Improving Property Values

Here in FL I have noticed so many things around us are fading or losing their new appearance due to sun and weathering. Our 764 resident HOA here in Port St Lucie, FL recently improved our community appearance for only a few thousand dollars. Over time we tend to drive by the same scenery without really noticing its condition or what a visitor (Real estate agent, potential buyer or family friend)might see. But it's amazing when those faded and ugly items get restored. We actually have about 72 pad mounted transformers and they are always located in the front yard. Over the last 10 years these transformers have totally faded, stained or rusted. Not anymore! We have had them cleaned up and the paint restored to where these transformers have their new color and have a gloss surface to shine. We have also cleaned and restored our metal cluster mailboxes that were dirty and faded. They look brand new now, and we saved a ton of money as buying new ones would have cost us over $22,000. We are also looking to restore over 400 single family home mail boxes and only purchasing a few dozen new ones for replacement.
My point is.....Spruce up the faded items that get no attention. A clean and restored paint finish on many items throughout the HOA adds to a pleasant viewing as well as helping the overall property values for everyone. We have beautiful transformer covers, light poles, mailboxes and signs that are shining like brand new and we have spent under $10k for this large HOA. We are happy and the restored items mentioned will now be UV protected for over 7 years.

Welcome to the forum ...

Thanks for the insight on how a little TLC can go a long way for the appearance of your HOA.

Melissa wrote: "...if you don't keep your neighborhood in good condition, it may lead to slow sales. People may lower price[s]..."

As your quote above shows, whenever you bring up your schtick about "values"--which is really often, Melissa-- you tend to contradict yourself.

How is that a contradiction? Your HOA doesn't look good, then people don't rush in to buy homes. The longer a home stays on the market the more likely a seller will lower the price. Still doesn't sell, then they may make it rental property or let it go to foreclosure. Now your HOA has more rental homes and lowered sales prices. The Home values is based on what homes nearby sales for...

My HOA, houses sold within a few hours or days when it looked good. When it was not in good condition, homes were up for sale for months. Prices went low.

NOT "Protect" but influence. Home values are still based on solid real numbers. It's not based on how attractive your home or neighborhood is. Again I did not buy a house because I hated the wallpaper. Did the House value go down? No.

Again a HOA does NOT keep or maintain home VALUES. They are SALES TOOLS. Created to keep home buyers interested in purchasing. Hence why there are restrictions and shared amenities.

High rentals, short sales, and foreclosures effect home values or loan package loan availability. High rentals FHA and other mortgage companies stop offering their loans or refinance rates increase. Short sales usually means the house sells for below value just to avoid foreclosure. Which lower sales price can have a snowball effect. The more foreclosures your area has, the more risk to banks to offer loans. Plus those homes sell for very low prices again effecting what homes are selling for in the area.

Home values again based on REAL numbers. Sale prices high, home value higher. Sale prices low, home value lower. Neighbor's house has an outhouse in front yard? Best be in a HOA that can restrict that.

That is saying good-bye to a SALE not a VALUE. Every house has a value. Value is based on your home's APPRAISAL. That part of the home refinance or home buying process. Home APPRAISAL is where your home VALUE lays. It's not what you see when driving by a home.

You want to know what your home is valued/worth? Pay for a home appraisal. Condition can be a factor but not unlike the condition of when selling a car. (Fair, good, excellent). A HOA has an appraisal as well. It comes in the form of a HUD form. Which tracks things such as rental rates, liens, lawsuits, HOA levied foreclosures, or dues collections. FHA and other loan programs use that as a gauge for the "health" of a HOA. High rentals, lawsuits (either way), or collection issues effect banks/loan companies rates/offerings. Again based on REAL numbers.

AGAIN HOA is an INFLUENCE it's NOT keeping REAL numbers. Can you measure the amount the color of your house into your house sale? Did someone pay 5K cause your house is brown but would have paid 10K if it was Red? Can you charge 10K for the color of your home then? Or can the HOA make sure your home's color/paint condition stays in good condition and in a color scheme? Did the HOA then made sure your home is now paid 10K if color scheme is Red? Can you sue the HOA then for 10K if you don't get that for it?

