All Forum Posts by: Uday Maripalli

A lot of condos and town-homes in Seattle/Bellevue area seem to have really high HOAs. How does one decide if HOA fees are reasonable?

We recently saw a town-home that we really like. There are about 20-21 town-homes (2BR and 3BR) in the community. They have a small pool and a decent sized lawn. The HOA fees is $525 per month and it covers exterior (roof, exterior paint etc), common area maintenance, water, sewer, and garbage. They seem to be doing a good job of maintaining the property. They seem to have decent reserves (about 120K).

Is a 500+ per month HOA for a 3BR town-home considered reasonable? It seems a little excess to me but the most of the town-home complexes have similar HOAs. There are very few HOAs that are less than 400 per month. When we talk to our loan officer, he told us that every increment of 10K loan amount equates to approx 50 per month in EMI. A $500 per month HOA equates to buying a home (single-family) that is $100,000 more that what the town-home costs. When I look at it this way, town-homes don't make sense at all. Moreover, HOAs are anticipated to increase every couple of years. How come so many people pay such high HOAs?

TIA for your time.

 Thank you for the message Dave. Why do you recommend re move away from the lender? Thanks.

I apologize in advance for a very long post.

We are first time home buyers in a very competitive market (Seattle). Neither me nor my wife work in the IT industry so we knew our limitations and went in with realistic expectations. We chose Flyhomes as our realtor since their “All Cash” offer seemed helpful in a multiple offer situation (where Flyhomes purchases the house for all cash and then sells it to us). We discussed our expectations and financial situation with our client advisor (just a fancy name for realtor). We told him that we are primarily interested in a single family home and are comfortable with a budget of high 600s and are willing to go up to low-mid 700s if we really loved a home. We were willing to get old beaten up home since that is what is available at our price range. We made it clear that we are willing to buy an old home and slowly make upgrades over a time. We also made it clear that if we go with something in our higher end (700s) we don’t want to get a home that requires significant immediate repairs (like immediate replacement of roof or structural reinforcements etc).

We started with a clear idea and we looked at homes that fit our bill, except 3 or 4 homes that were above our price range. We looked at those homes because we really loved the location and the listing photos. I don’t think it’s terrible of us to ask Flyhomes to show us homes that are beyond our means.

We found a home that we really liked that was listed for 630K. It was move-in ready but very old/original (late 80’s). We told our agent that we like the location and its layout, and we want to put an offer. Our agent told us to start with an All-Cash offer at 670K and then revise it based on other competing offers. We immediately agreed and did an inspection (first few inspections are free with Flyhomes). Depending on other offers, we were willing to escalate another 10-20K. Unfortunately, someone put an offer at 760K and we lost the home. Everyone including the seller was shocked because no one expected an offer that high. Flyhomes agent agreed that this home was in no way worth 760K and we should not even think about matching it. We felt sad but moved on.

Last week another 1950s home came on the market for 670K. This home came on the market on late Thursday evening and had an had an offer review date of following Tuesday. The pictures looked good and the location was ideal for us. We toured the home on Thursday night and told our agent that we really like it. He suggested that we move quickly (we also wanted to move quickly) and put an all cash 725K offer by Friday (to beat open house crowd). We told him that we are good with that price if there are no structural issues and if there is no need for any immediate high budget improvements. We proceeded to inspect the house on Friday morning. Unfortunately, there were couple of major issues (in addition to many other minor issues which is the case with any house in our price range). A beam in the crawl space was structurally compromised. The owners cut into one of the load bearing beams and left it unsupported. There were couple of big settlement cracks that extended from exterior of the house to the interior under crawl space. In addition, the crawl space was flooded, and the inspector said that it needs immediate installation of French Drain around the house. He estimated the cost of approx. 20K to resolve flooding issues (which needs immediate attention). After the inspection, me and our agent agreed that 725K offer might be a little high knowing what we know. So, he suggested we wait until offer review date to see the response and put an offer if it made sense. We agreed with his assessment and waited until offer review date. Our agent said that since we already did the inspection, there is no harm in putting an offer at our comfortable price. So, we put an All-Cash offer of 705K, which our agent seemed to have no problem doing at this stage. Being first time home buyers, we were not very comfortable with the project we must take on immediately and that 725K will not be financially manageable to us. After submitting the offer, the seller got back to us asking if we want to revise our offer since they really liked “All-Cash”.

