When considering buying a HUD house, one of the first things you need to do is fully understand exactly what a HUD house actually is. A HUD house is typically a house that consists of anywhere from one to four units that has been foreclosed on through an FHA insured loan. If you can purchase the house in cash or qualify for a loan for the value of the house (within certain limits) then chances are that you actually qualify to buy the HUD house. During the initial offering period those buying a HUD house in order to occupy the house receive preference. If the house has not sold during that period of time, the house will be offered for sale to those who would use the property as an investment property as well.
One important thing to remember when buying a HUD house is that the process is quite different from the purchase of traditional home loans. In fact, this is quite a unique process as far as home purchases go. HUD houses are typically listed online. The listings are handled through an outside agency and not HUD itself. If you wish to place a bid on one of these properties it is important that you keep in mind that HUD offers no guarantees about the condition of these properties and will make no improvements. In other words, have a thorough inspection performed before placing a bid or buying a HUD house and make your bid accordingly.
The road to buying a HUD home is a rather tricky road indeed. It is required that you go through a Realtor if your plans involve purchasing a home that is owned by HUD. This is not a bad thing however as a Realtor can help you navigate the muddy waters of home ownership with far less effort than it would have taken you to find your way on your own. Realtors can also help you learn about the local schools, important information about the neighborhood and community, help you find honest inspectors and appraisers as well as providing assistance with the more confusing paperwork aspect involved in buying a HUD home.
Some people greatly prefer the process of buying a HUD home as there is no back and forth haggling over the price and the properties typically close rather quickly in 30-60 days. I can attest to how great that is considering our house took 6 months to finally close. A quick close is particularly helpful to those trying to get into their new homes during a certain time period (such as before a new school year starts for their children) or certain sporting seasons. It is also good for those who try to plan their moves during certain weather. We were planning our move for early spring and wound up moving during the hottest month of the year-that was a lesson in frustration.
In addition to the quick close I also mentioned the no haggling aspect. The thing to remember is that HUD homes are generally sold to the highest qualifying bidder. This means that your chances of getting a better price are greatly improved if the home has been on the market for an extended length of time. When buying a HUD home take in all the facts, discuss them with your Realtor, rely on his or her advice, and make your bid accordingly. If you follow these steps you should very soon be in a HUD home of your very own with a little money to spare that can go a long way towards making it the home of your dreams.