Marketing is NOT a value. It's an INFLUENCE to make you buy something. It's not measurable. A home sale is measurable and has value.

Things must have a measure to them to have a value.

TimY I love this post and I live in the same town! We have the same issues. I love that the city is covering all the electric boxes with beautiful art wraps, I wanted to find out how to do the same inside our development. I agree these little things make a difference. Last summer I had our street signs and traffic signs completely redone, what a difference!

Sorry Melissa, not a valid argument.

As you point out, school systems, etc. also play a part in what buyers are willing to spend.
Would you have a case against the local school system for their part in reducing the desirability of your home, hence reducing your property value?

What about the local businesses?
The police force for the amount of crime in the area?
How about the zoning department who approved different size homes in the area?

Obviously not.

It's simply not a logical nor a valid arguement.

The point others have made is that an HOA maintains common area, common amenities and attempts to enforce a standard of good repair for properties within the development. These actions may attract buyers (just as the crime rate, school systems, transportation options, zoning and type of local business may attract buyers). The more buyers desiring to purchase within the development may result in the seller being able to ask for and receive a higher selling price. Hence, the HOA (just like all the other factors) does have a part in maintaining the property values. However, said value is always subjective thinking of the buyers.

Same as Tim I would respectfully disagree. I grew up around real estate because my mom was a Real Estate Broker. My husband and I could refinance our past properties and I could tell him what the appraisal would be and maybe miss it by less than 5K. In my last HOA the reason we sued the developers was because they changed the CCR’s behind our backs and drastically lowered the construction items. They also did similar in another subdivision in a neighboring city. Two owners ... one in each city decided to sell before lawsuit settled and lost $145,000 on one home and $170,000 on another home. We fought the hard battle to regain what was changed and in the end when finally sold on our home gained $3,000. If they had not screwed us to some extent we could have sold with an additional possible 20K more profit. However, some profit was better than the massive loss others experienced. Sometimes you have to know when to hold your cards and when to fight the hard fight ... because those issues can determine the value and marketability of your property.

Keep in mind most CCR’s will state:

“Declarant desires to impose a general plan for the improvement, development, and maintenance of the property, and to adopt and establish covenants, conditions and restrictions upon the property for the purpose of enhancing, maintaining and protecting the value and desirability of the property.”

Why would virtually ALL CCR’s make any such statement and Courts agree when lawsuits filed ... yet you state otherwise?

However, through exterior change approvals, annual inspections, enforcement of covenants, etc. it does affect your home.

Don't you, Melissa, believe Merriam-Webster Dictionary's definition of value??

Can't your try to to reply to the OP's remarks???

7 years you say? What are you selling?

I am curious, why is it that HOA's have rules, such as can leave garbage cans out, can't have a 20: high shed, can't paint your house pink or purple, must water and maintain your lawns, clean the oil stains off your driveways.

Your dues maintain the value of the common area, while the rules maintain the property values of the units.

Some 15 years ago I was looking a two near identical, new construction, single family homes HOA's. I choose one (A) and never visited the other one (B) until about 8 years later. B was the pit. Some chain link fences, junk cars, etc. The homes were selling for not much more then they originally sold for. I stopped a fellow and questioned him. He said the BOD's never cared. They let people violate the Covenants with impunity. He said there was now a struggle (legally and financially) to restore the place. Need I say (A) was going strong. Home values had near doubled. They simply enforced the Covenants. Some might say to the extreme but, none the less, they did.

Can we agree an inactive, no enforcement, etc. BOD can "kill" home values?

I don't understand why Melissa can't get it!! It's so simple to everyone else. HOA help home values by making them marketable, or more so. The more people interested in a home, the higher the price can be raised.

