Follow along if you don’t mind …
Most homeowner associations in the Phoenix real estate market charge some sort of transfer fee ranging from a hundred dollars or so to a thousand dollars or more.
While living in an HOA, sellers are paying the homeowners association not only for the amenities of the community but also the administration of the HOA.
Sellers in Arizona are required to provide a buyers a slew of HOA documents including the rules and regulations, CC&Rs, financial statements and the like. Since virtually no one ever keeps any of these things when they purchase and since changes are inevitable, the place where sellers get this info is the HOA.
It would stand to reason that when the seller needs the packet of information sent to a buyer, the HOA would do so using either the transfer fee to come or the dues collected as payment.
These days, sellers more often than not are having to pay an up front fee to this third-party company to provide the HOA disclosure packet to the buyer. There’s no getting around it by contacting the HOA directly; many have washed their hands of this function completely.
But Jonathan, you might say, we’re only talking a couple of hundred dollars. And I’d agree. Except the transfer fees aren’t being reduced by that amount and, honestly, how much time is expended by an HOA to perform a drive-by of the house to make it conforms to the CC&R’s when these drive-bys already are performed regularly and then to change a name in a database?
It’s a bit of a racket, to be perfectly blunt. And it’s also thoroughly unavoidable.
Welcome to the beginning of the outsourcing of the Phoenix real estate sale.