If you are in the market to buy or sell a home in an HOA (Home Owner’s Association), you’ll want to know what a resale certificate is and how much it can potentially cost you in a transaction.
A resale certificate is issued by the HOA to the buyer of a home in the association. It will detail the association restrictions and guidelines, as well as offer assurances that there are no unpaid association dues by the current homeowner, that the account is up-to-date, and that there are no lawsuits to common areas. This can offer peace-of-mind to the buyer as well as inform the buyer of any potential conflicts they may have with association rules prior to purchasing. The certificate should also include association budget and planned expenditures.
So who pays for the certificate to be issued, and what is the cost?
The cost of issuing a resale certificate can vary widely within different associations, typically anywhere between $100 to $600.
As far as who pays, buyer or seller, is up for negotiation. Buyers have the option to waive their right to have an updated resale certificate issued, though the title company will still order a statement of account from the HOA in order to issue clear title.
In the sales contract, buyers have the option to terminate the contract and have their earnest money refunded within 3 days of receiving the resale certificate if they find terms unsatisfactory, and can terminate the contract and have their earnest money refunded if the resale certificate is not received or unable to be obtained by not fault of their own within the time required by the signed contract.
Whether you are a buyer or seller of a home in an HOA, it will be very helpful to consider the cost of the resale certificate early in the transaction and understand how it can effect the outcome.
Work with a knowledgeable agent that can help you navigate the best terms for you! Contact Mega at 979-297-6000