Readers Sound Off on Dues Management

My mailbox offers an interesting view of what's important to local consumers and to the folks who earn a living selling services to them. Often those priorities aren't the same.

Judging from the recent crop of mail, a lot of people are edgy about how their homeowners association dues are handled. Melanie Higgins of Woodbridge moved into a community with a homeowners association about 2 1/2 years ago and volunteered to serve on the board. "What an eye opener," she wrote. "This HOA was using a well-known, full-service management company to whom we paid a lot of money. Our operating budget was in the red, our reserve accounts were too low, and after spending an inordinate amount of time going through the very abstruse (and I am an MBA) monthly financials, I finally figured out that this company was charging us a lot more than we thought."

Higgins complained that two independent auditors asked her to sign documents that placed responsibility for financial errors or improper use of funds with the board, not with the management company. "Bottom line, HOAs are targets of opportunity for a lot of these management companies, and an independent audit is no help. Homeowners have to watch their own money and accounts. Of course it is a real challenge to get someone in the community not only willing but able to do the task. I do think the biggest help would be to have a licensing board or some oversight committee to which HOAs could report suspected wrongdoing or mismanagement."

Harold Looney of Sterling wrote: "I am the president of a small homeowners association with 77 homeowners and annual dues of $220 per household. We try not to accumulate any funds because HOAs are not in the business of saving money beyond the emergency funds. I agree wholeheartedly that HOAs are ripe to be ripped off by the so-called professional managers. We fired our management team after they insisted upon maintaining our checkbook and writing our checks. The states of Virginia and Maryland, and the District, must get involved."

Bonner Davis of Remington wrote: "One thing missed in your article, perhaps by government, too, is the ripe atmosphere for embezzlement or fraud by HOAs that choose not to use a management company and go solo. Think of your neighbors handling all those funds because they feel they can do the job cheaper and better than a management company. Who audits them on a regular basis? If management companies can embezzle HOAs, so too can neighbor against neighbor."

Most of the mail in response to the column about Sawbuckrealty.com came from real estate agents fuming about yet another competitor looking for a cut of their commissions. A few consumers complained about slow-loading or balky pages, but the site appeared to be back up to speed when I checked last week. As buyers go through transactions using this new Web site, I would love to hear reports on whether it lives up to its promises.

Here are some excerpts from a long message sent by Kelly Williams, an agent with Long & Foster Real Estate in the District: "Agents are currently inundated with offers of referrals from a million companies like this, who, in effect are parasitic. What is the service they are providing? A search engine? A promise of discounts? How many experienced top-producing agents are going to willingly give up 30 percent of their commission because someone clicked on a Web site? . . . More than likely, these types of entrepreneurial sites will actually drive up the costs for consumers because all other service prices will eventually be adjusted to compensate yet another guy who thinks he should have a slice of the pie. . . . If your mouse-clicking readers want more power, you should tell them there is no better power than having experience and skill on their team."

And a comment about the best location for a laundry room. Pam Swope-Bland and Ira Bland of Ashburn passed along a suggestion they found useful for keeping the peace near sleeping areas:

"When our house was being built, our very wise buyers' real estate agent noted that we would want to insulate our laundry area to prevent any noise transmission. We were dismayed to find our builder did not offer any option to insulate the walls around the laundry. So we bought a couple of rolls of fiberglass insulation and a staple gun, and for a very small price insulated all the laundry room walls and the area under the floor before the drywall was put up. We do have a horizontal-axis washer, and it spins at very high speeds. Thanks to a couple of hours of labor and small cost, we hear very little laundry noise. One could also accomplish the same improvement by using blown-in insulation after the drywall is put up."

Finally, judging from the comments I have been getting in online chats and in the mailbox, a lot of people are focusing on price cuts as the most important (perhaps the only) way to market a home. Here's a sample, from Brad Chandler of Springfield, in response to my statement last week that if an agent tells you that a low price and the multiple-listing service will be enough to move your home this spring, you should call in someone who is prepared to earn his commission.

"The truth is that there are many things that contribute to selling a home, but the three most important are listing in the MLS, so the world knows, pricing the home below others, and making sure the home is in better condition than others in the neighborhood."

I disagree that you sellers should automatically underprice other homes on the market. It takes more work than that to price a home correctly. Your home may, indeed, be more valuable than the competition. Price it competitively, yes. Get it in the best possible condition, absolutely. But sellers don't have to volunteer for a bath.

Consider this: Chandler is chief executive of one of those companies that buys homes fast and easy, usually from distressed sellers. Of course he says price cutting is the way to go.

As I said, sometimes the priorities of the pros and those of the consumers aren't the same. Keep the mail coming, folks, and I'll share your insights here every so often.

E-mail Elizabeth Razzi atrazzie@washpost.com.