HUD homes are a great opportunity in the Grand Junction CO area. A HUD home is a 1-to-4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim. Almost anyone can purchase a HUD home, including owner occupants and investors. Often times there is a owner occupant bidding period where only purchasers who intend to occupy the property as a principal residence can submit an online bid. The time frame is set by HUD when it is offered for sale. Any properties that don't receive an acceptable offer within that time frame is then opened up to all buyers, including investors. To make an offer you need to place a bid. To place a bid on a HUD home you will need to have HUD authorized bidding agent to submit your offer and terms. Previewing the homes is much like any other property listed for sale, it needs to be scheduled through the appropriate office. Don't make the mistake of going on or in the property unannounced or alone as it is considered trespassing if you do. As the buyer you should also be aware that HUD doesn't usually complete any work or even allow the purchaser to do any work prior to closing and they are sold as is. If you are utilizing an FHA loan and the property doesn't meet FHA appraisal guidelines your lender might allow you to escrow funds to bring it to FHA standards once the property closes. If your bid is accepted your agent will be notified and a real estate packet with the contract and addendum's will be sent for you to review and sign. There is usually a limited window of 48 hours to get this returned otherwise it will go back on the market so time is of the essence. Since HUD homes have been vacant and are offered "as is" we HIGHLY recommend that our clients get a home inspection so you know what will need to be repaired after closing or if there are items that weren't apparent during the property preview. The purchaser has a 15 day window to perform these inspections. If there aren't any inspection items then you may move forward reviewing the title commitment, ordering appraisals, and getting your underwriting for your new loan complete. If there are items that need addressed you will need to contact your agent and let them know what you've found and how that impacts the sale of the property. If you are utilizing FHA financing you might not have to purchase another appraisal since the value that HUD set came from an appraisal that was completed before it was offered for sale. This will depend upon when it was completed and it's effective date however so talk with your agent and lender for the details on the particular property you are under contract on. HUD homes are offered for sale on www.hudhomestore.com and is available to the public. No real estate deal is the same so be sure to get an agent in your corner who will represent your best interests. If you follow these following steps you will have great success in purchasing homes offered by HUD.
1. Contact a HUD Authorized bidding agent
2. Contact a Mortgage Professional
3. Find a property that suites your goals and needs.
4. Place a realistic bid
5. Return the original signed contract and addendum's
6. Get a home inspection
7. Review the title commitment/homeowner association documents
8. Close the transaction
Throughout this whole process you should be also asking a lot of questions as well so that you are confident in the decisions you make. HUD homes are a great way to build sweat equity and/or a real estate portfolio so contact us today and we will walk you through the process in person!
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