| You may have gone by a house and saw the orange | | | | "Fair Market Value." It has been appraised by a FHA |
| stickers on the front door or windows. You looked at | | | | appraiser. My experience has been that the list price |
| the sign stating this was a HUD homes for sale. It | | | | of a HUD foreclosed home is within 20% of market |
| also said to contact a local real estate agent. | | | | value either too low or too high. Again that is another |
| You looked around the property and thought this is | | | | reason you need an experienced real estate agent in |
| what you have been looking for as a home for | | | | HUD foreclosed homes. The agent should do a |
| yourself or as an investment. The problem is you | | | | Competitive Market Analysis of the property. An |
| have not brought a HUD home for sale or you really | | | | experienced agent also will be able to determine the |
| don't know what they are. | | | | lowest bid that HUD will take for the property. |
| To begin with HUD homes for sale are HUD | | | | 3. Inspection. You should have an independent |
| foreclosed homes. They are homes that have been | | | | inspection done on the property. Most HUD homes |
| financed by an FHA loan and the loan has gone into | | | | sale will have what HUD calls a "Property Condition |
| foreclosure. The HUD foreclosed home has been | | | | Report." The Property Condition report is similar to an |
| assigned to a Marketing and Management Contractor | | | | inspection and it gives you a pretty good idea of the |
| to service and market the property. | | | | HUD foreclosed home. You still need to have an |
| There are a lot of interest in HUD homes for sale by | | | | independent inspection done. |
| both home buyers and investors. They also are lot of | | | | 4. Sold "As-Is" Condition. All HUD homes for sale are |
| mistakes made in buying HUD foreclosed homes. I am | | | | sold in "AS-IS" condition and HUD means AS-IS. They |
| going to list 5 common mistakes made buying HUD | | | | will not do any repairs! So when you make a bid on a |
| homes for sale. | | | | HUD home for sale, you should adjust your bid |
| 1. Finding a Real Estate Agent. I am listing this | | | | amount to reflect needed repairs. |
| mistake in buying a HUD foreclosed home first | | | | 5. Closing Costs. HUD will pay up to 5% of the |
| because I think it is the most common and the most | | | | purchase price for certain Buyers' closing costs. The |
| costly mistake. You probably think all you have to do | | | | 5% must be included in the initial bid and the key |
| is called any real estate agent or one that you have | | | | word is "certain" closing costs, not all. Again, I know I |
| used in the past. It is my opinion that 95% of real | | | | am repeating myself, but an experienced real estate |
| estate agents have not sold a HUD home for sale or | | | | agent in HUD foreclosed homes would know which |
| worst yet; most real estate agents don't even know | | | | closing costs HUD will pay. For example, your winning |
| what one is. Buying a HUD home for sale is not | | | | bid on a HUD home for sale was $100,000 and you |
| anything like buying a home from a home owner. You | | | | asked HUD to pay 5%($5,000) of your closing costs. |
| need to search for a real estate agent that is | | | | HUD will only pay certain closing costs and those |
| experienced in HUD homes for sale. | | | | closing costs only came to $2,000. You would LOSE |
| 2. Paying too much for the HUD Foreclosed Home. | | | | $3,000($5,000-$2,000). |
| The HUD home for sale is listed at what HUD calls | | | | |