A family that purchased a townhouse in Fullerton found themselves looking closely at HOA regulations only after moving in. HOA, simply put, refers to the fees paid by residents to manage community facilities and aesthetics, along with the organization that oversees it. This family learned too late that they needed HOA approval to install a separate structure in their yard and had to revise their plans due to pet quantity restrictions.

The average home value in Fullerton is $916,245 according to Zillow, which is a 4.0 percent decrease from a year ago, and the average time for listings to go under contract is about 10 days, which is relatively short. Other reports indicate that the median sale price can exceed $1 million, so it's good to be aware that there can be significant variations depending on the type of listing.

When looking at properties with an HOA, it's essential to obtain not only the monthly fees but also the governing documents, known as CC&Rs, before signing a contract. In simple terms, these documents outline the rules regarding what can and cannot be done within that community. Communities with insufficient HOA reserves may later impose special assessments, so it's wise to check their financial status as well.

When budgeting, remember to add the HOA fees to the mortgage principal and interest to get an accurate picture of monthly expenses. California property tax, under Prop 13, has a base rate of 1 percent of the assessed value, but when local assessments are included, the actual burden often rises to the mid-1 percent range. For properties in the $900,000 range, property taxes and HOA fees can take up a significant portion of the monthly budget.

To simplify, keep in mind that HOA fees and property taxes can vary slightly each month, unlike the fixed mortgage principal and interest. In a market where properties are quickly going under contract within about 10 days, failing to obtain a pre-approval letter in advance could mean missing out on a desirable townhouse. It's also advisable to consult with at least three different lenders to compare terms, as this can enhance your negotiating power when making an offer. Inspections should not be overlooked, as they provide an opportunity to assess the condition of the HOA's common facilities as well.

During inspections, it's important to check not only the condition of the common facilities but also the plumbing and roofing of individual units. There are often distinctions between what the HOA manages and what individual owners are responsible for, so knowing these boundaries in advance can prevent confusion later regarding who pays for repairs. It's also wise to calculate closing costs ahead of time. For a property priced around $916,000, closing costs, which typically range from 2 percent to 5 percent of the sale price, could be approximately between $18,000 and $46,000. Obtaining pre-approval before viewing properties is advisable. In simple terms, if you start viewing properties without a pre-approval letter, you may lose out on a preferred townhouse due to being lower on the offer list. Consulting with at least three lenders to compare terms can also be advantageous in negotiations. Additionally, it's important to remember to set aside some funds for the initial months of occupancy rather than using all reserves for the down payment.

The Fullerton school district, which is popular among Korean families, has a significant number of properties with HOAs due to the prevalence of townhouses and condos. While referring to GreatSchools ratings, it's advisable to verify the assigned school directly for the specific address before purchasing. For families relocating from out of state, the concept of an HOA may be unfamiliar, so taking the time to read the governing documents thoroughly before signing a contract is recommended. Developing the habit of obtaining the governing documents in advance can significantly reduce conflicts after moving in. This article is not investment or legal advice, and it is safer to consult with a real estate professional, including reviewing HOA documents, before finalizing any contracts.