HUD homes for sale are foreclosed properties but buying them is different from buying regular foreclosed properties. With HUD, homes for sale to purchase them you have to submit a bid and then go through a certain process before you can call the home your own. HUD is short for Department of Housing and Urban Development and they have initiative to help provide potential homeowners with assistance for housing. When you a HUD home for sale it was one that was bought with an FHA loan that has been foreclosed on. FHA stands for The Federal Housing Administration. The resale of these homes are different from that of others homes that have been foreclosed on.
• Because it is a foreclosed home, you will get the house as is and means no repair, no extra financing, and no changes. You will get it in the condition that the previous owners left it in.
• Examine the property thoroughly because if it is going to cost a lot for the repairs to be made it will be a wasteful deal
• When the price is being decided HUD will also consider the repair value so the cost will be less than what its market value is
• Check the home for sale for any cracks, problems with wiring or plumbing, leaking, etc.
• Your real estate agent will send a sealed bid to HUD when the property is out in the market and the offer period if open.
• The bids will be opened after the offer period closes
• The real estate agent will keep watching the website often to see if your bid has been accepted.
• If the home does not sell after the offer period, a bid can be submitted daily and it is opened the next day. The price will also be reduced
• Once a bid is accepted, the real estate agent contacts you and the deal moves forward.
One important thing to remember is that if you decide to cancel your bid it has to be done before the offer period closes.
• Once your bid is accepted you will sign the deal
• You will receive a settlement date, which will be approximately a couple of months instead of the forty to sixty days from the signing of the contract to close the deal and become homeowners
• If you decide not to buy the home for sale you will lose your offer money
• If it is inserted into the contract, HUD will pay approximately six percent commissions to your real estate agent.
HUD will not finance the home so you will have to secure your own financing.