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The Resale Lifecycle: What HOA Boards Should Know About the Buying & Selling Process

The popularity of homeowners’ associations (HOAs) has been trending upward in the last several years, and HOA communities are growing exponentially. While the buying and selling process can be long and complicated outside of a community with an HOA, the paperwork and additional parties that are often required to complete the sale of a home within an HOA can make it even more cumbersome.

For an HOA’s board of directors, the responsibility lies in facilitating the process with honesty and transparency—and making that first connection with the homebuyer a positive one. We break down the documents necessary (those within a resale package), the start-to-finish lifecycle of a resale, and tips for when and how to welcome a new homebuyer to your community with helpful insights from Tiffany Dessaints, CM, CMCA®, AMS®, PCAM®, Senior Executive Vice President, Associa Principal Management Group of North Texas.

What is an HOA Resale Package?

A resale package is a packet of critical information provided to those purchasing a condominium or a home in an association. Usually, it’s distributed from the buyer’s real estate agent to the buyer and may come in a digital or print format, depending on the association. Generally, HOAs in the United States are required to provide all documents and disclosures to a new owner prior to accepting or finalizing a deal. What’s included in a resale package can vary from state to state, but typically, it’ll include a resale certificate, which is an informational document that pulls key data from the association’s governing documents, as well as current owner account balance information, and closing fees due to the community or management company.

“In addition, a resale package may contain community documentation (governing documents, insurance, reserve studies, financials, etc.) as well as any litigation disclosures, onboarding or settlement documents, and compliance-related information.”

- Tiffany Dessaints, CM, CMCA®, AMS®, PCAM®, Senior Executive Vice President, Associa Principal Management Group of North Texas

The Resale Timeline

Governing documents should outline any procedural processes for buying and selling a home within an association. And, the HOA board or community association manager should be available to facilitate a seamless homebuying journey. The process for buying a home with an HOA varies significantly from person to person and state to state. Generally, the timeline might look like this:

Step 1: Buyer communicates to their real estate agent that they intend to buy a house within an HOA by putting in a formal offer for a specific home.

Step 2: The real estate agent for the buyer or title company will order a resale package 30 to 60 days pre-escrow. Typically, an HOA has five to 10 business days to provide the resale package. In some states, there’s a different process for accounts in collections with attorneys. This usually involves either different packages being ordered from separate entities, or information being communicated through the attorney from multiple avenues.

“A homeowner does have the ability to order this information, as well, after an offer has been made. Most managing agents for the HOA have a website or application used to monitor and fulfill.”

- Tiffany Dessaints, CM, CMCA®, AMS®, PCAM®, Senior Executive Vice President

Who pays for the HOA resale package?

Some states require that the seller, or homeowner, pay for the resale package while others assign that financial obligation to the buyer. The question of who orders it usually depends on who pays for it.  

Step 3: Buyer reviews the resale package and communicates with their real estate agent the questions or concerns they have and any next steps in negotiations with the seller.

“Any rejections, questions, concerns, or negotiations will filter between the buyer and seller. If a potential homebuyer does not agree with something in the association’s documents, their real estate professional will educate them on their rights once becoming a new owner, and how to present their concerns to the board of directors. Ultimately, they may also discuss the reality of how these situations are handled.”

- Tiffany Dessaints, CM, CMCA®, AMS®, PCAM®, Senior Executive Vice President

Step 4: Buyer has at least 48 hours to seven business days before closing to review the resale package depending on the state.

Step 5: If the buyer accepts the terms of the resale package, agrees with any negotiations with the seller, and has signed off on any necessary inspections and other process requirements, the buyer then may close on the house. If there are any pending questions or unresolved issues, this step may be delayed or a closing may not happen at all.

Step 6: Once a buyer has closed on a house, the title company prepares a settlement package that they send to the community manager or specified entity on the statement of account. This is how the board knows of a change in ownership.

When & How to Welcome a New Homeowner

After a lengthy buying process, new residents of an HOA are typically eager to move into their new community, meet neighbors, and start fresh. As community leaders, it’s the board of directors’ job to foster and nourish that positivity with a warm welcome. But when is the appropriate time for a board to connect? And how?

With inspections, approvals, and signatures often delaying a homebuyer’s move-in date, it can be difficult for a board to gauge not only if a new resident will move in, but also when it’ll happen. Here are some tips to consider:

Be proactive. Consider the first touchpoint your association will have with a potential new resident. That might, in fact, be the resale package or another communication of vital information. Use that first touchpoint to communicate important data—and offer a soft welcome.

Keep it simple. A soft welcome might be a short welcome letter introducing the board of directors and highlighting some of the features of the community. Or, you can send a fact sheet with information a resident might need when they first move in, like a temporary gate code and architectural requirements.

“Additionally, you might include the phone number to your customer service line or contact information for people or services that are crucial to moving in and getting set up in a new home.”

- Tiffany Dessaints, CM, CMCA®, AMS®, PCAM®, Senior Executive Vice President

Follow up with a welcome packet. Once a board has confirmation that a buyer has closed on a house, promptly deliver a welcome packet or a homeowner’s manual that the resident can reference again and again. The welcome packet should include all detailed information, resources, and tools needed to make HOA life enjoyable.

Moving out of Your HOA? Here's What You Need to Do

According to the U.S. Census Bureau, a person will move houses just over 11 times throughout their lifetime. But, when your home is part of an HOA, even the moving pros can be left wondering what to do. Read our article, “Moving Out of Your HOA? Here's What You Need to Do,” for the expert advice you need to successfully move out of your HOA home.