When buying or selling a home in a community governed by a homeowners association (HOA), there are additional costs to consider—including HOA transfer fees. These fees are often overlooked but can impact your final closing costs if you’re not prepared.
What Are HOA Transfer Fees?
HOA transfer fees are one-time charges paid to the homeowners association (or its management company) when a property changes ownership. The fee covers administrative costs associated with updating records, processing new ownership details, and ensuring all HOA obligations are met before closing.
Who Pays the HOA Transfer Fee?
The responsibility for paying the HOA transfer fee is typically paid by the seller. The terms are outlined in the purchase agreement, so it’s important to review the contract carefully to understand who will be responsible. Many HOAs require the fee to be paid upfront by the seller and outside of your proceeds from the sale.
Once you open escrow, your escrow officer will send you the order form with a payment request (generally paid by credit card). Since the review of these documents are part of the buyers contingencies, it is imperative that the order is placed right away to avoid any delays in your contract timeline.
How Much Are HOA Transfer Fees in San Diego?
The cost of HOA transfer fees varies widely depending on the community and management company. Fees typically range from $100 to over $1,000, with some high-end communities charging even more.
Why Do HOA Transfer Fees Matter?
- Impact on Closing Costs – Sellers should budget for these fees to avoid surprises in escrow.
- HOA Compliance – Ensuring all dues and obligations are paid can prevent delays in the escrow process.
- HOA Documents Review is a Buyer Contingency – The buyer has a right to review all of the pertinent HOA documents before removing their contingencies, as outlined within the purchase agreement. Ordering the HOA documents promptly can help to keep the timeline on track and contingencies removed on time.
How to Plan for HOA Transfer Fees
If you are selling a home in an HOA, check with your management company early in the process to understand all applicable fees. This will help you factor them into your closing costs. And to know whether the fee is required to be paid upfront and outside of escrow, or if it can be rolled into your closing and paid through your proceeds of the sale.
If you are buying a home in an HOA, review the purchase agreement and HOA disclosures to determine whether you will be responsible for any transfer-related fees. Your real estate agent can help clarify these costs.
Final Thoughts
HOA transfer fees are a standard part of buying or selling a home in a managed community, but they can vary significantly. Being informed about these costs early can help you avoid unexpected expenses and ensure a smooth transaction. If you have any questions about HOA transfer fees in San Diego, we’re here to help!