HUD Bids

Foreclosures, Short Sales, Tax Foreclosures
1

Buying a HUD home.

  1. Is a title search/insurance really necessary? I mean…I’m buying it from the government–don’t they make sure all their properties have clear title before they put it up for auction?

  2. We won our bid on the 6th and will be closing on the 25th. Is that usually how long it takes to close HUD homes?

  3. Can someone please explain between NET AMOUNT and NET OFFER? If NET OFFER was 85,000 and NET AMOUNT was 83,000 — which amount did we originally bid (83K or 85k?) I thought 83k was our bid … but I can’t figure out where they are getting the extra 3k?

If you have any other advice, tips or warnings about HUD’s please share. Very interested in people who have ‘been there and done that.’ Thanks!

2

  1. YES! Absolutely…you are buying from the government that foreclosed the property on homeowner(s)…you have no idea what kind of liens, encumbrance, rights of way, etc. may or may not exist on the property. In my opinion, title insurance is a must…others will argue that but I buy it…

  2. You normally have to close within 45 days on a HUD property.

  3. I have only heard/used the term “Net to HUD”…

Keith

3

So you have a 19 day window from the point you were notified as the winning bidder to the point you close? Usually, HUD drags their feet with the paperwork, and you end up closing 45 days out. At least, this has been my experience. Of course, if you are paying all cash, this may be different.

Here are a couple of points to consider …

HUD allows you to inspect the property, but just remember, YOU will have to pay for ALL the costs involved for the inspection, including reacitivating the utilities, if applicable.

HUD uses their own keys/locks, and normally remove the deadbolt from outside doors. Therefore, your very first order of business is to put new locks on the outside doors.

4

Good point about the “HUD Key” thing, Stephen! They just left the old raggedy locks and deadbolts on the property that we bought and you KNOW there are hundreds of HUD keys around the community!

Keith

5

net to HUD is your bid MINUS any closing costs you asked for and Realtor’s commission.

Realtors can put in whatever commission they want, from 1% up. The normal is 3% for the buyer’s Realtor. The listing Realtor usually gets less.

You can have up to the time on your contract to close. You can wait to the last day if you like. If you need more time, you have to pay for it.

Jan

6

Thanks for all the great advice. We close tomorrow. Will change the locks tomorrow as well. And if all goes as its suppose to, should have the utilities on by the end of the day.

Already starting to search for another.

-Chrissy