HUD Homes

HUD Homes

Making an Offer on a HUD Home

Offers must be made through a HUD registered broker
If you want to make an offer on a HUD home, you must bid through a HUD-registered broker. I am registered with HUD, and have worked with many clients to successfully bid and obtain HUD properties. I will work with you from the beginning to the closing table.
How to find a HUD home
Call or e-mail me today. I will obtain a list from the MLS, which contains detailed information on the home that matches your specifications. I will then e-mail the homes to you for your review.
Offers must be submitted through an electronic bidding process
All offers must be submitted through an electronic bidding process, this is where I come in, I have the training and the expertise to do this right the first time.. Most offers are made via computer through the Internet. An option to bid via telephone is also available for brokers who do not have computers. The electronic bids are stored in the computer system and, at the appropriate time, calculations are automatically performed to determine the apparent highest net offer to HUD.
The apparent highest bid is acknowledged by the M&M Contractor to me, (that is if I am the one who is working with you) notifying me to send in a correct, signed sales contract within 48 hours. If the contract is not received within 48 hours or is incorrect, the home will be returned to the market or acknowledged to the next highest bidder. All acknowledged bids are subject to cancellation for prior sale, electronic error, and other conditions (see Disclaimers). An acknowledged bid does not constitute a sale; only a correct contract that is counter signed by the M&M Contractor and returned to us as your agent allows you to proceed to closing.
Initial Listing Period
The initial listing period, which is generally the first public listing for HUD homes, is 10 days. During this time, priority is given to owner-occupants who are buying the home as their primary residence. On the first business day after this period, these bids are reviewed to determine the highest acceptable offer to HUD.
Bids received at different times during the day will be considered received simultaneously, and the highest acceptable net bid will be acknowledged on the date opened. If the property remains unsold after ten days, it is made available to investors as well, and bids are reviewed on a daily basis. (Investor bids may be placed at any time but are not reviewed until the 11th day, if the property is still listed.)

An owner-occupant purchaser is defined as a purchaser who intends to use the property as his or her principal residence; a State, governmental entity, tribe, or agency thereof; or a private nonprofit organization. Governmental entities include those with general governmental powers (e.g., a city or county), as well as those with limited or special powers (e.g., public housing agencies).
Subsequent Listing Period
When a property still remains unsold after the 30 day initial listing period, the M&M Contractor will re-analyze the case as soon as possible. The price may be reduced, and for five days after the price reduction, all bids are considered simultaneous, with owner-occupants given priority. After the five-day initial reduced price bidding period, then bids are reviewed daily and the acceptable bid that offers the highest net value to HUD (regardless of occupancy) is acknowledged.
Contract must be submitted within 48 hours
If your bid is acknowledged, as your broker, I must submit a correct HUD Sales Contract, along with other required forms and Addendum's signed by you, to the M&M Contractor Regional office within 48 hours. You will be required to submit proof of financing commitment or cash to close, along with other items. You should be working with me to put the required items in place before you bid on a home, so that you are ready when the time comes.

Buying a HUD Home is Different than Buying Other Types of Homes

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:

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. Home may be bought by owner-occupants (who have a priority bid period for 10 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 canceled and the home returned to the market. Once your bid is acknowledged as the highest net to HUD, for example, I as your agent must send in a correct contract within 48 hours or the bid will be canceled. Generally, closing must take place within 45-60 days.
Mortgage Companies
Before you offer a bid on any HUD home you must be prepared and have your Ducks in a row. First of all you need to find a good lender(I know a few) who will finance HUD's, also if the home is a fix it upper or on acreage or a mobile home your lender needs to know this too, please ask the lender several time are they sure they finance HUD's? Do you do Mobile Homes? Do you finance Acreage? I have been several weeks into the process before the lender realizes they do not finance HUD's, Mobiles or Acreage, then you are on the hook to HUD, you have signed a legal binding contract with the Federal Government, so unless you have a rich uncle who just died you need to dig up the money (no pun intended). We will also have to have a letter from your Mortgage Company stating you have been approved and your credit has been run and checked out.
Earnest Money
HUD requires you to have Earnest money in the form of a Cashiers Check made out to HUD, If your bid is below $50,000 you will need a Cashiers Check for $500, if your bid is more than $50,000 you will need a check for $1,000. If your bid is not accepted your Cashiers Check will be returned to you uncashed, this will be returned to you within 24 hours after notification of non acceptance.
Closing Cost
Once again you will have to know from your Mortgage Company how much your closing cost will be, this is called a Good Faith Estimate, we can add up to this amount to the bid to finance your closing cost but please be aware this increases your bid amount to finance if you add it on top or decreases your bid to HUD and your chances of being awarded the bid if you want to roll it into your bid.

Making an Offer on a HUD Home

Buying a HUD Home is Different than Buying Other Types of Homes