Hud Homes

I have been to look at many hud homes in my area and they have all had a price in the window. Is that price the apraisal value or is it payoff or possibly just some sort of starting price to work with while making offers. Now if I am correct then a hud home is one which was purchased through an fha loan then forclosed on. How am i supposed to know what payoff is so that I can make them an offer then sell it for market value. Any information i can get will be greatly appreciated



Howdy Arkangel:

Yes Hud owned homes were loans insured by FHA. They insured the top 25% of the loan and usually pay the investor for the property and become the owner instead of paying just the top part as it must net them more money overall. This is just what I have heard over the years and is not based on actuall evidence. I have bought several Hud and Va foreclosures and bid on several that I did not get and had several under contract that I could not close on but not recent enough to know all the current details.

A Realtor that works Hud deals will be able to help you decide what to offer and if you can even bid on a certain property. Some general rules are that the property is first offered to owner occupants and is open for bid starting at the asking price by a certain date. If no bids are forthcoming it will be put out to all bidders. The highest net to Hud will be accepted if it meets a certain % of the asking price at that point. If no bids still then the asking price will eventually be lowered.

This is just a general idea. Your Realtor will be able to explain the dates and % to Hud rules. You must use a Realtor that is approved by Hud.

Thanks Ted,

You have been very helpful in these last few days.