Great question, Foreclosed/HUD homes are different than buying from the real person that owned the home.
1, The Bank/HUD that owns the home has hundreds in not thousands of homes for sell and that home is just a number to them in a pile of files on their desk. Expect delays in response from them.
2, you have little negoitation before or after the offer is made.
3, Most homes have sat vacant for some time now and repairs you may not see are possible.
4, when dealing with the actal home owner they most likely have another home (only one) they want to buy and need to sell NOW. The Bank does not.
In most cases yes, the highest bidder wins however, special treatment is given to Public safety, Nurses & teachers.
You will have to be pre-approved with a leter from the lender usually sent with the contract. HUD or the Bank does not look at your credit only that you have been pre-approved.
Now, timing is an issue most will give you only a short time to inspect the property before option period is over so you need to move quick to have an inspector really check out the house, foundation, HVAC etc.
Then they will require loan docs 3-8 days in advance so they can sit in the pile of other contracts to review.
Plan on asking for more than 30 days to close the financing to be safe.
So, If I haven't scared you off of Foreclosure/HUD homes let me keep going.
Yes, you can get a deal on a HUD home and we really need people to live in these homes. It helps the neighborhoods out and down the road you will have a beautiful home.
If you have more questions send me a note to jerry@DallasFHAloans.com