The disclosure requirements for HOAs vary from state to state. In some states a seller is required to provide certain documents before a buyer submits an offer. In others, the seller is not obligated to provide any documents until they accept the buyer’s offer. In a handful of states such as Oregon, the seller is only obligated to provide those documents that are specifically requested in the buyer’s offer.
What is most important is that the agents on both sides of the transaction take the initiative by requesting all available HOA documentation at the earliest possible time to prevent the due diligence process from delaying the sale. Listing agents who encourage their clients to acquire information from the HOA at the time the listing is taken are acting in the best interest of the seller and will help to ensure a successful transaction for all of the parties involved in the sale.
The CIDA Report has quickly become a powerful negotiating tool for buyers. Many CIDA clients have acknowledged that they used the information in the report to negotiate a price reduction or other monetary concessions from the seller. Agents and buyers who have worked with CIDA often express the opinion that the CIDA Report is a more important component of the home buying process than a home inspection.
Buyers who purchase a CIDA Report gain valuable insight into the governance and administrative practices of the Board of Directors. The HOA landscape is a loosely regulated environment which is subject to almost no regulatory oversight. As an informed buyer, you are better equipped to become a proactive and valued member of the community; in other words, a leader rather than a follower. In the process, you are helping to ensure the success of the most important investment you will ever make.
The financial stability of the Association should be a paramount concern for every buyer who purchases a home in an HOA, regardless of whether it is a condominium or an attached or detached home in a planned development. If you are not familiar with subjects like reserve planning, then the CIDA Report is critical to gaining an adequate understanding of the HOA’s current financial condition. Nobody will ever care for your money as well as you do, and to properly look after your investment in an HOA you need the CIDA Report.