Management

Avoiding Home Buyer Dissatisfaction

Laura Ziff, president of Associated Asset Management, a Phoenix-based real estate management firm whose clients include Richmond American, D.R. Horton and Pulte, advises a beefed-up approach to homeowners associations with general tips
By Patrick L. O'Toole, Senior Editor | March 31, 2003

Laura Ziff, president of Associated Asset Management, a Phoenix-based real estate management firm whose clients include Richmond American, D.R. Horton and Pulte, advises a beefed-up approach to homeowners associations with these general tips:

  • Charge honest, upfront assessments. Competitive pressures often lead builders to sell homes with low assessments that bear no relation to real costs for amenities. Customers get dissatisfied when assessments must rise precipitously.

  • Build a few extra dollars into assessments for unforeseen items. This won't chase off buyers but will help reduce a builder's subsidy of amenities.

  • Do a careful reserve study as soon there is adequate information to complete the work. A sure way to create dissatisfied buyers is to leave too few dollars in reserve (aside from operating expenses) for repairs and replacements. Revise the study annually.

  • Review the reserve study internally. A builder's land team should ensure the accuracy of quantities and measurements.

  • Plan and document exactly how "reserves" will be funded. Some builders fund at the end of a project, some annually and some monthly. This ensures adequate funding during a multiyear build-out.

  • Provide blueprints and "as-builts" that accurately reflect what exists at the time of turnover. This helps future board members answer questions arising months or years later.

  • Provide HOA0 training for sales personnel. Builders get into trouble when buyers close on homes expecting to park a 30-foot RV in their yard based on a salesperson’s misguided assurances.

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