List Price: $24900 Notes : A acre lot in North Salt Lake for 25k? There has to be a catch right?...There is, it's located in a landside zone, and the property is currently moving down the hill.
List Price: $130000 Notes : Not very attractive, has heating and air problems. The appraiser also says there may be structural problems. Not a very good investment if you ask me.
I recieved an email last week from a reader who was looking to purchase a HUD home, and I thought that this topic should be explored for the benefit of those who have never purchased a HUD. Today I'll start to discuss the procedure of purchasing a HUD home. Tomorrow, I'll break a HUD purchase down into Pros and Cons. And following posts will show you how to gain access to HUD information without the use of a real estate agent, tell you how to submit a bid on a HUD home, and other useful information.
HUD homes are usually homes that have been foreclosed upon which had government insurance on the loan used to buy the property. The Department of Housing and Urban Development (HUD) handles the foreclosure process and resale of the property.
HUD homes are relatively desireable, because many consumers believe that they are getting a good deal on a HUD home, because it requires a little bit of TLC. While this is true most of the time, I've seen HUD homes sell for much more than I think they should be valued at. I have personally put HUD homes under contract, later to feel that I had the home under contract at too high a price. In most circumstances, HUDs are a good property to buy IF YOU DO YOUR HOMEWORK, and if you don't mind doing a little bit of work.
HUDs are only on the market for about a week before they are sold to the highest bidder in a silent auction. The fact that they only sit on the market for a week means the home will only get limited exposure to the market, and may increase your odds of getting a good deal. It also means you have to be on the ball. You need to move very quickly if you want to put an offer on a HUD.
HUD reviews all bids after one week and then posts the bid results, and bid statistics. Most Realtors will look at the results for you and let you know how things turned out, I'll show you in future posts how to look up the data on your own.
An important note to end on is that I have lost a couple of HUD bids because I was using a Realtor who charged a 3% commission. That 3% caused the net proceeds of the sale to less than my bidding competitors. It's important that you shop for a real estate agent who offers a low commission so you don't get stuck losing a house because of your Realtor's greed.
Feel free to comment or email me with any questions.
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