Looking for a good deal on a home? You might want to consider purchasing a HUD property. These properties are sold as-is with all faults. HUD will not do any repairs and they will not allow buyer to do any repairs prior to closing. If your lender is going to require certain repairs to be done prior to closing, you will need to check with them to see if they will allow you to escrow the funds for the repairs.
You will need to have a licensed, HUD registered real estate agent submit your bid to HUD. You will need to provide your social security number to your agent. You will need a preappproval letter from your bank if you are financing or a proof of funds letter if you are paying cash.
HUD will allow the buyer to do inspections. However, the buyer has to get permission from HUD’s field asset management company to have utilities activated and pay them for dewinterization and rewinterization of the property. Once permission is given to have the utilities activated, buyer has to have them turned on in buyer’s name and can only have them on for 72 hours. Again, HUD will not do any repairs or allow any repairs to be done prior to closing.
The buyer will pay for all title charges and may select the title company to be used; however, the title company must be registered with HUD.
Once your offer is accepted, time is of the essence. Your agent will have to get the paperwork delivered the HUD’s management company and the listing agent within 2 days. You will need a cashier’s check for the earnest money ($500 for contracts under $50,000 or $1000 for contracts over $50,000).
After the closing, you will be required to re-key the property.
By: Barb Bryant
Relocation Specialist, E-Pro, SFR