HUD Homes

Investors Can Buy HUD Homes – Learn the Criteria

HUD government homes or repo homes where the mortgage was insured by FHA and then foreclosed upon may be bought as owner-occupied homes or by investors.  The process for an investor is different and all investors must abide by HUD’s guidelines.

Every foreclosed home for sale by HUD is first placed on the market for ten days where only buyers who intend to occupy the home are allowed to bid.  This is called the Exclusive Listing period and investors are not allowed to bid during the first 10 calendar days after the HUD home listing is posted.  Listings are posted every Friday morning and from that time, for the next ten calendar days, as an investor, you may not submit an offer to HUD.

Once the 10 calendar day exclusive listing period has passed, HUD opens the bid to the general public, which includes bids by investors. This general public bid period is where as an investor you can make an offer though a real estate broker who is licensed to sell HUD homes and these bids are reviewed and the highest acceptable bid will be selected.

HUD homes are priced and sold at market value or what homes in the area are selling for through an appraisal process.  If you, as an investor, are interested in a hudhome, you should indicate to your real estate agent to keep an eye on any given HUD home you are looking at for an investment to ensure you will have a chance to bid once the exclusive listing period for owner-occupied bids is closed.

If you are successful in making a bid on a HUD home as an investor, you must follow the guidelines HUD requires.  Within 48 hours after your bid acceptance, your real estate broker must submit to HUD a signed sales contract and then you will have 45 days to close on your HUD home investment.

Down payments are different for investor purchased HUD homes.  As an investor, if you win a bid on a one-unit hudhome, a 25% minimum down payment is required.  If you win the bid on two to four units, a 15% minimum down payment is required.

Earnest money is also required by HUD when buying a hudhome, even for investors.  HUD requires $1,000 earnest money for offers more than $50,000 but earnest money never exceeds $2,000.  $500 is required for home priced and sold at $50,000 or less and if you are purchasing a HUD vacant lot, 50% of the listing price will be your earnest money requirement.

As an investor, your earnest money may be returned by HUD under certain conditions.  For uninsured sales, 100% of the earnest money is forfeited by the investor for failure to close, no matter what the reason.  It is important to note here that even as an investor you only have 45 days to close so ask your real estate agent what is required by you to ensure you close on time and do not forfeit your earnest money.

If your sale is an insured sale, 50% of your earnest money will be forfeited for failure to close or if the investor is considered by HUD to be an unacceptable buyer.  100% of your investor earnest money will be forfeited to HUD if you fail to close on your HUD investment property for any reason within the 45-day period set by HUD.

All other criteria for buying hudhomes, whether you are an investor or buy the HUD home as an owner-occupied residence remain the same.  For example, once your bid is accepted as an investor, your real estate broker must submit your signed sales contract within 48 hours.  You and your real estate agent will then work with a HUD closing agent and submit the required documents to close within HUD’s 45 day time period. Failure to close in HUD’s timeframe, may cause you to lose your earnest money.

It is recommended that you use a HUD closing agent.  If you choose your own closing agent, HUD will not pay their fees.  HUD will, however, pay the fees of a HUD approved closing agent.

If you find you can’t meet the 45-day deadline to close on a HUD home, your real estate agent should contact the HUD closing agent two weeks prior to the 45-day deadline.  Extension fees are required if HUD accepts your Extension Request Form as submitted by your real estate agent.  All investors must pay these extension fees in certified funds, cashier’s check, or money order.  Fees are set by HUD on the following basis.  If the investment hudhome you are buying is $25,000 or less, the fee is $150.  If the investment property is $25,001 to $50,000, your extension fees will be set at $225.  Finally, if the investment home you are buying is $50,000 or over, you will be required to pay $375.  Again, all fees must be paid to HUD in certified funds as described above.

