, we just want you to be informed and prepared.
What are HOA transfer fees?
HOA transfer fees are one fee (in a long list of fees) that you will pay when you join an HOA, condo association or other community association. These associations are there to help run and manage a community. They operate off monthly or annual dues that pay for amenities, landscaping, trash and so much more.
Transfer fees are one of the standard fees that occur when a transfer of ownership takes place. They pay for preparing documents, and all the work that lawyers, HOA management and administration have to do in order to facilitate a new homeowner coming into the community. Essentially, all costs that come with transferring ownership from the buyer to the seller are covered by the transfer fee.
Who pays the transfer fee?
Your HOA should disclose to you before closing how much your transfer fees will be and who pays for them. It typically isn’t very large, around $500 or less. But all these fees can start to add up.
In general, the seller will pay the transfer fees. However, there is no official rule that states who’s responsible 100% of the time. It can vary state by state, it can even change depending on the state of the market. If it’s a hot seller’s market, you could see a lot of negotiations lean more in favor of the seller.
It’s very important to get clarity on all fees and whose responsibility they are before closing. This will all be specified in the home purchase contract. Read it thoroughly and/or hire a real estate attorney to help you navigate the ins and outs of purchasing a home.
In summary, transfer fees cover the costs incurred when transfer of ownership takes place in a community association.
They usually run less than $500.
They are usually the seller’s responsibility, but this is not 100% guaranteed.
So…check your home purchase contract!
If you have questions about your new home purchase or need help with negotiations in a tough seller’s market, contact us today. We can help guide clients with real estate transactional and litigation matters.