Interested in buying a house thatís in foreclosure? Wondering how the government bid process works for homes it is selling?
We asked the federal government to tell us about how to buy a HUD (Housing and Urban Development) foreclosed home.
We know: How to Bid on a Foreclosed House
Whatís does a government foreclosure mean?
Generally, this means that someone canít meet their house payments and their mortgage is insured by the federal government (HUD or FHA). When the person defaults on the loan, the lender (usually a bank) forecloses on the home. At that time, the federal government pays the lender what is owed and HUD now owns the home.
HUD wants to sell the home as quickly as possible at market value.
Who can buy one of these HUD homes?
Anyone who can qualify for a mortgage or has enough cash to buy the house. These houses range in price, but most are affordable to people with low and moderate incomes.
How much does a HUD home cost?
HUD homes usually sell for the market value, so check out comparable homes in the neighborhood.
Does HUD sell fixer-uppers?
Yes, in fact, HUD homes are sold Ďas isí and without a warranty. The 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 for closing the sale early. On most sales, the buyer can request HUD to pay all or a portion of the financing and closing costs.
How do I bid on a HUD home?
A real estate agent must submit your bid for you. Normally, HUD Homes are sold in an "Offer Period." At the end, all offers are opened and, basically, the highest reasonable bid is accepted. If the home isn't sold in the initial offer period, you can submit a bid until the home is sold.
What happens if I get win the bid?
You'll be given a settlement date, normally within 30-60 days, by which time you need to arrange financing and close the sale, or forfeit your earnest money deposit, or pay for an extension of your sales contract.
Will HUD pay the real estate agentís commission?
The selling agent's commission will be paid by HUD, only if you make this a condition of your offer. The listing agent's commission is always paid by HUD. HUD will pay a total sales commission of up to 6%.
Where do I find out about HUD houses for sale?
To find out about HUD homes for sale, look in the newspaper, contact a real estate agent, or contact HUD directly.