Regarding INVESTORS PURCHASING HUD HOMES

Asked by Carla Pennington, Georgetown, TX Tue Jan 29, 2013

Does an investor purchaser have the same 15 day option period for inspection that an owner occupant has? I've read on the hudhomestore site that an investor loses his option money if he doesn't close, regardless of the reason, but is this AFTER the inspection period? I know that even for an owner occupant it isn't like a usual home purchase where they can just change their mind, but must be accompanied by an inspection report that shows unacceptable conditions. True for investors, too?

Help the community by answering this question:

+ web reference
Web reference:

Answers

4
William Frie…, Agent, Austin, TX
Tue Jan 29, 2013
BEST ANSWER
Hi Carla,

It is my understanding that an Investor has the same option period for inspections as Owner/Occupants. However, Investors Earnest Money (not Option Money) is at risk of being lost if they back out from the purchase, regardless of the inspection results.
AS-IS covers a lot.

Bill Friedrich
512-517-2961
0 votes
John Crowe, Agent, Austin, TX
Tue Jan 29, 2013
If not an owner occupant, prepare to lose the EMD if your buyer (investor) does not close. If the buyer can't obtain financing, I believe HUD will refund 50% of EMD.
1 vote
I think what I read was that they MIGHT (seller's discretion) refund 50% if it's an insured loan that has been applied for and denied - but I think that's only owner occupied. This is a cash deal, so I hadn't paid close attention to that. I'll research some more to be prepared for the next deal. One of the things I like about real estate is there's an endless opportunity to learn! Thanks John!
Flag Tue Jan 29, 2013
Lisa Salinas…, Agent, Round Rock, TX
Mon Feb 11, 2013
they definetly do not give the money back, I learned this the hard way. They assume investors are more savvy. They definetly do not give it back for any reason for investors. Occupants will get their money back and I have actually seen them do some lender required work if needed. Trust me, I have sold more HUD homes than I care to say.
0 votes
Carla Pennin…, Agent, Georgetown, TX
Tue Jan 29, 2013
Thanks, Bill. I asked the question of a local realtor who lists HUD homes, and that was the answer he gave me as well. I think instead of earnest money, it should just be referred to as a really expensive option period if they change their minds! (joke!) NON REFUNDABLE seems to be the word for investors regardless of the reason. Or as you said AS IS means AS IS for an investor, and pretty close to that for an owner occupant!

Just getting my feet wet on HUD homes. Haven't done any where our bid was accepted. Thanks again for your reply.
0 votes
Search Advice
Search
Ask our community a question

Email me when…

Learn more