Market Wise Q&A column: How Do We Handle Late HOA Documents?


Pat Kapowich for the San Jose Mercury News

Q: We are selling our current home in a gated community that has a Homeowner’s Association (HOA).  The buyers of our home removed their financing contingency and we did likewise on the larger property we are buying. We understand our large deposit is currently non-refundable.  However, no one ordered the HOA documents for our gated community until two weeks into our sale.  Our buyer still has an open HOA contingency to be removed five days after receiving the HOA documentation. Now the buyer and her agent are asking a multitude of questions about the HOA.  To make matters worse, the buyer had her company accountant review the HOA spreadsheets and claimed unsound accounting practices.   What do other sellers do in a situation such as ours?




A:  Like you, they wake up exhausted every morning due to sleepless nights.  That is until they take ownership of the transaction and quickly give the buyer the benefit of the bargain.  Quickly does not mean in a haphazard sense.  You and your team already traversed that road by not ordering the mandatory HOA documents the minute you decided move. If you had ordered the over two-dozen mandatory HOA documents two-weeks prior to any sale, your earnest money deposit would not be in harm’s way.  Plus, your invaluable buyer would have known upfront what she was buying and she would not be losing sleep, too.


Hand carry the stack of HOA documents to a specialist and have them deciphered.  Deliver that report to the buyer ASAP.  If your HOA expert shows the HOA is financially upside-down, for example $3,500 or $6,500  “per door,” let it be clear now.  If the buyer threatens to walk; offer to pay some or all of the proposed deficit. Or, you can avoid these slippery crossroads altogether and losing this sleepless buyer, as well as your large earnest money deposit by negotiating paying the “per door” deficit. In return, the buyer will agree to promptly remove her HOA contingency.  Cheer up; it’s cheaper than losing a buyer, a deposit, a larger home, and the devaluation of your now stigmatized home that couldn't sell.


Contact Pat Kapowich, The Santa Clara County Association of Realtors President's Choice Award Winner for 2013 at (408) 245-7700 and/or