Why are those Silicon Valley HOA dues so high?

Homeowner Association DuesWhy are some HOA dues so high in certain Silicon Valley townhouse or condo communities?

If you are shopping for a Silicon Valley condominium, townhouse, loft or other property that’s part of a home owners association or “HOA”, you may find yourself flabbergasted at some of the dues being charged in San Jose, Los Gatos, Saratoga, and all over Santa Clara Valley. Today we’ll go over what may be happening in them to cause this problem.

HOA dues may cover a number of things, and if it’s a luxury complex with luxury amenities, those dues will be high:

  • common areas, such as driveways, parking, pool, fitness center, rec room, elevators, landscaping, golf course membership, etc.
  • insurance: regular homeowners or blanket insurance but perhaps also earthquake or flood insurance
  • reserve account funds for planned improvements may have run too low and need bolstering (repainting, termite work, reroofing, repaving, pool plastering etc.)
  • covering the defaults from units where the owners are in or about to be in foreclosure

What is the range of pricing for HOA dues in Santa Clara County and Silicon Valley?

Depending on the age of the property and the amenities, the dues may run between $300 and $350 on the low end (newer, no amenities) to close to a thousand on the high end (The Villages retirement community has extraordinarily high dues but they may include membership in the golf course too). I’ve seen some in Menlo Park closer to $2,000 per month!

“Normal” is anywhere from $400 to $500 per month for a typical condo or townhome community.

Dues over $600 per month will deter investment buyers.  Dues over $700 per month will deter almost everyone! (more…)

Buying a Home Warranty in Silicon Valley? What You Need to Know to Choose Well.

What is a home warranty - photo with very old furnaceAre you considering purchasing a home warranty for your Silicon Valley home? The home warranty gives the buyer and seller both “peace of mind” regarding any surprises after the close of escrow. It is a one year policy, so at the end of that year, the homeowner may want to renew it or purchase a new policy.

If you are not sure what a home warranty is, or how it differs from home insurance or title insurance, please read this article: Homeowner’s Insurance, Title Insurance and Home Warranties on this same site.

Not sure if you need a home warranty or not? If your property is close to new and the appliances are all under warranty, you may not want to spend a few hundred dollars for this coverage. For older homes that you plan to live in without renovating much right away, a home warranty is a really excellent protection. In between? Read the policies on the various providers websites. As with all types of insurance, there are limitations, exclusions, and possible add on items or riders.

How do you make the best selection for your needs?

Its a good idea to get some basic information on plan coverage generally. The California Home Service Contract Association (CHSCA) provides useful information on this subject. The link is     http://www.homeservicecontract.org/state-associations/california/    Request brochures (or read them online) from a few of the companies listed below. There will be some differences in coverage, cost, and co-payment.  This page lists members who sell home warranties in CA.