HUD properties are foreclosed properties where the owner had a FHA loan. The properties are always sold “as is” and cannot have any repairs made to them prior to the transfer of ownership. Most of these properties will require repairs to them, therefore the buyer needs to be prepared to make repairs after they close on the house. In order to purchase a property, a buyer will need to consult with a licensed Realtor who has a NAID # (they are registered with HUD to sell their properties). The buyer must also be preapproved for a loan or have proof of funds.
All HUD properties are listed at www.Hudhomestore.com which is the website that you will want to visit when purchasing a HUD property. The house must be on this website in order for an offer to be placed. Sometimes properties are still listed on the local MLS but are not available on the HUD website. Only properties listed on this website are eligible for sale.
If the property shows lottery then it is not on the market for the general public, an exclusive listing is for owner occupants only (must live in the property for a minimum of 12 months, and finally extended listing meaning anyone including investors can bid on the property. There are different bidding periods for owner occupants and investors depending upon the condition of the property. If the property has extensive damage and is considered uninsurable for a FHA loan (this does not mean you can get home owners insurance) then owner occupants have 5 days to bid on the property before it is opened for both owner occupants and investors. If the property will go FHA with or without escrows then owner occupants have 30 days to bid before it is opened for both owner occupants and investors. The first 10 days of the bid period on insurable properties is a sealed bid period meaning HUD will not select a bid until the property has been on the market for 10 days.
If your bid is accepted you will need to have your Realtor® submit your signed bid to the asset manager no later than 2 business days after acceptance. The forms need to be in blue ink. The earnest money in cashier check made payable to HUD is included in the packet. I suggest you mail it overnight so it can be tracked. The asset manager will review the signed contract and sign off on it or request revisions if needed. Time periods are extremely important or your bid may be cancelled.
You will have the opportunity to inspect the property, if you choose. You may obtain title insurance. I strongly recommend this. On the day of closing you will need to wire your funds to the title company . No keys are given at the closing. You will need to change the locks. Congrats you are a home owner.
If you need for help in buying a HUD property be sure to visit my website: http://www.sandiwalker.com