I am purchasing a HUD home. The offer has already been accepted. The house needs a city inspection. If the

Asked by C.e, Oregon Thu Mar 26, 2009

I am purchasing a HUD home. The offer has already been accepted. The house needs a city inspection. If the inspector tells me what needs to be fixed, and I don't like it, can I cancel my offer? When someone buys a HUD home are they the true owners? What should I look out for in the contract? I will be reading the whole thing.

Thank you,

C.e

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19
Melissa Cost…, , Marana, AZ
Fri May 20, 2011
In regard to the HUD inspection period you have 15 days for due dilligence, You will have to provide reason and PROOF with a HUD home, for it to be a valid cancellation- and it all must be done within the inspection period. You will be the owner ay close of escrow when the property records in your name, until then it is HUD's property.
1 vote
David Chambe…, , Saint Petersburg, FL
Sat Mar 28, 2009
Taxes are paid by the year, the buyer will own the property for a portion of the year and the seller will own the property for a portion. The taxes are prorated so that one side doesn't get stucjk with the whole bill.
1 vote
Dp2, , Virginia
Fri Mar 27, 2009
Mark, that was pretty cool how you laid all of that out. :)
1 vote
David Chambe…, , Saint Petersburg, FL
Fri Mar 27, 2009
C.e., what does your agent say about this?
1 vote
Alan May, Agent, Evanston, IL
Fri Mar 27, 2009
That's going to depend entirely on the way your contract is worded. Check with your Realtor. Unfortunately, I'm not familiar enough with the purchase of HUD homes to even have a clue (sorry Dunes).
1 vote
Kari Shea, Agent, San Diego, CA
Fri Mar 27, 2009
Hello C,

You have been given all of the advice you need. With regards to a Real Estate Purchase Agreement, they have a lot of boiler plate verbiage and sections hat matter most. If you have an agent, they should be assisting you in interpreting between the boiler plate and the clauses that matter. Here is what matters most:

1. Agency disclosure (who is representing whom)
2. Financing terms as they are laid out in the contract
3. Time frame for you to verify funds for down payment closing costs
4. Loan contingency removal (time frame you have to get a loan or cancel)
5. Appraisal contingency removal (if it does not appraise at the value, when you can cancel)
6. Any seller financing?
7. Allocation of costs for inspections and reports (who pays for what)
8. What is the seller required to disclose (take the time to understand the list)
9. If there is an HOA, get the financials. The seller should have X days to produce them.
10. What is included or excluded from the sale
11. Time period seller has to deliver disclosures and reprots
12. Buyer inspection contincency removal (time frame you have to do due diligence or cancel)
12. Rights to extend or cancel
13. Liquidated damages clause (what the seller can keep if you move forwar and cannot perform)
14. Final verification of condition

Make sure you know these for certain.

Best of luck,

Mark and Kari Shea
San Diego Real Estate Experts
Foreclosure, Short Sale & Investment Specialists,
Development Opportunities & Traditional Real Estate
1 vote
David Chambe…, , Saint Petersburg, FL
Fri Mar 27, 2009
You need a Realtor to help you. Dunes who do we have that has answers in your neck of the woods, no pun intended.
1 vote
David Chambe…, , Saint Petersburg, FL
Fri Mar 27, 2009
Do you have a real estate agent?

Read your contract, what does it say about inspections? ther is usually an inspection clause with a time table, in florida it is normaly ten days and then we add in a specific dollar amount or percentage that repairs can't exceed.

Please clarify if the house meets code by the city or you just mean you home inspector.
1 vote
Dp2, , Virginia
Thu Mar 26, 2009
You've asked several interesting questions, and the simple (albeit not-very-helpful) answer to each question is, "it depends."

I don't know what the customs are in OR, but I know that in VA that sellers aren't allowed to require buyers to inspect a property, before submitting one's offer. The reason, that I stated what I wrote the way I wrote it, is that sellers in NYC usually require buyers to do the inspection, before submitting one's offer.

In Greater Cleveland, there's a big difference between a city and a buyer's inspection. Some suburbs there require every home to pass a city inspection before closing, and Cuyhoga County sometimes might require a home to pass a city/county inspection before closing--even if the city/suburb didn't require the inspection. Depending upon where one buys a property in GC, one might end up ordering both. Yet, it's also possible to get that requirement waived in some cases if the buyer hires a certified engineer (typically a civil engineer), who's registered with the county, to oversee the inspection and any rehab (if necessary).

Whether or not you can terminate your contract without any repercussions will depend on how your contract is written. Assuming you have an inspection contingency, then yes, you probably can terminate your contract if you don't like the results of the inspection (also assuming that the seller is unwilling to make the necessary repairs or adjust the price). Nevertheless, you might want to have your agent and/or a real-estate attorney to review your contract.

HUD homes aren't any different than any other ones--at least structurally. You can think of HUD homes as federal government REOs. Keep in mind that whenever you opt to buy a REO that you're buying them AS-IS, so you need to do a thorough job with your due diligence to ensure that you don't end up paying too much for the property.
1 vote
Anna M Brocco, Agent, Williston Park, NY
Thu Mar 26, 2009
Refer your question to a real estate attorney in your area.

Anna
1 vote
C.e, Home Buyer, Oregon
Fri Mar 27, 2009
Hi Mark,

There is no financing.

Thank you,

C.e
0 votes
C.e, Home Buyer, Oregon
Fri Mar 27, 2009
Well, they have given me information. I have asked a lot of questions, but that is normal for a first time buyer. I am worried about getting scammed. I don't want to get scammed. Also what is prorated taxes?

Thank you,

C.e
0 votes
Voices Member, , Benton County, OR
Fri Mar 27, 2009
C.e, Don't know if this will interest you....http://www.mcbreo.com/forms_pg.htm
0 votes
Voices Member, , Benton County, OR
Fri Mar 27, 2009
C.e , I think some of the questions you have may have answers in here....http://www.hud.gov/offices/hsg/sfh/buying/buyhm.cfm

http://www.freddiemac.com/corporate/buyown/english/purchasin…

Dunes
0 votes
Voices Member, , Benton County, OR
Fri Mar 27, 2009
I thank-you again David, I'm not sure that C.e is doing this in Oregon it was mentioned in a email C.e sent me that Detroit or Alabama was being considered at the time.

I felt strongly that rather than trying to respond to an email, it would be better to suggest C. e bring the questions here to get a broader more helpful selection of responses since mine are weak. I've bumped this question several times and no broad selection. C. e seems serious and has asked very good questions IMHO so I'd hoped I was giving good advice when I said to ask here...
I thank you and Dp2 for taking the time, it is appreciated.
0 votes
C.e, Home Buyer, Oregon
Fri Mar 27, 2009
Hi,

The house isn't in Oregon. It is on the East coast. I do have a real estate agent.

Thank you,

C.e.
0 votes
Voices Member, , Benton County, OR
Thu Mar 26, 2009
Let's try again and see if anyone offers an opinion this time....Hope so, Dunes
BTW Thank-you very much Dp2
0 votes
Voices Member, , Benton County, OR
Thu Mar 26, 2009
We'll see what we can do..........................................................................
0 votes
C.e, Home Buyer, Oregon
Thu Mar 26, 2009
No one seems to know. I also want to know what the difference is between me getting an inspection before I decide to turn in the contract and turning in a contract and then getting a city inspection.
0 votes
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