I was very excited for these new home buyers, they lucked out with a great value and a home in good shape. I guess you could say this house was a diamond in the rough–but the home buyers got a pumpkin instead!
Buyers and Investors in general are fascinated with the HUD home site and “foreclosure homes” listed there. I have never had much luck with buyers getting HUD homes to the closing table–that is until today!
Typically a HUD home or foreclosure has some type of damage or repairs needed and the “seller” may or may not have repair escrow set up. Therefore, when showing home buyers HUD foreclosures, if items are missing like appliances, or flooring this can be a red flag and obstacle to overcome.
This HUD home had a very nice kitchen but only the microwave remains, all the other appliances are gone! An experienced Realtor knows some of the issues to look for that could be a barrier to the buyer getting financing
Most home buyers these days obtain some of financing in order to purchase a home. Many times all a home buyer has saved is a small 3.5% down payment and the option is FHA financing. Sometimes a home buyer may qualify for USDA financing 100% or even VA. All three of these loans are government loans and the financing guidelines for appraisal are pretty strict.
Luckily the buyer submitting a bid on this Sulphur LA home was obtaining conventional financing and the “stove” issue did not come up. I was nervous about it and had confirmed with a lender that a “cooking source” was required. In case the stove issue came up with underwriting, we were prepared for it, and had a stove and a receipt for the stove ready to produce to the underwriters but didn’t have to go that route! There was no mention of anything missing and no photographs like this one above, therefore no questions asked.
Also lucky for this home buyer, the house was in good shape, it was apparent that the previous homeowners had done recent remodeling the floors and carpet were new and the paint had recently been touched up. This HUD house only only had minor plumbing repairs needed which is typical when water is turned off and the pipe/drain seals rot.
Buyers conducted home inspection and had utilities turned on and off in their name according to HUD rules. In this instance, 1701 Azalea in Sulphur turned out to be a great deal!
There will be a lot of paperwork involved with pursuing a HUD contract and getting it all filled out correctly and returned with a HUD acceptance. Buyers should also be prepared to go above the list price, it is very rare that a HUD home sells for exactly what it is listed for and quite common for multiple bids to be received. Everyone wants a good deal, so HUD homes in good conidtion or those that are “steals” will attract popularity!
There are many reasons why a HUD home may not be the best bet for a buyer. Investors usually have to wait until HUD opens the bid up for investors which can be 10-14 days after the home has been listed.
1701 Azalea had 12 bids but the buyers I represented WON and closed in 17 days that is just a WOW in today’s real estate industry!!!