September 2011 – Are there ways you can save on products your HOA purchases? Here are three ideas from a board member and our experts.

1. Do research, even if you have a management company’s help. “I’m the president and board member of the 250–plus home Lakeside at Ansley HOA in Roswell, Ga., and we try to watch our expenses closely,” says David Weaver. “We use an HOA management company so we, hopefully, get the best pricing from vendors based on the management company’s size and involvement in multiple communities.”

“What we’ve found, however, is that nothing beats old–fashioned research,” adds Weaver. “Several times, our board members have found better pricing and products based on their own research and relationships with vendors. Your due diligence can net you a better price on things like replacement windows for the clubhouse, video surveillance components for the security system, and painters. Management companies don’t want to research new vendors every time a community has a new need, so they rely on those they've used in the past. Especially in this economy where vendors are scrambling for business, it’s usually pretty easy to get better pricing and sometimes even better quality by researching multiple providers.”

“While we like the overall performance of our HOA management company, we find it’s worth our time to go the extra mile when pricing out the larger repairs and maintenance to be good stewards of our funds and to maintain the trust of our homeowners.”

2. Work with other HOAs to purchase in bulk. As we mentioned in 10 Ways Your HOA Can Save on Landscaping, you may be able to unite with other local associations to get savings.

“My association saves money by teaming up with other associations to bid on multiple developments,” says Joshua Levitt of the Grove Pointe Condominium Association in Jersey City, N.J. “With Davit Weltz of the Portofino Condominium Association, we formed a group called the Joint Condo Coalition of Jersey City, consisting of some 15 separate associations in our town. We use collective buying power to command the best prices. As a group of 10 or more associations with 60–plus units, we can generally command a discounted price of 10–25 percent off any quote, which includes snow removal as well. We also share recommendations, concerns, and advice with each other.”

3. Hire a manager. Though our two management experts have an interest in recommending hiring a management company, their advice is still solid. If you’re currently self–managed, the savings you get from hiring a management company may outweigh the costs of adding management.

“We have a vast network of vendors we deal with, and because of that, we can get associations a discount,” says Robert White, managing director of KW Property Management & Consulting in Miami, which oversees about 125 associations totaling 30,000–35,000 units. “In self–managed HOAs, that’d be like an area they really couldn’t address. They don’t have any purchasing power and have no idea how they’re being charged for services and products because they have such a small sample of vendors to look at.”

Duane McPherson, president of the western region and Dallas⁄Ft. Worth divisions of RealManage, an association management firm that oversees properties in Arizona, California, Colorado, Florida, Louisiana, Nevada, and Texas, agrees. “When associations are looking for management companies, they’re looking for that cooperative buying power,” he says. “When they’re self-managed, it’s hard for them to make purchases on their own when a management company could get 20–30 percent less. When I talk to potential association clients, pretty much across the board, the question they’ll ask is: Can you get a discount for vendors or products? The answer is yes. Ninety–nine percent of the time, we can get them price discounts.”

HOA Leader

Matt Humphrey is president of the Alameda, California-based, from which this article was adapted.

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