We refused to increase our offer and said that we stretched as much as we could for this particular home. We again explained to him that 725K (or higher) is not an issue for us if we don’t have to chalk up addition 15-20K immediately. His immediate response (in his exact words) was “If you can’t escalate to 725K for this home then you should stop wasting time and stop looking for single family homes. This is a competitive market and you won’t find any homes you want at this price point.”

We were shocked to hear these words. We did everything he asked for. We trusted his assessments and went by his recommended price. It was not like we put offers on 10 homes. This was only our second offer. Even if he is right, we were appalled by the way it was conveyed to us. He could have waited for a day or two and told us in a nicer way. I still don’t think he is right. After hearing his words, we panicked and felt pressured. We called our agent back and escalated our offer to 720K. We escalated because of the pressure (which was wrong of us to do) and because our realtor said that once we go under contract, he can ask the seller to pay for closing costs (approx. 10K) and increase our offer amount. That way we will have cash in hand to make those repairs. He seemed very confident that he will be able to get that deal. We agreed to everything he said and asked him to amend our offer. He calls us back and tells us that he couldn’t get the seller agent to agree getting 10K credit. Instead he promised he got us a 6k credit but with a penalty of 1K. Our offer will be increased by another 6K (making it 726K) and we will get only 5K credit. He did this without our approval and not fret over these “minor” details. I am not sure how these details are considered minor. We felt very pressured and refused to make any additional changes to the offer. Even after that he tried to convince us by telling that he will figure out a way to save us couple of thousand towards the end somehow and that we should not lose this home over a few thousand dollars. We made it clear that we don’t want to do 725K on this particular home knowing the structural and water damage. He sounded angry and once again told us “You should from now on stop looking at all single family homes. Even if something comes in at 650K you should not consider it since in a hot market it will escalate higher. Look for something else in your budget range.”

We were shocked at how rude he was to us and telling it on our face right when we lost a home we liked. I am not sure if we have unrealistic expectations or if we should change our agent. Is he right? Should we stop looking at single family homes? Even if he is right, we are appalled by the way it was conveyed to us.

I apologize in advance for a very long post.

We are first time home buyers in a very competitive market (Seattle). Neither me nor my wife work in the IT industry so we knew our limitations and went in with realistic expectations. We chose Flyhomes as our realtor since their “All Cash” offer seemed helpful in a multiple offer situation (where Flyhomes purchases the house for all cash and then sells it to us). We discussed our expectations and financial situation with our client advisor (just a fancy name for realtor). We told him that we are primarily interested in a single family home and are comfortable with a budget of high 600s and are willing to go up to low-mid 700s if we really loved a home. We were willing to get old beaten up home since that is what is available at our price range. We made it clear that we are willing to buy an old home and slowly make upgrades over a time. We also made it clear that if we go with something in our higher end (700s) we don’t want to get a home that requires significant immediate repairs (like immediate replacement of roof or structural reinforcements etc).

We started with a clear idea and we looked at homes that fit our bill, except 3 or 4 homes that were above our price range. We looked at those homes because we really loved the location and the listing photos. I don’t think it’s terrible of us to ask Flyhomes to show us homes that are beyond our means.

