How To Buy A HUD Home | ||
|---|---|---|
Welcome to buying a HUD home.
This is a brief overview of the HUD buying process. There are a few things you need to know up front about buying a HUD home, since the procedures may be different than those used in buying other types of homes. HUD however, has made the procedure as efficient and convenient as possible. Here are some things you should know:
Buying a HUD Home
Anyone can buy a HUD home
HUD homes can be purchased by anyone. While many homes are affordable, this is not a low-income program. Homes may be bought by owner-occupants (who have an initial priority bid period for 30 days), and by investors, who can then bid along with owner occupants.
HUD homes are sold at market value
HUD homes are initially priced for sale at the appraised market value. The buyer may offer any price, but HUD will only agree to offers that provide an acceptable return. Price reductions may take place later if the home does not sell.
HUD homes are sold "As Is"
It is extremely important to understand that HUD homes are sold in "as is" condition. This means that the condition of the home when you see it is what you will be buying. HUD makes no warranties, does not guarantee the condition of any home, and does not verify that it complies with any local code or zoning requirements. You must make any necessary repairs after the purchase. HUD may make, or give you an allowance for, major system or safety repairs only if you are purchasing with an FHA-insured loan. It is very important that you get a Home Inspection by a licensed professional prior to closing on the sale.
Deadlines must be met
When you buy another type of home, you can usually negotiate the contract and other transaction items over an unspecified period of time. When purchasing a HUD home, this is not possible. In order to be fair to all purchasers, HUD has imposed timetables that must be met, or your bid or contract will be cancelled and the home returned to the market. Once your bid is acknowledged as the highest net to HUD, for example, your agent must send in a correct contract within 48 hours or the bid will be cancelled. Generally, for the states of Alaska, Idaho, Oregon, Washington, North Carolina, South Carolina, Virginia and West Virginia, closing occurs within 45 days. HMBI cannot change the HUD deadlines.
Closings are 45 days in Oregon
After your contract has been received correctly, it will be signed by BLB Resoaurce on behalf of HUD and returned to your agent along with a contract acceptance letter. For Oregon this letter will give you up to 45 days to close. Once you are ready to close, you and your agent must schedule the date with the closing agent indicated on the letter, who also receives a copy of your contract. BLB Resources does not set the closing date; it is up to you. If you use the HUD closing agent, HUD pays their fees. You may use your own agent, but then you must pay the fees. If you use your own closing agent, they must work with the HUD agent on some legal items.
HUD will pay some closing and sales commission costs
Generally, HUD will pay up to 3% of your broker commission cost. In addition, HUD will pay up to 3% for standard closing cost items. These items are designated by the buyer and may include discount points, loan fees, title costs, surveys, and other items. HUD will also generally pay any outstanding seller costs such as outstanding tax or utility bills which relate to HUD's ownership.
Call Terry at 517-5960, Cyndy at 729-8381 or email to schedule a showing or request additional information.