Buying a HUD foreclosure home as an investment can be an easy process if you make sure the real estate agent you are using is knowledgeable and qualified to sell hudhomes.  Seek out real estate brokers who are licensed to sell HUD properties and are aware of the timelines, bidding process, and deadlines for investors to ensure you win the bid.  Your real estate agent should also be versed in earnest money and down payments required by investors as they vary from owner-occupied dollars.  Finally, if you find you need to file an extension for closing as an investor on a hudhome, make sure your real estate agent understand the fees involved and how they are to be paid.

If you think a foreclosure home by HUD is an investment you want to make, remember that all HUD homes are sold on an “as-is” basis and do require a home inspection by a licensed home inspection contractor.  Make sure you understand that if any needed repairs or zoning changes are required that you will need to take care of this on your own and HUD makes no warranties or helps with zoning changes on your behalf as an investor.

Investing in a HUD home is a good idea if you wish to rent out the HUD homes you buy or revitalize them and resell them at a higher profit.  HUD urges you to make sure your real estate broker is extremely educated in handling your investment purchase.

HUD Homes and Foreclosed Homes in Minnesota Represent Undervalued Opportunities

If you are in the market for a new home, whether it is for you to move into or to fix up to turn for a profit, it is important that you are taking advantage of all of the opportunities out there. Because a lot of the economy is in such bad shape, there are a lot of MN home foreclosures. While this may be a bad thing for those who lost their homes, this is an excellent opportunity for you and one that you should get ready to cash in on. There are so many homes out there just waiting for you to pick up and take advantage of.

But where do you start? With so many undervalued opportunities out there, it can be a little confusing to figure out where the best place for you to begin would be. There are so many homes in Minnesota that have been foreclosed on and so many Minnesota HUD homes available that you will start to feel like a kid in a candy store. You can select a home for yourself, one to fix up and put up for sale, or maybe a few to fix up and turn into rental properties.

You have heard all of the claims that you can get a house for just a few thousand dollars but is that really true? The answer is yes and there are an incredible number of houses out there literally sitting there for sale for a few thousand. These houses are just screaming for an investor to come along and pick them up. If you are most interested in obtaining undervalued HUD homes, it is best that you work with a real estate agent who will have access to the online information that you need in order to obtain such a property. The best place to get the information that you need for such investments is www.best-assests.com.

You will want to make sure that whether you are looking at a list of foreclosures or a list of HUD homes, that you are prepared to get all of the information needed to make a wise decision. Make sure that you are not getting stuck with extra liens on a property that you are buying. In order to make sure that you are checking all of the information you need to have and then double checking it, you will need to make sure that you have an experience real estate agent on your side.

But you need to make sure that you are going with an experienced real estate agent. The wrong agent, or one that is fairly new, may not have the time put in and experience needed in order to lead you down the right path. The Minnesota HUD homes and the MN home foreclosures are something that you will need to make a jump on right away. If you do not you can believe without a doubt that someone else will and you will have lost your chance on that house. With these types of listings, you really have to make sure that you are acting fast or you will certainly miss out.

Do not be afraid to ask real estate agents questions about their career and the experience that they have gained over the years they have been working. Asking what kind of experience they have with foreclosures and HUD homes is acceptable as these are transactions that will vary slightly from that of a regular home for sale the normal route. Your interest in their knowledge will also show them that you are serious and that you mean business.

While you have your real estate searching for your unvalued investment property opportunities, it is a good idea to make sure that you are doing a little searching of your own. This is the best way to make sure that you are on top of your game and that you are covering as much ground as possible. With so many listings being added daily due to the stressed out economy, there is no reason why there is not enough room online to for everyone to get into the searching action. As you will soon be able to tell there are at least one or two new properties being added to a lot of the lists out there that are lists of foreclosures.

Make sure that you are getting in on the real estate action now while all of the prices are so low. In due time you will see the real estate prices jump back up and that is when you will want to sell the property in order to get the biggest return on your investment. That could be a matter of a year or maybe a couple years. In the end all that matters is that you will be able to get your money back plus additional money which means that you really did make out good on your investment.