Thinking of buying your first home? Don’t make this mistake.

Jessica and Mark, a young couple in their late 20s, were excited to buy their first home in Colorado. After months of searching, they found a townhome in a Denver-area community that fit their budget. The homeowner association (HOA) dues seemed reasonable, and the neighborhood had great amenities—walking trails, a clubhouse, and a fitness center. Their real estate agent assured them it was a great investment, and eager to start their next chapter, they put in an offer.

What they didn’t realize? The HOA’s finances were a ticking time bomb.

Less than a year after moving in, the HOA board announced a special assessment of $12,000 per homeowner to cover years of neglected maintenance. On top of that, monthly HOA dues were increasing by 30% due to rising costs and a severely underfunded reserve.

Jessica and Mark were already stretching their budget to afford their new mortgage, and the unexpected expenses made it impossible to stay. They had no choice but to sell.

But when they listed their home, they faced another issue—buyers were wary of purchasing in a community with major financial problems. Home values in the neighborhood had dropped, and the townhome they had bought for $400,000 was now appraising for $365,000. After months of trying to sell, they finally closed—but after real estate commissions and closing costs, they lost over $40,000. Put another way, they lost 50% of their initial 20% down payment. If they had put less than 10% towards the down payment, they would have actually owed the bank extra money just to sell the home.

Had they reviewed the HOA’s financials before buying, they would have seen clear warning signs: low reserves, rising delinquencies, and deferred maintenance issues. But like many first-time buyers, they assumed the HOA was in good shape.

That’s where Insight Financial Consulting (IFC) comes in.

At IFC, we analyze HOA financials so first-time homebuyers don’t walk into costly surprises. Making a mistake that could potentially cost you your entire down payment is not how you want to start your home buying journey. Our HOA financial reviews give you a clear picture of an HOA’s financial health, helping you spot red flags before you buy. Please contact us today.