How To Buy A HUD Home
HUD homes are homes acquired by the U.S. Department of Housing and Urban Development (HUD). If a foreclosed home was purchased with a loan insured by the Federal Housing Administration (FHA), the lender files a claim for the balance due on the mortgage. The FHA pays the claim, then transfers ownership of the property to HUD, which sells the home. These properties are often referred to as foreclosure or bank owned homes.
HUD homes are priced at fair market value for their location based on appraisal. Teachers and police officers are given a 50 percent discount on HUD homes. Investors often purchase HUD homes to fix up themselves and sell at a profit. HUD homes are sold as-is – HUD is not responsible for repairs and improvements. These homes can be a great value and although they are sold as-is you can still have an inspection period written in your contract to allow you to get informed about any repairs or issues with the home.
HUD foreclosures are sold using a bidding process. There's an Offer Period, during which sealed bids are accepted from agents. So expect a longer response or acceptance times than purchase from a private seller. Also your agent will ask some additional personal information from you in order to submit your bid/ offer. Unlike conventional home sales, there is no negotiating on price between buyer and seller and often you are going up against multiple offers. So make it a good one!!! Your agent should have comparable home sales to help you make an informed decision, Even though it may be over the list price.
Before submitting a bid, buyers must be pre-approved for financing.
If you are interested in this kind of purchase or have questions about the unique process please call me, Misty Perrone directly at 636-464-4221 and I would be happy to answer any of your questions or concerns.