HUD Properties Information

HUD PROPERTIES AND WHAT YOU SHOULD KNOW!

HUD properties are FHA loans that have been foreclosure on. You may have seen houses that have sat empty for a year or more before being released for sale to the public. There are many factors that go into why it takes so long.

HUD properties are AS-IS The bank (seller) WILL NOT fix anything on these properties. There are certain properties that can only be purchased with Cash or Conventional financing (due to the repairs required to bring the property up to code.) Some properties can be purchased with a new FHA loan, but require funds to be placed in an escrow account at closing to insure the repairs be made. It is very important that you have an inspector check out the home prior to closing or be knowledgeable in the rehabbing of homes to know what to expect to bring the house up to code. Choose an agent that is trained in the construction of a home to be able to help advise you on what things may be of a concern to the property. It is important that this be done in a timely manner, so that if you find anything major wrong you have an agent knowledgeable in the process to release you from the contract without loss of deposits.

HUD properties are PURCHASED ON A PRIVATE BIDDING SYSTEM. There is a limited amount of contributions that they will pay on your behalf. And of those contributions, only certain ones are allowed to be covered by the seller.

Time is of the Essence

There are many time sensitive matters when purchasing a HUD property. You must be able and ready to move quickly when buying a HUD home.

1. Properties are released for sale on a certain day of the week.

2. You have a limited amount of time to view these houses to determine if you would like to bid on them. You must have a licensed real estate agent gain access to the property. It is best to visit these homes during the day light hours because the electric has been turned off on these homes.

3. Bids are accepted by a certain date stated by HUD (where everyone’s bid goes in the same time.)

4. There is a different bid time for owner occupied or bidding as an investor.

5. You must be PRE-APPROVED with a lender that is familiar with the HUD process.

6. Real estate agents should provide you comparable sales in the neighborhood so you can place the best possible bid for your best chance to purchase the house.
7 .There is always a DEPOSIT REQUIRED on all HUD homes. If you fail to follow through with the contract the deposit is held by HUD. There are exceptions to this rule and the responsibility of the agent to know these to protect your deposits.

8. Once your BID IS ACCEPTED, the contract and all the addendums must be signed in a timely manner and the deposit is then collected. The agent is responsible to get these forms to the proper authorities in California 48 hours from acceptance to avoid cancellation of the contract.

9. INSPECTIONS must be completed by a certain date. The utilities must be coordinated to be turned on for the inspection.

10. CLOSING is required by a certain date, by a certain Title Company.

11. If you fall into a certain category such as a teacher, firefighter, Police man EMT you may be eligible to purchase the home at a discounted price if the house is in a designated area of the city.

12. You must OCCUPY the home for a designated amount of time before you can purchase another HUD home.