First time home buyers and investors are attracted to foreclosures and HUD Homes because the price seems like such a good deal. If you are a CASH buyer HUD Homes are a good deal if the return on your investment can be recouped with a “flip”. As a Realtor in Lake Charles LA I find myself answering the same questions about HUD Homes over and over.
- Explaining to buyers that bids are submitted online through the HUD website.
2. Explaining to buyers that the property is Sold “AS IS” meaning its unlikely the Seller(Bank) will make any repairs. Sometimes in the disclosures the Seller will indicate a dollar amount $ held in Escrow for repairs, so in essence they are disclosing there are issues that will need to be repaired and/or the working order of the utilities etc.
3. Buyers will get an inspection discovery period however they are responsible for turning the utilities on/off.
4. If repairs are evident it will be difficult to pass an appraisal necessary for the loan.
5. Investors usually have to wait to submit a bid after 10 or more days the property has been listed.
6. Once a buyer’s bid is accepted online the Realtor is sent the Addendum and Contract package that must be completed by a Buyer.
7. The listing agent just lists the property in the MLS on behalf of HUD. Any other agent may show the property however you must be registered with the HUDhomestore.com and have a NAID# to submit a bid on behalf of a Buyer.
Today is only Monday and I have already had two buyer inquiries for a Lake Charles HUD property listed for sale. One buyer already submitted a bid and was calling me for advice. Unfortunately if a Buyer is already Under Contract with another Realtor I cannot offer advice on the transaction. This particular Buyer had concerns with the repairs and wanted advice on how to proceed and if her Realtor was telling her the truth. I had to explain to the Buyer that I could not answer her that she would have to consult with the Realtor who was representing her, its a conflict of interest once she is Under Contract.