There are many misconceptions about HUD homes, and more specifically, buying a HUD home. What type of property is this? It’s actually simpler than you may think, and these types of homes can often be a great deal. HUD homes have been acquired by the government due to foreclosure on a FHA-insured mortgage. In order to try and get their money back on a foreclosure, HUD homes are available to the public to buy. If you’re considering purchasing a HUD property, check out the helpful tips below before you start the search.
- Be prepare to move fast
Keep in mind that HUD homes are highly-sought after by investors looking to fix and flip or rent out a property. While you may be competing with investors with deep pockets, you can rest a little easier knowing that legally, HUD cannot accept bids on homes from real estate investors within the first 30 days that a home has hit the market. After that first month though, your competition will become greater, so if you find something you like, be prepared to submit an offer.
- Be realistic about what you can afford
When it comes to financing, be realistic about your price range. The importance of buying a home with feasible mortgage payments and interest rates is your ultimate goal here. While there’s nothing wrong with window-shopping, make sure you secure financing sooner than later. In a worst-case scenario, buyers find the house of their dreams, only to lose it to another buyer because their loan hasn’t yet been approved.
- Find a pro
HUD homes aren’t all that different than traditional home purchases, but they’re not exactly the same. Finding a real estate professional who’s experienced with these types of transactions is key – they’ll know the right questions to ask and the types of offers to submit on HUD homes in your area.
The bottom line is to let go of any negative ideas you might have about the HUD program. With due diligence and proactive research, HUD homes can be a great deal. Ready to start your search?