As you passed a neighborhood, did you notice the orange stickers on the front door or windows of any house? This is the mark which states that this is a HUD home and is for sale. Maybe you are looking for a property to invest in and the house you liked is a HUD home for sale and you are not able to understand what that means.
To understand it better, HUD homes for sale are HUD foreclosed homes. They are homes that have been financed by a government loan and the home owners for whatever reason have not been able to pay back the loan they had taken and so the property has come for foreclosure.
There are a number of people including investors and also people who are looking for their dream home who are interested in purchasing HUD homes. It is not very simple to buy one and numerous people make mistakes when they purchase foreclosed HUD homes.
Some points to remember are listed below:
It is very important to find the right Real Estate Agent who is experienced in selling HUD homes; otherwise it can become a very costly mistake. Most of us think that calling any real estate agent or one you know will be able to help you a good deal but it may not be true. As a matter of fact there are some real estate agents who have not even heard of HUD foreclosure properties.
The entire HUD homes for sale are listed at ‘Fair Market Value’ and have been evaluated by the FHA appraiser. You have to be sure that what you pay for the home is what you need to pay. Be sure to understand the real estate value of the area before you make any deal. An experienced real estate agent will be able to tell you the exact value of the property.
No deal should be finalized before seeing and inspecting the house thoroughly. A number of HUD foreclosure homes will have a ‘Property Condition Report.’ This is very much like a check and will give you an idea on the condition of the HUD foreclosed home. But it is better you go and see for yourself.
Normally all HUD homes are sold off in the condition which they are in. No repairs have been done to the property, so it is important to bid after considering the amount which you will have to spend on repair as some of the homes may be in a very poor condition.
HUD pays up to 5 percent of the acquiring price for the Buyers’ closing costs. You have to include the 5% in the initial bid and remember the key word here is “certain” closing costs, not all the cost.
You can make a handsome profit when you buy a HUD foreclosed homes as long as you remember the important points and don’t end up making any expensive mistake. If you do your homework and research well you will surely be able to make a great deal.