Buying HUD Foreclosed Homes

Buying a HUD foreclosed home can be a great way to purchase a home in an area you are interested in at a great value.  The key to search for these homes is finding an agent who deals with HUD homes on a regular basis and has the knowledge to deal with the HUD process, paper work, and HUD guidelines. HUD uses different contracts that many agents are not accustom to and could potentially avoid these homes when they are searching for their client's potential home.

As I have been listing and selling HUD homes for the past few years, here are a few tips:

1. Find an agent who can handle the HUD process for you. Make sure they have sold these homes in the past. If they don't sound to enthusiastic about it, find a qualified agent.
2. Ask the agent to speak to a loan officer they know and get approved for a loan.  You will need to provide an approval letter showing you qualify to purchase the home. If you're paying cash for the home, you will need to show proof you have enough funds to buy the home.
3. You can go to hudhomestore.com and view the homes in your area. Your real estate agent can also send them to you through the local MLS system.
4. Once you find the home you would like to make an offer on, your agent can submit your offer online and go over the contract and any addendums that apply for the home.

  A real advantage with HUD homes is the insured homes qualify for FHA203b financing. Many of the insured homes will have escrows set up to fix the items needed in order for the home to qualify for FHA financing. These escrows are $5000 or lower and are added to your loan. They are not a credit to you. Once you purchase the home, the buyer will need to have a qualified contractor repair the items. Your loan company who holds the escrows will pay the contractor using these funds.

The process is a little more detailed than what is stated above, but this should help you with the beginning process to purchase a HUD home. If you would like to find out more about the HUD foreclosures in the Greater St. Louis area, feel free to contact me anytime at 314-714-7249.

Andy Colberg
Remax Best Choice
Over 20 years experience