HUD Home Buying Made Easier
Look around your local bookstore and you’ll find little information (or much misinformation) about HUD homes. “HUD” stands for the U.S. Department of Housing and Urban Development, produced in 1965. Mention it to realtors and they will not only try to hide their feelings about it, they will try to steer you away from buying one.
A Housing and Urban Development home is defined as a one- to four-family home that had an FHA mortgage but went into foreclosure. The program relieves the bank of its financial burden, gets the house, and resells it as a HUD home. They are bought in “as-is” condition, which makes most possible buyers think that they’re decrepit old money pits not worth a second to peek briefly. With the help of an inspector, you may find that what seem like initially fatal flaws may need less work than you think to get fixed. Many people choose not to live in their HUD home, but to fix it up and resell (“flip”) it. If you’re willing to invest the time and a little additional money, this can pay off big-time if done right.
HUD homes can be found by searching online, and that is where the bidding is done in addition. One reason realtors don’t like these homes and the buying course of action is that you can be outbid without being able to make a counter-offer. You’ll need to check back on the site to see if the bid has been accepted. Many people think that when they bid on a house and lose, it’s over, but if you check the right box on your bidding form, you nevertheless have a chance. If the winning bid falls by, the house may go right back on the market. If you’ve filled your form out correctly and you are the second highest bidder, you’re in.
Knowing this can help you get a home at 30-50% below market value, already more in scarce situations. Just as with buying any other kind of home, it’s best to hire a specialized to help. Search realtors in your area to find someone who specializes in HUD homes. If you can’t find one, and you go to a realtor, expect to be met with resistance. If you arm yourself with as much knowledge as you can before going in, you nevertheless may be able to get the house you want at the right price and with the right kind of financing for your situation.