Ryan: I also wanted to add ( in addition to my former answer to you)-----that there is a very high fine-- for submitting an offer as an Owner Occupant-- and you end up renting it-- or having it as an investment property. There is a discosure you sign when submitting the offer (signed documents that must be submitted to HUD/MCBREO-- after the offer is accepted in online)---- that you must and will live in the property for at least 1 year. If you do not-- and the government/or others find out--- there are consequences and a very HIGH fine. I believe up to $ 10,000.00. It states on the disclosure-- submitted with the paperwork. One of my Buyers-- backed out-- as their plans changed during the transaction-- they were planning on living in the property for about 6 monthts-- and were planning on renting it out aferwards. Due to their change of plans with the time line of living in the subject property-- the disclosure/ policy and consquences-- the Buyer decided not to move forward. Kathryn

Sat Apr 19 2008, 10:58

Ryan: The HUD properties are first available for Owner Occupants Only-- for the first 2 weeks or so.
After a certain time period-- it is opened up to Investors. (Hence, you see more Owner Occupants).
For additional information on HUD properties-- or to receive daily new listings of HUDs-- sign up today at FindingTheHome.com. We are licensed HUD Brokers. All the best, Kathryn

Sat Apr 19 2008, 10:47

I guess you would have do a drive by to know the answer to that question. I like to believe that people are honest but i am sure from time to time a non owner will bid.

Thu Feb 28 2008, 07:48

It all comes down to what the buyer INTENDS to use the property for, at the time of the offer. They can change thier mind anytime. HUD may not audit for that, but the Lenders do. I've heard of them checking to verify owner occupancy. The real crime is loan fraud, rather than misrepresented use of the property, in my opinion.

Thu Feb 21 2008, 20:21

I'd think that it's true most of those buyers really are planning to be owner occupants. Loans for occupants require only 5% down rather than the 20-25% most investor loans would need. The owner can live their for 2 years, rent it for the next 3 years, then sell it and keep all profits tax free. An investor would either pay capital gains tax or have to do a 1031 Exchange.

While there are some deals to be had in the HUD market, most of what I've seen is the property is accurately priced for the market, location and condition. Some require a lot of repairs, in which case they usually get priced for less. But with the bidding system, the really good deals (homes that can be fixed up a little and sell for a profit) are difficult to win because there are those investor lurkers who can pay cash and close fast.

I've seen a couple of instances of loan fraud where the buyer claimed to be owner occupant but never moved in and instead just started repairs in preparation for a flip. And to tell you the truth, the Real Estate Commission is so overwhelmed with investigating more serious types of loan fraud I doubt much is being done about it. But banks/lenders are taking notice and often if a buyer attempts to buy a property as a primary residence, the lender is requiring a rental agreement on that person's current home to be completed and presented before making final loan committment. (Of course, that's how it's suppose to work but I was at a closing a few months ago where the lender had written a letter to the closing agent asking her to make sure the buyer had a signed lease agreement at the closing table. He did, but there was no verification that it was a true rental agreement or just a forged form. It turned out to be real and everything was fine, but you can see how easy it still is to get through the system, even though it's illegal.)

Anyways, I hope that helps and please do let me know if you want to discuss purchasing a HUD or investment property. It's not as easy as everyone seems to think but it can be done if you have the help of someone whose been through the process.

Sat Feb 9 2008, 09:20

Ryan.
There is always a chance that some of the people bidding during the owner time, dont plan on living in the home. But I would say for the most part the people bidding are owner occ- I base this on a few things; one HUD keep very good records of who is buying the homes, if you bid on a home, and you have bought on in the last year your bid will flagged for review. second, if an angent knowingly puts in an offer on a HUD stating it is owner occ, and it is not- that agent can face a few thigs, Fraud, a fine, and loose of the ability to sell huds.
I would add that with all the shake up from the last 18 months in the Denver market, most of those buyers that would lie, are out of the market, becasue they are the same people who were doing 100% financing on Investment properties, and those loans just are not around.
If what you are looking for is great prices on REO's I would say you should keep an eye on the HUD NOO list, but I would spend more time making low ball offers to the Banks.

Sat Feb 9 2008, 07:40