Author: Ray Morton

Understanding HOAs and buying homes


Understanding an HOA

Home Owners Associations (HOA) are the governing entity for most suburban communities. They are a both a good thing and can be…. Just a thing to the owner of a property.

An association manages and maintains the common/shared areas of a community. They are also in charge of  enforcing any covenants or restrictions (CCRs)that a community may have adopted.  When a community has an HOA, you as a home owner must pay the dues on time, and remain in compliance to the CCRs of the community.

There are a few things to know about buying/selling with properties that have an HOA.



Most HOAs charge dues/fees. Some collect either monthly or quarterly.  You will pay the association directly.


Where there are governing entities, there are Laws. In this instance incorporated by-laws.  Make sure you run in by the HOA before you spend time and money to do something special or visible on your property. This particularly includes major landscaping, pools, fences, hosting parties, renovations.


Each HOA is responsible for maintaining a budget. Each owner is entitled to a copy of it. As a lender, we want to see that the budget reserves (savings) are over 10% of the bottom line for the budget.  If not, we consider the property non-warrantable, and may not lend on it.

Power to foreclose

If you don’t pay your HOA dues—you don’t stay in your property.   Please be sure to pay the applicable fees when requested.


In a large community, it would be really easy to find several properties where people decided to show their personality. The uniformity practice of an HOA helps to ensure keep the community as original as possible, and can  positively impact the market values as well.

HOAs can be a great thing for some, but if mismanaged, can be a nightmare for others. Be sure to ask your realtor important questions about the community before you agree to purchase a property.   If you need expert advice, we would love guide you through your home purchasing process.

Contact us today! Morton Malloy Realtors 888-362-1706

Home Purchases, Home finance, and Appraisals


Have you ever wondered why you must get your home appraised when financing?  It is required to tell the lender several things.  The most important are the value and condition of the property.  So many factors determine if the property is eligible for financing.  Here are the key things possible outcomes you need to understand about your pending property for purchase.

Desired Values

The property value tells you how much the home is worth.  Values are determined by several factors, and fluctuate.  The values are a snapshot in time based on comparable sales.  It is an opinion of one person’s research based on market sales performance. A certified real estate appraiser creates an appraiser.   Lenders use this value to determine your equity and Their risk position as a percentage.  Lenders call it loan to value.  (LTV) An acceptable appraisal value is one that is at or above purchase price.  If refinancing, it is at or above projected value you stated for your required loan the initial credit application.

As Is Value

When you receive an “As Is“ appraisal, this means your home is priced at the indicated value the exact condition the property currently is in.  No improvements need to be made, and there are no notable issues with the property.  This is the ideal status for an appraisal required for most final approvals on financing.

Subject To

When a property is “Subject To” the appraiser is noting that the property is one of the following

  • Structure is incomplete in the example of new construction with a home builder. A final “as is” inspection must be obtained prior to final approval for financing.
  • Not compliant with required living conditions per federal lending regulations. Repairs are required, and a final “as is” inspection is required prior to final approval for financing.
  • The current value is based on future repairs as with renovation or repair financing or construction permanent financing. This loan can close in this condition because the financing makes provision for the final inspection for completion.


Underwriter Red Flags in the Fine Print Comments & Photos

Every now and then, an appraiser brings back a covert notation to the lending underwriter (decision maker) that says RED FLAG!  These messages are suttle, but a trained lending professional looks for them daily.  They show up in fine print comments and photographs.  They say a picture is worth some 1000 words and that is true when looking at appraisal photos.  Some common things reported are damages to the property, wear and tear, mold “black spots”, cracked chipped, peeling paint, cluttered and blocked spaces, safety hazard, and weird floor plans (functional obsolescence).  Another really big thing are mentions and photos showing the proximity to undesirable locations or hazardous objects. (examples are landfills, nuclear plants, gas stations, sanitation facilities)


If you are working with a great realtor, they can always justify the value of the offer price you are submitting so that you can be confident.  There are always those unforeseen surprises, but for the most part, getting the value right starts with a great real estate agent.

If you need assistance pricing, selling your current home, or making an offer on a property, we are the RIGHT agents for you!  Contact us today at 888-362-1706 or email us  at