buying in subd w/o no active HOA (Alpharetta, Forsyth: short sale, HOA fees)

[twowolves]

What would be the cons of buying a home in a subdivision that was a victim of the housing crash. Pros?

The builder went under after building only 16 homes, the subd when closed out will be 130 homes.

The beautiful pool and amenities were built and completed but the existing residents are taking care of it. And mowing the common areas etc just to keep the subd nice.

We found an awesome short sale in there, one of the 16 built....and want to make an offer. But are hesitant due to the HOA issue.

There does exist a 'covenant', 25 pgs long but it's 'old' and there is no HOA to enforce it. The HOA fees/yr are $798 but no one is paying as there is no HOA to collect and/or maintain amenities.

Is this enough reason to NOT continue to be interested in this short sale? The neighborhood is in an awesome area, close to the hwy, and home is immaculate, and like-new. (2007) For VERY cheap.

I know it's a risk but is it worth taking?

[gtcorndog]

Run away.

Run away fast.

1st, I would advise against buying into a development that has that number of empty lots. Add in the fact that there is no HOA to enforce any sort of maintenance of the facilities and enforce any of the rules, and I would not even consider it unless I could get it very, very cheap. I'm talking like 40-50% cheap. There is just too much risk and too great of a likelihood the development flounders for my liking.

[SW30303]

Don't buy that. No way, even at a discount. There are plenty of other places available you will like better with more established neighborhoods.

[lorilove]

What concerns me is the pool and amenities with no HOA. My sd was in the same situation in the 1980's but no pool or amenities. It bought in the 90's and it has been a wonderful place to live but the cons of no HOA is that there are homes not in the best shape and there is nothing you can do. Just about everyone fixes their place up eventually but that can be after a few years of looking sad. Most homes have repainted in whatever color which has been a good and bad thing but I have learned that a freshly painted and well taken care of yard looks nice regardless of the color.

The common areas would be my concern. We have very little and we ask for donations each year. The residents do the work and all is well. But a pool etc is going to take more than just donations. The way the conventants are written (I have mine) is that the builder controls the HOA until the sd is complete at which he hands it over to the committee established by the homeowners (those may not be the exact legal words). When that does not happen, the HOA basically become extinct. Trying to form one later is almost impossible and requires like 100% of the residents.

The neighborhood would do themselves a favor to try and legally establish that HOA now while there are only a few involved. This will certainly help them in resale values later.

[10 feet tall]

No way. Not in a million years. Run, don't walk, away from that.

[cowboyxjon]

If there isn't an HOA to collect fees, who is paying to run and maintain the pool?

[twowolves]

Well the prior established HOA fee was 798/year. Then the builder went under. There are covenants, I just got a copy emailed to me but who would enforce them right now? Will the old covenants stand even when an HOA is do-able?

Today I tracked down and called one of the residents already in there, on the street of the home we like. She said out of the 16 homes, many are contributing and helping with taking care of the pool, and common areas. The ones who contribute, are able to use the pool, otherwise not.

She said that a few wks ago, a bank was in there clearing lots for we guess, a builder to buy. About 23 lots. So, it seems something is moving.

The home we like originally (new) sold for 329k in 2007 and now is a short sale for 199k. So, a huge discount. The total sf is over 3100....$61/sf.

The whole 1st floor is wood. Granite in kitchen. Back deck huge at 29x16.

We are very tempted. You guys say run but don't really say why. Or, what could happen terrible.

[bdawk]

What happens if the common areas and pool are not properly maintained? You are now stuck in an even less appealing neighborhood.

What if the pool needs costly repairs? Who would pay? Would they pay? Who keeps those who do not pay out? What if someone gets hurt at the pool and sues?

What happens to the rest of the undeveloped lots? Are houses built there of similar size and quality? Would they throw a bunch of townhouses or condos there?

What enforcement is there for others to keep up their property now and with that neighborhood values?

That's all I have for now.

[vagabundo94]

Sounds like a power vacuum just ripe for the right person to come along and stage a coup. Think about it - since HOAs have more power than God, you can come in and exert complete dictatotrial control over the other 15 home/residents in the area, if you do it right. It could be like having your own little country. The power would be intoxicating, and undoubtedly, fulfilling.

(just kidding - run far, far away)

[mich2fla]

During our house huting, we did see some houses in uncompleted subdivisions. In some subdivisions, the 2nd builder came in and put up his type/style of houses. You can tell that the 2nd builder is putting up smaller and cheaper houses compared to the original builder. I forgot what subdivision it is off hand but it was in South Forsyth High school with an Alpharetta address. I'm sure those with the original home builders weren't too pleased about it.

We decided to err on the safe side and bought a house in the Fieldstone Enclave subdivision. It's nearly 95% built, all by the same builder Pulte. We got this house for a good deal.

Just consider the what ifs. What if you need to sell next year due to job relocation, the next buyer will be asking the same questions you are asking today with the number of empty lots. On the other side of the coin, if you are here for the long haul and banking on a beautiful, completed subdivision in a few years, then you will come out ahead. You will need to decide and live with it. Is the market improving? Will the next builders put up similar size/quality houses in the neighborhood?

If it were up to me, as a person relocating from out of state, I will keep looking.

Good luck in your decision!