If you’re selling a home in a community with a homeowners association (HOA), you’ll likely need to pay an HOA transfer fee at closing. This fee covers the administrative costs of transferring ownership records and ensuring all HOA obligations are settled before the sale is finalized. While it may seem like a small detail, failing to account for this expense can lead to last-minute surprises during escrow.
What Is an HOA Transfer Fee?
An HOA transfer fee is a one-time charge paid to the homeowners association (or its management company) when a property changes ownership. It covers tasks such as updating homeowner records, providing financial disclosures, and ensuring all outstanding dues are cleared before the sale is completed.
How Much Does an HOA Transfer Fee Cost?
In San Diego, HOA transfer fees can range from $100 to over $1,000, depending on the community and management company. Some associations also charge fees for providing required HOA documents, resale certificates, or capital contributions for new owners.
Who Pays the HOA Transfer Fee?
In San Diego, the seller is typically responsible for paying the HOA transfer fee. This cost is outlined in the purchase agreement. Since this is a non-negotiable expense in many HOAs, it’s important for sellers to account for it when estimating closing costs. It is also important to understand that many HOAs require this fee to be paid upfront and outside of the proceeds of the sale.
Why Do HOA Transfer Fees Matter?
- Ensuring a Smooth Closing – Paying the transfer fee promptly ensures the HOA has everything in order for a seamless ownership transfer.
- Avoiding Delays – If transfer fees and required documents aren’t settled in time, it can cause delays in contingency removals and closing. Review of the homeowners association documents is a buyer contingency.
- Budgeting Properly – Understanding these costs upfront allows sellers to plan accordingly and avoid last-minute financial surprises.
How Sellers Can Prepare for HOA Transfer Fees
Before listing your home, contact your HOA or management company to confirm all transfer-related fees. Understanding the costs upfront will help you budget accurately and ensure a smooth escrow process, since oftentimes, this fee is required to be paid upfront and outside of your escrow proceeds.
Final Thoughts
If your home is in an HOA community, budgeting for the HOA transfer fee is essential to avoid contingency removal delays or unexpected costs at closing. Since sellers are typically responsible for this expense, it’s best to confirm the amount early in the process. If you’re selling a home in San Diego and have questions about HOA fees, we’re here to help make your transaction as seamless as possible!