Buyers with bargains in mind might gravitate to homes offered by the Department of Housing and Urban Development (HUD). You may have heard about homes offered to buyers by certain government loan programs. HUD homes are foreclosed homes that used financing programs from the Federal Housing Administration (FHA) and the United States Department of Agriculture (USDA). The process is slightly different from buying a home in a traditional manner so read on to find out more.
How Can You Find a HUD Home?
You will need to look at the HUD website as they are not always listed on the multiple listing service (MLS) sites. Special HUD real estate agents can also lead you in the right direction. If you already have an agent working to find you a home, ask them if they also deal in HUD homes. Since HUD homes are different, only certain agents can help you with that type of home. If you locate a home and end up closing on it, HUD will pay the commission to the agent.
Get Ready for Condition Issues
Like all foreclosed homes, some HUD homes are not in the best of shape. Former owners may have left the home in poor condition and that is why it's so vital that you get the home inspected before you place a bid on the home. With a traditional home sale, you might not have the home inspected until the owner accepts your offer.
How To Buy a HUD Home
It's vital to work through a real estate agent when buying this type of home. Once you have found a home you want to purchase, you submit a bid for it through the agent rather than making an offer. Bids are accepted for a limited period of time and each bid requires a deposit to secure your bid. The deposit is based on your bid price as a percentage. If you end up not being the high bidder, your deposit comes back to you. If you are the highest bidder, the deposit is used as a (partial) down payment on the home. As far as how much to bid on the home, let your real estate agent guide you toward a price that is in line with the value of the home and what others may bid. You should also know, however, that the bids are sealed, or private, and only you and your agent know what your bid is.
You Won the Auction
When it comes to HUD homes, it's important to act fast and get your financing in order as soon as possible. There are time limits to abide by. To learn more about finding and bidding on a HUD home, speak to a real estate agent who understands the process and can help you get the home you want at a bargain price. They can provide more information regarding buying a house.