HUD government foreclosed homes are properties that are acquired by HUD as a result of a borrower defaulting on their FHA mortgage loan. FHA pays the lender off, and HUD takes the foreclosed houses back and resells them at discounted prices. To find out about quality HUD foreclosures in Richmond, you should check HUD’s website and also talk to a local Richmond, Virginia Realtor to find out what government foreclosures are available.
Things to Be Aware of When Buying HUD Foreclosures
Here are a few things you should know first about buying HUD foreclosures:
- You need to make your offer with a local Realtor.
- You can buy some HUD homes with as little as a $100 down payment.
- Buyers must obtain their own financing.
- You may qualify for an FHA loan. You have to buy FHA mortgage insurance if you get an FHA loan.
- Properties are sold to buyers who plan on occupying the foreclosed homes as their primary residences. If there are no bids from these buyers, then investors may submit a bid on a HUD foreclosure property.
- You can inspect the home.
- You can obtain title insurance.
- Government foreclosures are sold in an “as is’ condition. HUD does not make repairs.
- Homes are sold for full price. The homes are listed at discounted prices below market values though so you are getting a home with built in equity.
- HUD may pay your closing costs up to 3% of the total purchase price of the home.
- HUD will pay real estate commissions as long as it is written in the contract.
Even though many HUD foreclosure listings are in good condition, it is always advisable to obtain a property inspection to make sure you know what you are getting. HUD does not make any repairs so it’s up to the buyer to do their due diligence. Some homes just need cosmetic repairs like painting, new flooring and appliances. However, if you find a HUD home, and it needs major system repairs, you will have to decide whether the price you are paying for the home warrants the amount of repair costs you have to put into the home. If you are handy and can do the work yourself, then it may be a good idea to still go ahead and purchase the home.
Since government foreclosures are so affordable, they sell quickly. So if you find a quality HUD foreclosed home, act right away before someone else buys it. There are other good opportunities to invest in bank REO’s, short sales and foreclosed houses at property auctions in Richmond, VA and surrounding areas right now so buyers/investors should take advantage of these opportunities while they last. You will find good deals on Richmond resale properties as well. Motivated sellers have priced their homes competitive with foreclosures and short sales and some are offering buyer incentives such as seller financing. Now is the perfect time to find affordable Richmond housing in all price ranges and neighborhoods.