How to Purchase a Government Tax Foreclosure Property
If you're looking for a good deal on a house for your family, business or real estate investment portfolio, a government tax foreclosure property might be just what you are looking for. Because the government is looking to unload the properties in a timely fashion, the prices can be low, but many government tax foreclosure properties need extensive work, so be prepared to invest additional monies into fixing things up.
- Difficulty:
- Moderate
Instructions
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Purchasing a Government Tax Foreclosure Property
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1
Go to the U.S. Department of Housing and Urban Development Web site for the list of homes for sale. See "Resources" below for a direct link.
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2
Browse the listing of HUD houses that are up for purchase. You can choose from a variety of listings---there are some from various government departments. These are houses that may have been seized or foreclosed upon for noncompliance with the law or nonpayment of taxes. If you are a real estate investor looking to buy multifamily buildings, scroll down and click that link.
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3
Find out about about financing options. You will need to be pre-approved for financing (or have cash) before purchasing a government tax foreclosure property.
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4
Once you find a house or houses that you are interested in purchasing, find a realtor who deals with HUD properties or call the realtor who is listing the home to make an appointment to see the property.
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5
Make an offer on the house. You may have to go through a bidding war on the tax foreclosure property depending on which government agency is listing it.
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6
When and if your bid is accepted, you will be able to have the home inspected, but you are solely responsible for correcting them. If everything checks out and you still want the home, you will go through a closing process after completing your mortgage financing package (your realtor and financing company will handle most of the work from here). The house deed is transferred to your name at closing.
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1
Tips & Warnings
When you buy a HUD listing, the government will usually pay your real estate broker fees as long as they are listed in the contract for sale. You may be eligible for an FHA loan, which is insured by the Federal Housing Administration and usually has favorable terms for new homeowners. See links below for more information.
