Home Buying in Akron>Question Details

Gman, Other/Just Looking in Akron, OH

What a mess: My HUD home inspection and purchase problems. Help?!

Asked by Gman, Akron, OH Thu Dec 11, 2008

In Aug I found a HUD home I wanted to purchase. I put in an offer but I lost to another bidder. That fell through(?) and the house went back on the market in Oct 08. I raised my bid and it was accepted. Met w/ the realtor & signed the purchase agreement, put my earnest $ down, paid the agent to handle the water turn on & I should then get my home inspection.

Turns out that since the property has been vacant for over 12 mos, the city must inspect b4 I can turn on the electric, which needs to be on before gas so the furnace can be turned on so the water will come on. City finds electric problem and wouldn't clear the property. Contractor goes (on the sly) and gets electric on but now there's a gas leak and gas can't be turned on. I'm seeing a pattern.

I'm not allowed to make any repairs to the property but utils need on b4 inspection! My broker told me to just have a contractor go over there and best guess what the repairs are for a 203k loan but this seems wrong to me.

Help?!

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16
Oh yeah... Buying a HUD home can EASILY leave you homeless.. They usually close 2 moths late because of various BS... Be prepared to to feed the sharks with your ball of money... EVERYONE takes a slice of the pie... Doesn't matter if your purchase is 50K, EXPECT to shell out 6K whether it is a 203K loan or not.... I cannot tell you what a freaking nightmare it is purchasing a HUD home, ESPECIALLY, if your agent and bank do not know how to deal with them, and most do not.. Regardless of your agent, or bank, HUD pretty much nanny states the program.. In the end, you pay NO LESS, thank 6K and it's ALL giveaway except your earnest money, which in our case was, $975... DO NOT GIVE NOTICE AT YOUR PRESENT RESIDENCE WHEN PURCHASING A HUD HOME! You will wind up homeless..

I cannot help but think, this is more of an economic stimulus than it is a rehabilitation program.. Good luck.. The house we are buying has been on the market for 6 years and NO takers have either, put up with the BS long enough and pulled out (Which makes up most of them) Or ended up being rejected by the underwriter because HUD ordered another 50K done on your house MANDATORY in the sale and it kicks you out of your qualifying range... It's a racket and will one day soon be exposed...
3 votes Thank Flag Link Thu Sep 8, 2011
Unfortunately HUD homes are designed to fail. They are becoming increasingly difficult to close and the asset managers along with the title companies are only looking to collect extra fees from the buyers. We have had horrific experiences with HUD homes. They have become scams and money making schemes for the people involved and the US government is turning a blind eye. I have written an article on our experiences. See the web reference link.

Scott Marvin
RE/MAX
2 votes Thank Flag Link Mon Jul 4, 2011
OK, the problem may be that your agent is not familiar with city properties and the inspection/permit requirements they have; I trust this is in a major city - probably Akron - and cities are trying to make sure that substandard housing is brought up to their standards. More and more cities are doing this, with the suburbs of Cleveland being the most aggressive, then probably Akron and then Canton. Frankly, agents are often not trained on this stuff and unless they specialize in repos in the areas where they primarily sell, then they would not have experience until they ran into someone like you.

If your home is in a city with housing inspection requirements you may also face the challenge of hiring only contractors approved by the city - in other words, get out your checkbook for the permits and inspections you'll need, plus possibly higher labor costs. Many persons try to sneak around this requirement and often they get away with it but if you've already tipped off the city as to your intended purchase of this home, you may be watched closely.

When I buy a repo we always do the inside work first before beginning on the outside. Once there is outside activity, people start to notice (like the city's weekly trash haulers) and report the activity. (I also don't want to attract thieves.) The city wants the money from your permit fees; I like to keep my costs down so I wont tell you that everything I do is per their procedural requirements. However, should they inspect my work later, they never find any issues because the work is done correctly in accordance with code requirements. I am not telling you to do your work this way but I am suggesting that we are in a highly competitive market and every dollar saved counts.

As a reminder, I provide a 25% commission rebate to my buyers on all properties they purchase, so you'll get a check from me at closing. That should more than take care of the permit and inspection fees for you. Don French 330-327-1188
2 votes Thank Flag Link Thu Dec 11, 2008
" I am simply trying to get the word out about how our government is turning a blind eye and letting the asset managers and title companies rape the American public."

That's what blogs are for, you should try one.

Also, I find your use of the word "rape" in this context to be tasteless, inappropriate and lacking empathy.

Just my opinion.
1 vote Thank Flag Link Mon Jul 4, 2011
Did you read my blog post about the new stuff going on with HUD homes? Do you have any idea what is going on with HUD homes right now? I am offering very important information to folks interested in trying to buy a HUD home. The Columbus Dispatch has even interviewed me on this topic. I am simply trying to get the word out about how our government is turning a blind eye and letting the asset managers and title companies rape the American public. Please read what I am revealing before you accuse me of spamming.
1 vote Thank Flag Link Mon Jul 4, 2011
You seriously dug up a post from 2008 for the sole purpose of spamming your website? Now that is pathetic!
1 vote Thank Flag Link Mon Jul 4, 2011
I know this is way after the fact, but if you are ever in that situation again you just have to try to get HUD to lower the price. I dealt with a gas leak, and couldn't get inspection because of it. I've dealt with HUD on a number of occasions and I'm surprised my hair hasn't fallen out. One I just lost because of a hail storm, and they were not willing to budge on price. The paperwork was a mess coming in in odd orders and over a week time, so by the time I had all of it signed it was past the date of the hail storm. HUD kept my earnest money and now I have to write to the secretary of HUD and my senator to get my money back. It's easier not to deal with them, but I have to for my job.
0 votes Thank Flag Link Fri Jul 20, 2012
you will never get your money back..
Flag Fri Oct 25, 2013
It doesn't happen often, but I am truly speechless.
WOW!
0 votes Thank Flag Link Mon Jul 4, 2011
You are absolutely correct Gregario Denny Mr. VIP. The word "RAPE" is tasteless, inappropriate and lacking empathy which is exactly why I used it to describe the asset managers and title companies involved with HUD homes.

