HUD Executed Real Estate Contract: Definition
HUD stands for the U.S. Department of Housing and Urban Development, a department of the federal government that is in charge of promoting sound real estate practices and encouraging effective growth in the residential real estate market. HUD regulations have a widespread impact on housing practices throughout the U.S., and many regulations can affect real estate contracts directly, depending on current rules and how the contracts are created. HUD standardization has made it much easier for real estate companies, lenders and other parties to close on homes quickly and effectively.
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Real Estate Contract
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A real estate contract is an agreement made between a buyer and seller when a house is about to be sold. The contract lists all involved parties --- usually including the lender and escrow company --- and is legally enforceable, which means the parties must honor the agreement or face penalties, including court action. The contract lists the price that the buyer will pay for the home along with any provisions for a particular down payment or seller concessions.
HUD Housing and Regulation
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If a contract is HUD-based, it usually means that it uses a standardized HUD form to record all necessary information, a common tool for escrow and title companies. It does not mean that HUD itself is in charge of the transaction, although involvement can vary. If a buyer uses an Federal Housing Administration loan to purchase a home, HUD documentation is required, and HUD actually oversees the foreclosure and sale process if the buyer is unable to pay off the mortgage at a later date.
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Executed Contract
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To say that a contract is executed simply means it has been recorded legally and honored by all parties. In this case, an executed real estate contract is one that has been used to facilitate a closing that has already occurred. Funds have been exchanged, the deed has been recorded, the title has been conveyed and all other steps have occurred. Since the contract has been fulfilled, it does not carry the same legal weight as before it was executed -- there is no longer any need.
Contract Variations
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Not all HUD executed real estate contracts are the same. Despite the standardization of the forms involved, the contracts themselves vary widely due to additions and contigencies. A contigency is a clause in the contract, a provision that must be met in order for the contract to be fulfilled. Buyers may use a contigency to require the seller to pay part of the closing costs, or pay for the cost of a new structural appliance, which can lead to many differences between individual deals.
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