Shannon Judd with PEMCO Limited, a marketing management company for the HUD foreclosure process gives the Think Glink “Profiting from Foreclosure” event attendees information and tips for buying a HUD home. If you are looking to buy foreclosed Atlanta real estate to rent or own, consider these tips before bidding on a foreclosed HUD home. There are currently more than 4,000 HUD homes in Georgia.
HUD homes are available to purchase to anyone. HUD sells to three types of buyers:
- Owner-occupant buyers (must occupy property for at least one year)
- Investors – you can buy as many as you want
- Government agencies and non profits.
All HUD homes are sold online through an auction site. Visit www.hudPemco.com to see foreclosed HUD homes and get information on working with HUD. Homes are listed first with a 12 day priority owner-occupancy preference. This is a sealed bid auction. Potential homeowners wishing to buy and live in the house should submit one bid, one time. After the 12 days, the home is open for a daily auction and open for investors to bid on it. As an investor, you will have to use an agent to represent you in the auction . Your real estate agent will submit your bid on your behalf. Be prepared to give your social security number – that is how they monitor and track their auctions and it is best if you are prequalified.
You will find out right away whether you were awarded the contract. Typically you will be notified the next day. At that point, documents are executed and you have 45 days to close.
On average what is the sales price relative to where the price starts? All properties are listed “as is” based on FHA fair market value, comps and appraisals are other foreclosed properties.
HUD homes can be viewed prior to bidding; however, you can not put a contingency on a HUD home, so read the property contingency report. If your home inspection reveals the same things that the contingency report states, but you didn’t read the contingency report, it’s kind of too bad, HUD already warned you about that!
Shannon gives advise to attendees on buying HUD foreclosures, “You want to work with an agent who has bought HUD homes before.” She continues, “Every 10 days or so the price is reduced and every 10 days or so we change what we are willing to accept. If your agent has sold a number of HUD homes they will understand how this works.”
Top tips for buying from HUD:
- Learn how it works at www.Hud.gov – great site to search
- HUD registered agent – find one
- Lender – find a lender who is comfortable working with HUD
Right now there is a ton of downpayment assistance for owner-occupied HUD properties, so it is a perfect time to buy.
Let us know if you have purchased a HUD foreclosure as your primary residence or as rental property and how that is working out for you.