Thank you for pointing that out. I'm glad you are finally seeing the reality of HUD homes as posted on my BLOG. :)
0 votes Thank Flag Link Mon Jul 4, 2011
It is the same here in NH as well, it got to a point where it is not even worth showing HUD homes, i add that to the list of fannie and freddie homes where alot of teh agents they choose to list have too many listings, they dont answer your questions, dont retrun emails or phone calls and offers donet seem to get submitted, feedback never comes and help is even further away . All 3 are flawwed and need some serious help.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Mon Jul 4, 2011
I have no answer BUT I am in the middle of a GIANT GIANT Hud home mess - Put in the offer- excepted- told a closing date, sold our home a loss to make sure we didnt have 2- then there was a problem with the lead base paint funds- TOTAL nightmare- I had to actually contact people in Washington to get it figured out for the company Best Assests selling the hud home- well now that they have the right things going on BUT we just closed on our home today- and they CANNOT tell us when they expect to get to our HUD home and get the lead base paint deal done- So now we just have to be homeless ( I am in a hotel with my Child ) Boyfriend is at his parents with his- We have NO IDEA when they will get to it and no one can tell us- --- Actually I was told by a man at Best Assests that they were not Legally obligated to tell us- grrrrrrrrrrr--What a nightmare- so now we just have to wait for how long???????---- Anywho we went from being a little worried about two house payments to now having no house- Wonderful------ I also put a lot of Blame on my realtor- He should have told us never to have closed on our old home until we had closed on the new one- I think he should pay for the storage and the housing for us- Blah could go on and on- I love the house and it is a GREAT deal- but I am not sure how long 5 people and 5 cats can wait it out- I say BE CAREFUL and KNOW all you can BEFORE you decide to actually buy a HUD home to live in- you may become homeless :)
0 votes Thank Flag Link Tue Oct 27, 2009
I bought a HUD about 5 years ago...It is expected, to not be able to turn on the utilities for the inspection... Some homes have been raped by people less considerate then you... not to worry though... I did pay to have a home inspector, so he took into consideration that I couldn't possibly have utilities on...not safe...He wrote worse case scenario out for me... which was right on!!! Make sure you know your inspector... and rely on him to walk you through it... also know you can back out... But your not refunded the money... sometimes cheep is costly, worth the 300- 350 to find out you can't afford the fixer upper!

By the way, most 203K loans are based on guesstimates, high to low... There are no promises with repo homes... If it concerns you, your best bet is to always follow your gut feeling... Move on to one that makes you feel less afraid...
0 votes Thank Flag Link Sun Dec 21, 2008
Gman:

The gas company can tell you where the leaks are and a plumber can fix them fairly quickly in most cases. It may cost you a few hundred dollars, but if you like the house it is worth it in the long run. I agree that checking the property report online is a big help. http://www.nhmsi.com

Because the properties are sold as is, the inspection is for your appraiser and your own knowledge. HUD does not make repairs and does not reduce the price for inspection.

http://nhmsi.com/pdfs/broker_manual.pdf

Read page 7 regarding the AS IS clause with HUD homes. You can cancel the sale if you are doing FHA financing. If not, you will likely lose your deposit.
0 votes Thank Flag Link Fri Dec 12, 2008
are you sure you want to get into this mess?

if you can't get an inspection done because of the utilities is that good enough reason to get out of the deal and not loose your earnest money?
in the long run may be worth it to loose it to get out of this mess.

maybe this is why the previous deal fell thru.
why did you raise your bid if the other offer fell thru?
0 votes Thank Flag Link Fri Dec 12, 2008
Thank you Don. I thought I had an experienced buyers agent. She's turned out to be miserable though and it's like pulling teeth to even get to her.

I have viewed the online appraisal and the repairs that are preventing the utility activation are not listed in that sheet.

I guess I don't understand how I'm supposed to advance while in this catch-22.
0 votes Thank Flag Link Thu Dec 11, 2008
The problems you are having are not unusual and you should have been advised of your risks if you have a buyer's agent (the listing agent has no obligation to help you). HUD repos usually have their appraiser's estimate of repairs online before you bid; these are guidelines and usually you'll find a lot more repairs needed than what they find. If you did not view the appraisal file online you need to do that; it's in a PDF format that you can download. The repairs and the amount needed for them for a 203K loan are part of the FHA case number; you should research this before you spend any more money or time unnecessarily. It is correct that you will still need a contractor to give you an estimate and FHA will have a case reviewer analyze what was found and FHA will monitor the progress of the repairs. Hopefully this property will work out for you and likewise hopefully you have a seasoned buyer's agent, but if things don't work out and you'd like to work with someone experienced, I can help. Don French 330-327-1188
0 votes Thank Flag Link Thu Dec 11, 2008
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