HUD stands for "Housing and Urban Development" and is a government run program. Every month HUD will auction off homes that have been foreclosed on which had its mortgage insured by HUD. While this is bad news for HUD because it means that they now have to pay the lender any money that is owed on the home, it is great news for you as HUD will have to auction the home off in order to try to recover as much of the money as possible. That said the HUD website, is a great place to look for a home to buy - especially if you plan on living in the home.
It should be mentioned that all the homes that are to be auctioned off by HUD are sold AS-IS so it is recommended by HUD that you get a home inspection done before you bid on a HUD home. Here is how to go about the buying process:
Find a HUD Home: First you will want to find a HUD home to bid on. You can search the HUD website and look in your particular area to find a home that interests you enough to bid on it.
Find a Real Estate Agent: Next you will have to find a real estate agent that is familiar with HUD to help you with the bidding process. One of the rules in the bidding process with HUD is that you cannot make the bid on the HUD home by yourself so you have to have a real estate agent do it for you.
Play the Waiting Game: HUD homes are sold to the highest bidder with those who plan on living in the home getting first priority. In other words, HUD looks at all bids of those who plan to live the home first and if there are none, then they will consider investor bids. If your bid is the highest your real estate agent is notified by HUD and then they will notify you. The time table can vary here, but it is usually within a couple of business days.
Close the Deal: If you have the highest bid then all that is left is to make sure that you take care of all the loose ends before the closing date that HUD will give to your real estate agent. You will need to make sure that your mortgage is in order, you secure insurance for the home, and that all other paperwork is filed and ready for the closing table.
Just as with anything else that is auctioned off, a HUD home can be bought at an incredible value if you bid low enough and that bid is accepted. Because HUD is in a somewhat desperate situation with selling the HUD home there are many times that a HUD home will be won for under the current market value. To help ensure that you have the best possible chance at winning a HUD home just be sure that you go with a reliable and reputable real estate agent who has plenty of experience with HUD homes and you should be all set.
Join the best For Sale By Owner site and sell your house with no commission. Create a free home listing at FREEhomeownerlistings.com.