HUD Home Experts Want to Provide YOU With Materals to Help YOUR Contract Get Accepted!
If you are an Agent and have questions please refer to the links below!
What is a HUD Home?
If a loan insured by the Federal Housing Administration (FHA) goes into default, the lender must take steps to collect on the loan. This may result in the lender taking possession of the collateral Real Estate. If this occurs, the lender may submit a claim against the FHA insurance fund and convey ownership of the property to the United States Department of Housing and Urban Development (HUD). HUD in turn sells the property at market value as quickly as possible. MLM III is a Marketing and Management contractor for HUD owned residential properties, 1 to 4 units; we maintain and sell these properties in accordance with HUD guidelines.
How are HUD Homes Sold?
HUD homes are listed on the MLS and on the internet. Brokers registered with HUD and their agents may place bids electronically on these properties on behalf of a purchaser. The bid with the highest net to HUD is selected as the provisional winner subject to receipt of all required documents.
Who can buy a HUD Home?
Any buyer that can secure a loan to purchase real estate, or can pay cash, is eligible to purchase a HUD home. Purchasers must use a broker or agent who is registered with HUD to submit a bid on a property. Purchasers must also have a pre-qualification letter from a lender or proof of cash funds in the amount of, or greater than, the property they are purchasing.
HUD’s “AS-IS” Policy
Even though HUD Homes are Sold AS-IS, Buyers can rest at ease as the homes have been appraised, inspected and checked for termites. HUD makes no representations or warranties concerning the condition of the property, including but not limited to mechanical systems, dry basement, foundation, structural, or compliance with code, zoning or building requirements and will make no repairs to the property. Regardless of whether the property is being financed with an FHA insured mortgage, HUD does not guarantee or warrant that the property is free of visible or hidden defects, termite damage, lead base paint, or any other condition that may render the property uninhabitable or otherwise un-useable. The purchaser is responsible for taking such actions as it believes necessary to satisfy itself that the property is in a condition acceptable to it, of laws, regulations and ordinances affecting the property and agrees to accept the property in the condition at the time of contract acceptance. Purchasers are encouraged to have a home inspection performed to identify any possible defects.
The HUD Bidding Process: The Steps that I follow to ensure your bid is a winning bid and its placed within the time frame allowable.
Accuracy of Bid Submission
The purchaser information entered on the bid must be accurate. If an erroneous
social security number, federal identification number, purchaser, or company name is used in lieu of the actual SSN/FIN, purchaser, or company name your bid may be rendered invalid. The information entered on your bid cannot be changed after it has been provisionally accepted. Submission of false information will result in the cancellation of the provisional bid acceptance and the property will be placed back on the market for competitive bidding or awarded to a back up bidder.
Multiple Owner Occupant Bids
There is a huge misconception about Owner Occupant Bidding. Some "Realtors" will tell you its okay to place multiple Bids for an Owner Occupant, This is False. Owner occupants can only place one bid at a time. Owner Occupant purchasers may only have one accepted offer at a time. If for some reason the provisional bid or contract for an Owner Occupant must be cancelled, you will not be able to submit another bid on behalf of that owner occupant until your cancellation request has been processed. Upon completion of processing, a cancellation letter will be faxed stating the disposition of the earnest money deposit. Submission of bids during this transition period will only cause delay in your client’s ability to place a new bid.