How to Bid on HUD Properties
A HUD (Housing and Urban Development) home is a real estate property that the government lists for bidding. These homes are available because of foreclosures on government-backed loans. Home shoppers and investors find the deals available among HUD homes very attractive, though people who want to buy the home to live in are preferred in the bidding process. Almost anyone who has the money or credit-worthiness to buy a home can bid and buy a HUD property.
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Instructions
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Browse the HUD listings at Hud.gov (see Resources). Take down pertinent information about the properties you're interested in viewing, including the area, address, property case ID, age, square footage and any issues disclosed.
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Call a Realtor in your area who specializes in HUD homes. Most real estate agencies are registered with the HUD office. The Realtor will likely ask to see your mortgage pre-approval from a lender and earnest money (the amount varies, but commonly under $2,000) to prove that you are serious about purchasing the property.
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Visit the properties you're interested in to view the premises (the full address is listed on the HUD website). You may or may not be able to gain entry to the home---it depends on the situation. If access is available, your Realtor will make the arrangements.
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Place a bid (also called an offer) for the home you're interested in buying. Your Realtor will submit it on your behalf. If your offer is accepted by HUD, your Realtor will let you know and start drawing up the contract for the property sale on your behalf. You can schedule a home inspection after HUD accepts your offer.
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Tips & Warnings
HUD pays your Realtor's commission, so you don't have to worry about adding that to your closing costs.
Take note of the last appraisal date and listing date when you're browsing HUD properties. Make sure that the appraisal is fairly recent (within the past few months). The list date will tell you how long the home has been sitting out on the market---a fairly old list date compared to other entries may indicate a significant issue with the property.
Keep in mind that HUD sales are "as-is" with no warranties from HUD. Once you buy the home, you alone have to deal with any issues that come with it.
References
Resources
- Photo Credit home image by dinostock from Fotolia.com
