DAVE RAMSEY

Dave Ramsey says: Invest wisely, don’t overpay for your home

May 16, 2023, 1:00 PM

(Pexels Photo)...

(Pexels Photo)

(Pexels Photo)

Dear Dave,

I live in Dallas, Texas, and I’m wondering if I should sell my condo in order to pay off debt. I owe $120,000 on it, and it’s worth around $260,000. Plus, the homeowners association fee used to be $450 a month and has gone up $100 each year for the last two years, so now we’re paying $650. No one has ever told us why the fee went up so much. There haven’t been any major improvements to the complex in the last five years, so I don’t know what to think. Can you give me some advice?

— Daniella

Dear Daniella,

As a homeowner, I’d want some answers by the end of day as to why the HOA fees are so high. I mean, for a $260,000 condo, the fee you mentioned is ridiculous unless the building owners are doing a major renovation, like replacing the parking lot or updating the community’s clubhouse. Even then, it’s crazy! On top of all that, it devalues your condo. Nobody wants to buy a $260,000 condo with a $650 HOA fee every month, especially when the fee has gone up that much for no apparent reason.

There’s always the possibility the company is building up a war chest for improvements in the next year or so. But you have a right to know exactly where the money you pay in HOA fees is going. Ask to see a copy of their financials, and if they won’t do that—or explain why the fee is so high and where the money’s going—you need to sell the place because it’s being poorly managed.

You’ve got to get an explanation. You’re owed one. And, if you try to sell the place, you’re going to have to tell prospective buyers why the HOA fee is so high. Maybe there’s a good reason for it buried somewhere. But without knowing more, as a buyer, there’s no way I’d take this thing off your hands.

There are a lot of red flags fluttering around the situation, Daniella. Even in a place like Dallas, this HOA fee is about double what it should be for a $260,000 condo. I’m not saying this just because I don’t like HOAs, which I don’t. And that’s mainly because I don’t like paying money for something, and then being told by someone else what I can or can’t do with it. But you need some answers for your own information, peace of mind and to give potential buyers an honest answer when they ask why the fees are insanely high.

Lose the headache. Sell it.

— Dave

ENDORSEMENTS

Dave Ramsey

In this article, Dave Ramsey speaks to a college student about financial priorities. (Pexels File P...

Dave Ramsey

Dave says: If I had to sacrifice school, work or cost of living, I’d do the latter

Dave advises Will to continue living at home if it helps achieve academic goals without debt, even if it delays independence.

4 days ago

Compassion and boundaries by Dave Ramsey...

Dave Ramsey

Dave’s entre-leadership: Compassion and reasonable boundaries

Navigating waters as a new business owner can be challenging, especially when trying to discern if an employee is taking advantage of you.

7 days ago

Days says wedding worries should be last on the list of things to worry about...

Dave Ramsey

Dave says: Wedding worries and emergency fund questions

There’s no correlation whatsoever between the size and/or cost of a wedding, and the happiness and success of the marriage.

11 days ago

If you ever find yourself owing back thousands of dollars to the IRS and can't afford it, then usin...

Dave Ramsey

Dave says: It really becomes about the lesser of the two evils

If you ever find yourself owing back thousands of dollars to the IRS and can't afford it, then using a personal loan is the best route.

18 days ago

When old debts come back to haunt you, the best option to take in order to get out of the mess is t...

Dave Ramsey

Dave says: Old debts will always find a way to come back and haunt you

When old debts come back to haunt you, the best option to take in order to get out of the mess is to pay it off.

25 days ago

Living with roommates can quickly become difficult if one person doesn't live up to their financial...

Dave Ramsey

Dave says: It isn’t easy addressing late payments with your roommate

Living with roommates can quickly become difficult if one person doesn't live up to their financial promises. Here are best tips from Dave Ramsey.

1 month ago

Sponsored Articles

...

Collins Comfort Masters

Here’s 1 way to ensure your family is drinking safe water

Water is maybe one of the most important resources in our lives, and especially if you have kids, you want them to have access to safe water.

...

Fiesta Bowl Foundation

The 51st annual Vrbo Fiesta Bowl Parade is excitingly upon us

The 51st annual Vrbo Fiesta Bowl Parade presented by Lerner & Rowe is upon us! The attraction honors Arizona and the history of the game.

...

Collins Comfort Masters

Avoid a potential emergency and get your home’s heating and furnace safety checked

With the weather getting colder throughout the Valley, the best time to make sure your heating is all up to date is now. 

Dave Ramsey says: Invest wisely, don’t overpay for your home