When I bought my home, I was looking for actual value. I didn't care if there was an HOA or not. I wanted a home that would sell for 20K under appraisal. In order to achieve that, one would normally have to purchase in a not so nice neighborhood and/or by a repo and fix the walls. I found exactly what I was looking for and it was in an HOA! However, the HOA had not enforced the rules against piles of rubbish and inoperable vehicles, so the neighborhood didn't look like a high end neighborhood. In less than 5 years we have nearly 100K in equity; based on appraisals.

That is my proof to you Melissa, that HOA can influence home values AND SINCE influencing them in a positive way is "protecting" them, and influencing them in a negative way is "affecting" them, you are wrong. LOL

Melissa

Every work for a mortgage company? I have, and I helped underwrite thousands of loans. The loan to value is based on the purchase price or the appraised price, WHICHEVER is lower. If the buyer agrees to the $100K price, but it is appraised at $80K, the mortgage company doesn't deny the loan, the buyer pays the difference, in cash. Why in the hell would the seller agree to give up the profit that people have agreed to?????

But GUESS what? The comp prices that are listed on the appraisal report in the comparable column are the price that the loans were SOLD for, not what they were appraised nor what the loan was, but what the buyer was WILLING and ABLE to pay for.

As I said, there is a very good reason why everything is made in China.

Not trying to start another subject that you clearing have no clue about, but a short sale has nothing to do with the home value. A short sale is when the Mortgage company agrees to sell the house for less than what is owed. You bought a house for 250K because that's what it was valued at (what you were willing to pay). The market craps out and now you are paying a mortgage payment for a home that is worth half (what others are willing to lay for it now) of what it used to be. The Mortgage company MAY agree to sell the home at the lower value and that will release you from the financial contract.

You even said it yourself, you bought the home because of the aesthetics. The HOA is the best tool available for that.

Another question I have for you now. Why would you agree to a sale of 75K and have to give 1K back instead of simply reducing the sale price to 74K?

? So the sale can complete via the buyer's bank fraud ?

Only us good Christians think like that

Yes, they do show up. And most of the time forclosures do as well. But i'm not sure it's mandated. Doesn't really matter, though. Whether the bank owns it or someone else bought it through short sale will have little effect on the value.

Incorrect ... Short Sale is when the home was purchased at a higher price such as $400,000 and then later due to cannot sale at the price purchased and tbe owner and bank both agree to “short sale” for a lower price such as $255,000 for the home. Yep ... that happened for a home in my last HOA when the developers illegally changed the CCR’s. The owners decided to short sale before lawsuit was finalized because the issue potentially contributed to their divorce.

It is sad how illegal trash can contribute to destroying innocent families!

RIGHT!!!! What you stated is pretty much what I stated ... LOL. YEP ... Essencially the mortgage lender and owners all agree to a lower price if could not sell at potential higher price previously asked and current market not uphold.

Richard is right Janet. A short sell occurs when the owner can't afford the house payments but does NOT want a foreclosure on their credit record. A foreclosure can do some serious damage to your credit or loan ability/rates. If you "short sell" the property the bank won't foreclose the property. They will agree to you selling at a lower price than owed (not necessarily value/sales price). Which is different in what you are saying.

The bank just wants their money and a short sell helps them Atleast mitigate their losses. It also helps the owner get rid of the debt/home faster. The buyer gets a really good deal. However, if you hear of someone doing a "short sale" it's an indicator they are having serious financial issues.

Once again, I think you missed the mark.

You make it sound like someone can short sell their home simply because they cannot make the payments. That is not true. A short sale IS based on the value of the home.

Example-
Melissa buys a home on the bubble for 400K. 5 years later, the bubble has burst and the value of the home is 250K. Melissa has decided she cannot make the high payment anymore, probably because she realizes she could buy the home next door for 250K at this point. So, she falls seriously delinquent on her loan. The Mortgage company "may" decide to allow Melissa to sell the home at the current value BECAUSE if they foreclose the home will end up vacant, damaged and possibly auctioned at 180K. It does benefit them to short sale as long as the value of the home is considered.

However, if Melissa's home is still valued at 400K and she owes 375K, there is not one mortgage company anywhere that will short sale it.