Things To Know When Buying A HUD Home In Salt Lake

September 21st, 2007 Categories: Buying

Things To Know When Buying A HUD Home In Salt Lake

1. What is a HUD Home?

Actually a great question. A HUD Home is a home that had a Loan that was insured by the Federal Housing Authority (FHA) and has foreclosed. It is a bank repo but had a certain type of loan. So pretty much owned by the tax payers.

2. I am an investor can I buy a HUD Home?

During the first 10 days a property is listed it is available for Owner Occupant Purchasers only. All bids placed by Owner Occupants that are submitted from Day 1 through Day 10 are opened on the 11th day and are considered as though they were received simultaneously. If there are no acceptable owner-occupant bids on day 11, then bidding becomes available to all purchasers on a daily basis.

3. I am a First Time Buyer (FTB), do I get any special deals on a HUD Home?

The answer is no because you are a FTB, however there are sometimes deals that are offered in an “Officer/Teacher Next Door ” program. That will be discussed in a future post

4. How do you buy a HUD Home?

All HUD Homes that are available for sale are listed on our www.MCBREO.com and on the MLS. If a property has an accepted bid or is under contract it is removed from the web listings. Only HUD-registered real estate agents can place bids on behalf of their buyers. For a bid to be awarded it must meet the threshold for the property (lowest acceptable amount) and have the highest net to HUD (not purchase price). A sales package should be completed at the time of bid submission. Once a bid is accepted the purchaser and real estate agent have only 48 hours to submit the Sales Contract Package to MCB. If the sales package is not received within the deadline then the bid acceptance may be cancelled. If there are no acceptable bids placed on a property then it remains on the market until an acceptable bid is received.

5. Will HUD Pay closing cost?

HUD will allow some of the closing cost to be paid. However know that some cost are not allowed to be paid by HUD, you do not get a rebate. So make sure your Loan Officer and Realtor have HUD Experience.

6. If we are bidding online do we have to Earnest Money?

Yes. An earnest money deposit is required for all HUD property purchases with the exception of some HUD Special Programs. The amount required for the earnest money deposit depends on the purchase price of the property:

Sales price up to $49,999 – earnest money deposit = $500Sales price $50,000 and up – earnest money deposit = $1,000

7. Can I buy a HUD Home with an FHA loan?

Yes, but please know that purchase amount is over the list price, that amount must be paid in cash. FHA will not loan any amount over their list price.

8. How does HUD determine their List Price?

Fair Market Value is determined by a licensed FHA appraiser. Copies of the FHA appraisal are available to the lender by request after a property is under contract. If a property is exposed to the market without any acceptable offers then a reduction of the listed price may occur.

9. Can you bid lower than the asking price on a HUD Home?

Yes you can. However typically HUD Homes that are in decent shape and depending on the area usually go for more than list price. The list price is usually aggressive enough to cause multiple offers and therefore drive up the price to full market value. This is also market driven. (because FHA will not loan an amount more than the asking price, I believe this is HUD’s way of not getting the house back).

10. How do you find HUD Homes?

You can go to the site that has the Utah HUD Homes it is www.MCBREO.com look for the Utah link and click in.

11. How Can I arrange to look at a HUD Home?

Owner Occupant and Investor purchasers MUST be accompanied by a broker or agent when viewing any HUD home listed for sale. Buyers may not enter a house without their broker/agent for any reason prior to closing. Brokers and/or agents must accompany any individual performing services such as home inspections, appraisals, or certifications. Brokers and agents may only use their keys for their own legitimate use. Keys are not permitted to be lent to any other individuals associated with any sales transactions.

12. Can I get a home inspection?

All HUD Properties are sold in their “AS-IS” condition, HUD does not make any repairs to the property. As such, it is extremely important that the purchaser performs a home inspection with the utilities activated. The home inspection will provide the most current condition of the property and inform you of any repairs that may be necessary. The gas, water, and electricity should be activated at the time of the home inspection. To activate the utilities a permission form can be found under HUD Forms on our website, this should be completed by the purchaser and agent then faxed in for approval. Utilities may be activated for a period of 72 hours so the home inspector should be scheduled to complete the inspection during that timeframe.

13. Does HUD make any Repairs to the property?

No. All HUD properties are sold in their “AS-IS” condition. There are no representations or warranties, expressed or implied, on any HUD property. HUD does not guarantee the condition of any property, FHA-insurable or not, nor whether it meets local codes or zoning requirements. Purchasers are advised that there may be code and/or zoning violations on these properties and that it is the responsibility of the purchaser to identify these violations. Buyers are very strongly encouraged to have homes inspected by a qualified home inspection company to satisfy themselves as to the condition of the property at the time of sale.

14. What does HUD stand for?

The United States Department of Housing and Urban Development, it is a Cabinet department of the United States government. Although its beginning… more about HUD

This entry was posted on Friday, September 21st, 2007 at 3:08 pm and is filed under Buying. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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