BUYING A FORECLOSURE
Questions and Answers When Looking to Buy a HUD Foreclosed Property
What is a HUD home?
Answer: When someone with a HUD insured mortgage couldn't meet the payments, the lender forecloses on the home; HUD pays the lender what is owed, and HUD takes ownership of the home. Then they sell it at market value as quickly as possible.
Who can buy a HUD home?
Answer: Anyone! If you have cash or can qualify for a mortgage, you can buy a HUD home.
Are HUD homes meant for people with low incomes?
Answer: HUD homes range in price, but most are affordable for low - and moderate - incomes.
Is it true I can get a HUD home for a dollar?
Answer: No. HUD tries to sell homes at market value - which means the price is set based on the price of similar homes sold in the area. HUD also has an appraisal done on the property before it is placed up for sale.
If a HUD home needs repairs, will HUD make them?
Answer: HUD homes are sold "as is", without warranty. That means that HUD will not pay to correct any problems. But even if a HUD home needs fixing up - and not all of them do - it can be a real bargain! For example, HUD's asking price on the home will reflect the fact that the buyer will have to invest money to make improvements. HUD might offer special incentives such as an allowance to upgrade the property, a moving expense allowance, or a bonus if the sale closes early. And keep in mind that on most sales, the buyer can request HUD to pay all or a portion of the financing and closing costs. We always recommend you have a home professionally inspected before making an offer, so you will know what kind of repairs will be needed before you submit a bid.
How do I buy a HUD home?
Answer: Start by finding a participating Realtor. A Realtor must submit the offer for you. Normally, HUD homes are sold in an "offer period". At the end of the offer period, all offers are opened and, basically, the highest bid is accepted. If the home is not sold in the initial offer period, you can submit another bid. Bids can be submitted any day of the week, even weekends and holidays. They will be opened the next business day. If your bid is acceptable to HUD, your Realtor will be notified, usually within 48 hours.
If my bid is accepted, then what happens?
Answer: A Realtor will help you with the paperwork process. You'll be given a settlement date, normally within 45 days, and told where the transaction will occur.
How can I find out what HUD homes are for sale?
Answer: Call a Realtor, they can supply you with a complete list of all foreclosures in the area that are of interest to you.
How can I get loan to buy a HUD home?
Answer: HUD does not make loans directly. Contact a lender in your area who will walk you through the process and provide you with your loan approval.
Can I buy a HUD or Foreclosure home as an investor?
Answer: Most HUD homes are initially offered on a priority basis to owners who plan on occupying the property. Following the priority period, unsold properties are then available to all buyers, including investors.
Is there anything else I should know about HUD homes?
Answer: We encourage every home buyer to be wise consumers. Be sure to ask a Realtor to advise you of various rules, disclosures, and paperwork necessary to purchase a HUD home.
Candace is an expert in foreclosed properties.
Give her a call today. 316-775-MOVE (6683)