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Country Club Resale

Resale in country clubs can pose a future challenge that you should be prepared for.  It can take longer to sell homes in country clubs than in communities without mandatory membership dues.

 

Challenges to Country Club Resale

Be sure to do your research before committing to purchasing in a country club with mandatory membership.  Remember that if you take on an equity membership, you will be responsible for your membership dues until your vacancy is filled.  Look at current statistics of homes currently listed in the community, consider barriers to entry for potential buyers, and see how other clubs in the area measure up.

 

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Current Neighborhood Market Conditions

The first step is to look at current market conditions.  Your Realtor can provide you with a Comparative Market Analysis (CMA) for the home you’re considering purchasing.  A CMA will help you determine a fair dollar amount for your offer, but it will also give you insight into the overall health of the neighborhood market.  Look at the average days on the market for the current listings in the community.  If homes listed at market value have been sitting on the market for a year or more, you can probably expect challenges with resale.  Dig a little deeper and ask your agent to calculate the absorption rate in the community to get a general idea of how long it takes to sell in the community under current market conditions.  Of course, markets change so the housing market statistics today are highly likely to be different when you decide to sell.  However, if sellers are having trouble selling now, chances are the challenges will increase over time as the property ages and the club’s amenities experience wear and tear over the years.

Barriers to Entry that Impact Country Club Resale

Next, look into the approval process for new buyers/members and calculate the membership initiation fees.  Review the process for joining closely to determine if the approval process is stringent.  There are additional barriers to selling in a country club that requires potential buyers to be sponsored by a current resident.  This can severely limit the pool of qualified buyers.  High non-refundable application fees, initiation dues, and upcoming special assessments can also be a deterrent for potential buyers.

Assess the Competition

Lastly, visit other country clubs in the area to assess the future competition when the time comes to sell.  See how the community measures up in terms of:

  • Amenities offered
  • Age of the community
  • Private vs semi-private
  • Membership dues, initiation & application fees
  • Current and upcoming special assessments
  • Monthly HOA dues and what they cover
  • Luxury home features
  • Location – proximity to shopping, entertainment, dining, transportation, and the beach
  • School ratings

 

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