We found a home that we really liked that was listed for 630K. It was move-in ready but very old/original (late 80’s). We told our agent that we like the location and its layout, and we want to put an offer. Our agent told us to start with an All-Cash offer at 670K and then revise it based on other competing offers. We immediately agreed and did an inspection (first few inspections are free with Flyhomes). Depending on other offers, we were willing to escalate another 10-20K. Unfortunately, someone put an offer at 760K and we lost the home. Everyone including the seller was shocked because no one expected an offer that high. Flyhomes agent agreed that this home was in no way worth 760K and we should not even think about matching it. We felt sad but moved on.

Last week another 1950s home came on the market for 670K. This home came on the market on late Thursday evening and had an had an offer review date of following Tuesday. The pictures looked good and the location was ideal for us. We toured the home on Thursday night and told our agent that we really like it. He suggested that we move quickly (we also wanted to move quickly) and put an all cash 725K offer by Friday (to beat open house crowd). We told him that we are good with that price if there are no structural issues and if there is no need for any immediate high budget improvements. We proceeded to inspect the house on Friday morning. Unfortunately, there were couple of major issues (in addition to many other minor issues which is the case with any house in our price range). A beam in the crawl space was structurally compromised. The owners cut into one of the load bearing beams and left it unsupported. There were couple of big settlement cracks that extended from exterior of the house to the interior under crawl space. In addition, the crawl space was flooded, and the inspector said that it needs immediate installation of French Drain around the house. He estimated the cost of approx. 20K to resolve flooding issues (which needs immediate attention). After the inspection, me and our agent agreed that 725K offer might be a little high knowing what we know. So, he suggested we wait until offer review date to see the response and put an offer if it made sense. We agreed with his assessment and waited until offer review date. Our agent said that since we already did the inspection, there is no harm in putting an offer at our comfortable price. So, we put an All-Cash offer of 705K, which our agent seemed to have no problem doing at this stage. Being first time home buyers, we were not very comfortable with the project we must take on immediately and that 725K will not be financially manageable to us. After submitting the offer, the seller got back to us asking if we want to revise our offer since they really liked “All-Cash”.

We refused to increase our offer and said that we stretched as much as we could for this particular home. We again explained to him that 725K (or higher) is not an issue for us if we don’t have to chalk up addition 15-20K immediately. His immediate response (in his exact words) was “If you can’t escalate to 725K for this home then you should stop wasting time and stop looking for single family homes. This is a competitive market and you won’t find any homes you want at this price point.”

We were shocked to hear these words. We did everything he asked for. We trusted his assessments and went by his recommended price. It was not like we put offers on 10 homes. This was only our second offer. Even if he is right, we were appalled by the way it was conveyed to us. He could have waited for a day or two and told us in a nicer way. I still don’t think he is right. After hearing his words, we panicked and felt pressured. We called our agent back and escalated our offer to 720K. We escalated because of the pressure (which was wrong of us to do) and because our realtor said that once we go under contract, he can ask the seller to pay for closing costs (approx. 10K) and increase our offer amount. That way we will have cash in hand to make those repairs. He seemed very confident that he will be able to get that deal. We agreed to everything he said and asked him to amend our offer. He calls us back and tells us that he couldn’t get the seller agent to agree getting 10K credit. Instead he promised he got us a 6k credit but with a penalty of 1K. Our offer will be increased by another 6K (making it 726K) and we will get only 5K credit. He did this without our approval and not fret over these “minor” details. I am not sure how these details are considered minor. We felt very pressured and refused to make any additional changes to the offer. Even after that he tried to convince us by telling that he will figure out a way to save us couple of thousand towards the end somehow and that we should not lose this home over a few thousand dollars. We made it clear that we don’t want to do 725K on this particular home knowing the structural and water damage. He sounded angry and once again told us “You should from now on stop looking at all single family homes. Even if something comes in at 650K you should not consider it since in a hot market it will escalate higher. Look for something else in your budget range.”

We were shocked at how rude he was to us and telling it on our face right when we lost a home we liked. I am not sure if we have unrealistic expectations or if we should change our agent. Is he right? Should we stop looking at single family homes? Even if he is right, we are appalled by the way it was conveyed to us.