Tuesday, September 22, 2015
Anyone may search for HUD properties on the HUDhomestore.com website, and set up a listing alert to be notified when new properties matching your buying criteria are listed. However, only HUD brokers, like myself, may submit offers on this site.
HUD homes are those single family, townhomes, condos, and multiplexes up to 4 units that have been foreclosed. The lender has then turned the properties over to HUD in exchange for the insurance value. Hence, HUD homes are often sold at below-market prices that may save the purchaser thousands of dollars, with down payments as low as 3.5%.
HUD is focused on stabilizing the housing market by encouraging homeownership among owner-occupants. Investors have an opportunity to bid on these homes after they have been advertised for owner-occupants for 15 days. These homes are sold in "as-is" condition, and the buyer has the opportunity to conduct an inspection after their offer has been accepted.
The whole offer, bidding, and contracting process is handled electronically on the HUD homestore website. The amount of the earnest money ($500 or $1000), and the length of time for closing are all set by HUD. There is no negotiating over repairs or reductions in price. The buyer must be listed on the contract, and while it is possible to add purchasers, HUD does not allow for contract assignments.
Investors typically have the opportunity to bid on properties only after a 15-day review period offered to primary residence buyers first. Investors may do an inspection at their own cost, and may back out of the contract after that. But they will lose their $1000 earnest money.
HUD also offers a very interesting Good Neighbor program that allows police officers, teachers, fire fighters, and EMTs to purchase HUD homes in "revitalization areas" where they work for 50% of list price. These revitalization areas are identified on the HUD homestore site.
If you are interested in looking at HUD homes currently offered for sale in the Seattle area, please message me at HomeLandInvestment@gmail.com and let me know the particulars.