- Joe Wise
Maximizing HOA Collective Buying Power
Collective buying power is one of the benefits of owning in a community association. There’s power in numbers, so an association is ideal for leveraging group purchases and discounts. Successfully negotiating the purchase of bulk services and products offers your community residents more for their money than in communities without an association. Here are some ways your HOA Board can maximize its purchasing power.
Homeowner service vendors may offer a discount based on the combined volume within the community. You may already negotiate services for association services that are included in assessments, such as trash removal or pest control. Review each contract for potential volume discounts when it’s time for renewal.
Don’t overlook potential discounts for services paid by individual homeowners such as TV cable, internet services, etc. If a significant number of homeowners prefer or are willing to go with a specific service provider, ask for a discounted price.
Although each homeowner is typically responsible for interior unit maintenance, the association may be able to negotiate a discounted volume price for a group of homeowners. Possible products and services include painting, kitchen appliances, countertop upgrades, etc. While the HOA can’t force all homeowners to participate in interior unit upgrades, there may be enough interested parties to negotiate a group discount.
Many self-managed associations are turning to a property management company for better vendor pricing. Because the management company oversees a variety of services in multiple communities, they have access to preferred rates that you can rarely negotiate on your own. In addition, they know the quality of work that area vendors deliver, saving you research time as well as money.
Small associations may not have the buying power to negotiate discounts. Look for other small local associations that you can team up for vendor services. For example, bargaining power is challenging at best for a four to six unit association. Joining two or three other small associations can triple or quadruple your volume, giving everyone more collective buying power.
As you can see, there are ways to save on products and services that a well-run homeowner or condominium association needs. In addition, negotiating group pricing may put money back in your homeowners’ pockets. Encourage your Board members to ask for discounts and negotiate rates to start reaping the benefits of your collective buying power.
Wise Property Solutions is a property management company serving East Tennessee with offices in Knoxville, TN and the Tri-Cities, TN-VA. Specializing in Condominium Association Management, Home Owners Association Management, HOA Management and Gated Community Association Management.