Short Sales are a Good Thing For Olathe and Overland Park Subdivisions with Home Associations

Short Sales are a Good Thing For Olathe and Overland Park Subdivisions with Home Associations


What? Short sales are a good thing? What are you talking about?

Hear me out . . . 


As an Olathe or Overland Park homeowner does not pay their home mortgage, their home association fees go unpaid. Since home associations are operating on thin margins, the home association really needs the money. If the home owners association doesn't receive the unpaid fees, they can either take the homeowner to court, raise the home association fees to the remaining homeowners, cut expenses or discontinue services. As you can understand, the unpaid Home association fee of one home owner may affect the remaining paying home owners of an Olathe or Overland Park subdivision with an home owners association.


Now lets say the home owner total defaults and the home is foreclosed on by the mortgage lender. There is a good chance that the home association will lose the home association fee from that property for up to 2 years in Olathe and Overland Park. 


That is a big chunk of change for many home owners associations to absorb.


Now add to the equation, 3 or 4 defaulting homeowners and the home owners association (HOA) is taking a very big hit.


I have seen quite a few home owners associations raise their fees due to increased foreclosures in their subdivisions.


One such home owners association (HOA) , added $500 to their HOA fee to their home owners for next year. Another HOA, added a $2000 fee for their HOA fee due to increase non-payment of HOA fees and increased maintenance fees.


So as you can understand, a foreclosure in a subdivision with a home owners association can directly affect the remaining home owners.


So how can a short sale help a subdivision with a HOA? 


When a home is sold as a short sale versus after a foreclosure as a REO, the HOA fees gets paid at closing. The remaining home owners do feel the affects of the decreased home value, but they don't feel the direct affect of the missing HOA fees.


Home owners in subdivisions would be smart to encourage defaulting home owners to attempt a short sale versus letting their home go to foreclosure.




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Blog post written by the Dowell Taggart Team of RE/MAX Premier Realty 

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