Home Buying in Garland>Question Details

Kim&patrick…, Home Buyer in Garland, TX

It's better to buy a foreclosures or HUD home?

Asked by Kim&patrick Russell, Garland, TX Wed Feb 20, 2013

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Hi Kim & Patrick,

As you can see from recent posts, HUD homes are the same as foreclosures; however the process is slightly different because with foreclosures generally those are now with the bank and HUD which stands for Housing Urban Development is owned by government agencies. Fannie Mae offers a "Home Path" program and will even go into these distressed properties and do some repairs to bring the home up to a livable standard. The best advice to give you is to do your homework on the neighborhood and compare this home to other homes in the area that have recently sold. Also, getting a thorough inspection is a MUST so you are not surprised with large repair bills. HUD homes will typically have a property condition report which is helpful; however do not only go off that information because that inspection is done fairly quickly. Having a licensed inspector will save you time, money and energy down the road. You can find some "diamonds" out there but you have to do your research and find a reputable agent to work with. If you ever have any questions, please do not hesitate to call me.

Thank you,
Cindy Joseph
Keller Williams
214-208-4365
1 vote Thank Flag Link Sat Jun 8, 2013
Unfortunately buyers think that both of these are good deals, often they aren't, so buyer beware because often you'll get "as is" therefore you'd have to estimate how much repairs will cost on top of the cost.
0 votes Thank Flag Link Thu Feb 21, 2013
There is no definitive answer for this. Foreclosure, HUD and traditional sale homes can all be great deals or they can be overpriced for what the market is offering. Your best bet is to understand the market so you can see a good deal when it crosses your path.

Many HUD Foreclosures are overpriced initially and get lowered over time. The same goes for foreclosures. All of these homes hit the MLS and that is where they are seen buy potential buyers in the highest numbers. There is no magic bullet for finding great deals. Sellers whether they are individuals or banks want the highest dollar they can get. It's your job along with your agent to understand the market and know what a good deal is no matter what the source or seller is.

Hope this helps.

_______________________________________
Don Groff
REALTOR® | Mortgage Broker
Keller Williams Realty | 360 Lending Group
o 512.669.5599 m 512.633.4157
listings@dongroff.com | http://www.AustinListed.com
0 votes Thank Flag Link Thu Feb 21, 2013
One may not be better than the other. The pricing strategy for both foreclosed homes depends on the condition and location of the property and the market-value determined by the broker or appraiser assigned by the bank.

There are HUD properties that are priced very competitively and aggressively than other foreclosed homes owned by the banks. And most of the time, in my market, the offer accepted is higher than the asking when the property is priced aggressively. This is normally the case in my local market.

One advantage in dealing with HUD-owned homes is that appraisal has been performed prior to listing. Hence, PCR(property condition report) is available for review.

A big disadvantage though is for the investors because the earnest money deposit required ($500.$1000) is automatically forfeited even if home inspection report reveals defects or substantial damage. However, investors are pretty much savvy in assessing the condition of the property and because of the price it is listed for and what the investor could potentially pick it up for, he is more than willing to take the risk.

There are also conditions or parameters set when EMD (earnest money deposit) can't be refunded back to owner-occupied buyers.

Ulitilities activation is also the responsibility of the buyers. Not HUD's.

I don't discourage my buyers from looking at HUD properties because this can actually translate into an excellent opportunity for them.

Best.
0 votes Thank Flag Link Wed Feb 20, 2013
HUD homes are foreclosed homes and currently foreclosed homes are not really the bargain they were a year or so ago. If you are looking for a "deal", look for vacant homes that are for sale by an individual. Generally, these sellers have relocated and are making two payments for housing and are very motivated to sell. Give me a call, text or e-mail for a list of vacant homes in the area.

Sam Young
Accredited Buyers Representative
Coldwell Banker Jane Henry, Realtors
(972)837-0788
samsonsay@verizon.net
0 votes Thank Flag Link Wed Feb 20, 2013
It is better not to wear blinders when buying a home. Why would you only look at train wrecks if there is a sparkling, well-kept home right next door to the wreck?

Greed works both ways, pass on a good property just because it is distressed and you could be buying a ton of deferred maintenance. My experience leads me to believe that sellers do not usually default at the beginning of the problem, only after they reach the jumping off point. In the meantime the house suffers.

Not saying they should be excluded but neither should they be the primary target.

Good luck,
Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
Web Reference: http://jamessimms.com/
0 votes Thank Flag Link Wed Feb 20, 2013
HUD homes are foreclosures.....but the selling process is a little different.

The one nice thing about HUD homes are that the appraisal is already done and you know up front if it will qualify for FHA insured loan.
0 votes Thank Flag Link Wed Feb 20, 2013
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
Contact
both are foreclosures. Many of the foreclosures, particularly Fannie Mae owned ones utilize on line bidding similar to HUD's. Look at the home, asking price and the location. Keep in mind that these properties frequently get multiple offers, at least in our area of SW Florida, so you are in a bidding situation in which you will probably NOT know the other offers or even if you are currently highest.
0 votes Thank Flag Link Wed Feb 20, 2013
Didn't you already find a home? (Neither of these are your best bet.)
0 votes Thank Flag Link Wed Feb 20, 2013
Depends on the home, the price and the inspection results. The seller or the process does not matter. Location, location, location is also important.
0 votes Thank Flag Link Wed Feb 20, 2013
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