Susan Zongker Wilkinson ERA Real Estate
8604 Cliff Cameron Drive
Charlotte, NC 28269 Mobile: 704.579.1655 Fax: 704.353.7845 Email Susan

HOW TO BUY A HUD HOME


I would welcome an opportunity to be your source for HUD or other (REO) real estate owned properties in the Charlotte area.  With over 16 years of experience, I can be an asset to you.

Here are some FAQ's about the process and a link to HUD listings:
HUD homes are available to anyone who has cash, or can obtain financing to purchase a home.  HUD homes can only be purchased with the assistance of a licensed real estate professional.
 
Click on the following link to search for available HUD property listings for sale :  www.hudhomestore.com
What is a HUD home?   Answer:  When someone with a HUD insured mortgage can't meet the payments, the lender foreclosures on the home. HUD pays the lender what is owned, and HUD takes ownership of the home and puts it up for sale.
 
Who can buy a HUD home?   Answer:  Anyone.  If you have the cash or can qualify for a mortgage, you can buy a HUD home.  HUD employees and relative are eligible but must receive written approval.   Teachers and police officers can purchase specific homes in "revitalization" areas at discounts.  Certain criteria does apply though.
 

What does it cost to buy a HUD home?   Answer:  If you are buying the property as an owner occupant, usually at least 3.5% of the purchase price for your downpayment with an FHA loan, plus your loan closing costs.  You can request HUD to contribute up to 3% toward closing expenses. (Example:  $135,000 purchase price, $4,725.00 down pmt, $6,075.00 closing costs (ask HUD to pay 3% toward the closing costs or $4,050.00).  HUD has also had a $100.00 downpayment special program in effect using an FHA loan.  In this instance the downpayment would be $100.00 instead of $4,725.00. **  Not all lenders will do this program.

If the HUD home needs repairs, will HUD make them?   Answer:  HUD homes are sold "as is" without warranty. That means HUD will not pay to correct problems.  Even if a home needs fixing up, and not all of them do, it can be a real bargain.  For example:  HUD's asking price of a home will reflect the fact that a buyer may need to make some  improvements.  Sometimes you will see a specific amount noted for repairs (called repair escrow).  With an FHA loan, HUD allows the buyer to finance certain repairs into the loan (a type of 203K streamline loan).  It could be as simple as some appliances or lighting, or even some exterior repair work that's needed for an acceptable FHA appraisal.  You'll find a Property Inspection Report under the Addendum Tab for their homes on the site.

How do I buy a HUD home?   Answer:  Start by finding a HUD registered agent.  (Oh, Susan can help you with that!)  We must submit your bid (on-line) for you.  Normally HUD homes are sold in an Offer Period.  At the end of the offer period, all offers (for owner occupants only) are opened and the highest reasonable bid is accepted. Owner occupants usually have the first 30 days to bid.   If no one wins the bid, then the bidding is opened up to everyone (including investors) each day until the home is sold.  If your bid is accepted, your Realtor will be notified within 48 hours. 

If my bid is accepted, then what happens?   Answer:  Your real estate agent will help you through the paperwork process.  The clock starts ticking.  There will be an ernest money deposit (certified funds) needed from you and a specific HUD contract signed by you.  You'll be given a settlement (closing) date, usually within 45 days by which time you'll need to have the home inspected if you so choose, get your loan approved and any other things.  Utilities get put in your name for this.  Home may need to be dewinterized and rewinterized again.  Cost of $150.00.   When you buy a HUD home, your buyer agent's commission is paid for by HUD at closing, unless a special program is involved (i.e. Good Neighbor Next Door).

How can I find out which HUD homes are for sale?   Answer:  The HUD site at hudhomestore.com is updated every day.  See the link above.  They are also uploaded on the MLS for Realtors, so I can keep you updated also.   If you see a property that interests you, just send me an email or give me a call and we can discuss further and make an appointment to view it.

How can I get a loan to buy a HUD home?  Answer:  HUD does not make loans directly.  Most mortgage lenders/banks can finance HUD home purchases.  Some lenders do have different paremeters so you have to ask.   I have some lenders who have experience doing HUD purchases I can share with you.  FHA loans are looked at favorably by HUD when an owner occupant is buying a HUD home.  If you are buying as a rental investment, you will need to get conventional loan or pay cash. 

Can I buy a HUD home as an investment?   Answer:  Most HUD homes are initially offered on a priority basis to owner occupant purchasers (people who are buying as their primary residences).  Following the priority, unsold properties are available to all buyers, including investors.  This is on day 31!  Bear in mind, if you are an investor, you will very likely loose a deposit if you back out of a contract.

Is there anything else I should know about HUD homes?   Answer:  There are always things to learn, but as your buyer's agent I'll be your guide and take good care of you.

Regards,

Susan