The reputation of HUD homes hasn’t been great since the housing bust of 2008. And while this type of housing can be greatly misunderstood, HUD homes and other types of foreclosures can actually be a great deal, especially in areas where inventory is low and prices are high. Many people are wary of purchasing HUD homes because they aren’t fluent in the process. Here we’ll run through a few key considerations for anyone thinking of purchasing this type of home.
The first thing to know about buying a HUD home is that the process isn’t the same as a traditional transaction. Step one is finding an agent who knows the ins and outs of HUD home purchases. This person will be able to guide you and answer questions along the way.
HUD homes can be an awesome value, but they aren’t just being given away. Just as you would with any other property, it’s a good idea to get pre-qualified or pre-approved for a mortgage before you start searching. Window shopping is fine, but you’ll want to make sure you secure financing quickly. You don’t want to know the disappointment of losing the house you want because another buyer had their loan in place and yours hasn’t yet been approved.
When it comes to HUD homes, preference is given to buyers who plan on making the property their primary residence. While these types of properties are appealing to investors looking to fix and flip, or landlords who are looking for their next rental, the first 30 days a HUD home is available it can only be bid on by potential homeowners. This is great because you won’t be competing with investors. The flip side is after those first 30 days it’s open season, so competition is likely to heat up. If you find a HUD home you like, move on it.
Are you interested in checking out HUD homes in the Denver area? Metrowest specializes in these types of transactions and we’d love to help you start the process. Give us a shout today!