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.
Lyon El Dorado Hills
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!
Lyon Real Estate
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
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 http://www.SacramentoHUDHomesForSale.com !
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!
The contracts are different too and how they treat your deposits, be sure you are serious about the purchase.
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.
Keller Williams Realty
For HUD homes, it's important to tour the home and jump on an offer as fast as possible, especially if you don't want to be bidding against all-cash investors. You've got 10 days to submit an offer, after which you'll have more competition. Your agent can send you automatic "new listing" emails from MLS so you will know the minute that HUD home comes on the market.
Not every real estate agent can show a HUD home. Agents at Lyon Real Estate, for example, have access to the HUD key. But not every real estate brokerage in Sacramento has a HUD key, and that's the key that's required for entrance.
Apart from the pre-inspection and lender's appraisal, you should perform your own home inspection and, if you're obtaining financing, your lender will do another appraisal as well, maybe even 2 appraisals. I keep a running list of home inspectors whom I've referred in the past for my buyers, so if one inspector is not available at the drop of the hat, another home inspector is.
First Weber Group
Certified Distressed Property
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....