Foreclosure in Sacramento>Question Details

Jen M, Other/Just Looking in 95816

How do you arrange for an inspection before you bid on a HUD home?

Asked by Jen M, 95816 Wed Feb 3, 2010

Help the community by answering this question:


In case you are not aware, HUD homes have a Property Condition Report displayed for each of their homes. The report covers electrical, plumbing, roofing, structure etc...

Good Luck!

Michelle Thompson
Lyon El Dorado Hills
2 votes Thank Flag Link Wed Feb 3, 2010
What a difference a year makes.. When this question was asked there only 3 active HUD listings in the city of Sacramento. Today there are dozens! Sure enough, the increasing supply has prompted HUD to make some changes, some of which may be helpful to the consumer....we'll see...
Prices for HUD homes now seem to be more reasonable as well.

Regarding the inspection process, there is an inspection contingency period, so you do not have to have your own inspection before bidding... Do read the HUD provided inspection prior to bidding though.. They will at least give you a vague idea of some of the obvious problems.
0 votes Thank Flag Link Sun Jan 23, 2011
Jim Walker, Real Estate Pro in Carmichael, CA

Erin is correct. As with any property, you make an offer/bid first, after it's accepted then you have a contingency period where you do your inspections. If you find something you don't like within the contingency period, you have the right to cancel without losing your deposit. HUD properties do have different rules and conditions so you do want to make sure your agent explains all of the conditions first. Good luck!

Jessica Waterbury
Lyon Real Estate
0 votes Thank Flag Link Sat Jan 22, 2011
DON'T waste the money till you have an executed contract for fact you might not we award the bid you just blew $400 - or +

Once you receive the confirmation you have WON the bid you should have an option period where you inspect the property.

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
0 votes Thank Flag Link Sat Jan 22, 2011
Hi Jen!

Our team is a LLB (local listing broker) for HUD... so we help them sell their inventory of HUD Owned Homes in the area. You can see our listings at !

Once your bid is accepted, your HUD Approved Realtor needs complete a special request to turn on the power for the home. This way you can complete your home inspections. You do have to come out of pocket though to turn on the utilities in order to do your inspection.

If personally would not rely on any report provided by HUD as your only inspection of the property. These report are super vague and are not intended to replace your inspection.

This biggest thing.. Work with someone who knows HUD. The process has recently changed so no special key is needed to enter the homes. But only HUD approved realtors can write bids on these homes. Technically they are not even supposed to show them.

Hope that helps! Make sure to checkout my blog dedicated to Sacramento HUD Homes for more info!
0 votes Thank Flag Link Sat Jan 22, 2011
As others have said, HUD homes are a different process than most other properties. Working with an agent that has access to a HUD key you can see the home. They should also be able to provide you with a copy of the HUD inspection report, that you can have your inspector or advisor review. You may want to take your contractor along when you look at the house. You will want to have your own inspection too if you proceed into contract. Have your agent explain why a property is listed as insurable or not insurable, that will affect what type of financing you can get. The property listing usually states if a 203K loan could be used.

The contracts are different too and how they treat your deposits, be sure you are serious about the purchase.

Good luck
0 votes Thank Flag Link Thu Feb 4, 2010
Back in the 1990's, A nationwide survey found that in that decade, HUD homes sold for an AVERAGE 110% of appraised value.


Buyers were flocking to pay 10% more for homes that were dirty, smelly, boarded windows, torn screens, had dead landscape, broken and missing appliances . TEN PERCENT MORE than clean regular sale homes.

Such was the attraction of the myth that HUD homes are a great bargain. -

Supply and demand operates.

If there are only 3 open HUD listings in the county at present., you can be sure that the demand outstrips the supply and the final bid will be way above market value.
0 votes Thank Flag Link Thu Feb 4, 2010
Jim Walker, Real Estate Pro in Carmichael, CA
Hi Jen: There is an inspection period of time for you to perform inspections after your offer is accepted. Wait until you have an accepted offer. If you don't like the condition of the home, you can ask for repairs (that they won't probably agree to) or you can cancel the transaction. Don't spend money on an inspection before making your offer.

Erin Phillips
Keller Williams Realty
Web Reference:
0 votes Thank Flag Link Thu Feb 4, 2010
I would not depend on the hud inspection. You should be able to make your offer subject to an insection, especially if the property is winterized. There is a process as others have outlined for you. The best thing is make sure you meet the dead lines set by hud and there agents. Hud expects first time buyers to be inspecting the property, a clause is specifically included in there contract.

Keith Manson
First Weber Group
Certified Distressed Property
Metro Milwaukee
0 votes Thank Flag Link Thu Feb 4, 2010
Sue Archer
Fair Oaks, CA
HUD homes are handled differently than other homes listed. Only HUD certified brokers can show these homes, or make offers on them. There is no MLS lockbox on the property and you must have the HUD key to access the home. The listing includes the Property Condition report, which is as complete as one that a typical buyer will hire someone to do. The price is also based on an actual appraisal of the property based on the condition. Only owner occupied buyers are allowed to bid in the first 10 days and a selection is made on the 10th day. Investors can only bid if offers are not received in the first 10 days. Therefore, if you want other inspections (beyond the home inspection they provided) before you bid, then just do it within the first 10 days, at your own risk and expense, prior to meeting the bid deadline.

That's the gist of the differences from traditional listings, but what might be 'new information' is what I learned at the Master's Club meeting last Friday. The HUD listing agent, who is the only listing agent for Sacramento county (although he handles 4 other counties in his responsibility) told us something very interesting. We currently have only 3 open listings, one of which was just accepting an offer. HOWEVER there are over 22,000 distressed homes currently still to be resolved. That's huge....
Web Reference:
0 votes Thank Flag Link Wed Feb 3, 2010
Michelle's answer was the one I was looking for someone to say! Thumbs up!

HUD typically does an inspection report covering the items she mentioned ahead of time.
0 votes Thank Flag Link Wed Feb 3, 2010
You will need an agent to give you access and then you will pay out of your pocket for the inspection. Your agent will have a list of recommended inspectors.
Web Reference:
0 votes Thank Flag Link Wed Feb 3, 2010
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer