What about HUD Homes?

Similar to purchasing a house from the FSBO are HUD homes. HUD homes are homes that have been acquired by the U.S. Government when a homeowner with a HUD secured loan goes into default. The Government does not want the responsibility of upkeep for the house and usually liquidates these houses at auction. Contact a local HUD office in your area to find out how to get HUD houses at auction. In my area, only a real estate broker or agent can bid on the houses. I consider HUD a motivated seller because those houses are usually priced well below market value and are not on the market but a few days. You need to be quick to grab them.

More on HUD houses

I found an interesting HUD house online yesterday, went to see it today. It was listed for $47,000 and I determined thought that I would offer $40,000 to buy it. I estimated the cost to repair the house would be $20,000 including adding new central heat and air. I met the neighbors. I was getting my nerve up to make my bid. When I went to the website to find out how to make my bid, the bid now button was gone and it had "Contract Pending" next to it. Apparently, I wasn't the only one who thought this was a good deal. It last sold in 2007 for over $84,000. The moral of the story is on HUD houses, be sure to check each and everyday. Be ready to submit your bid quickly because the good houses in good areas are getting snatched up quickly.

HUD Houses

I went to a seminar last week on the topic of Loss Mitigation in HUD houses. The topic was how HUD can reduce the number of foreclosures using methods including tools such as Forebearance, Reinstatement, Repayment Plans, Mortgage Modification and Partial Claims. In all of these instances, the borrower is able to remain in the house. When the loss of the house is inevitable, the mortgagor can has several options to avoid foreclosure including Sale, Pre-Foreclosure Sale and/or Short Sale, and Deed-In-Lieu of Foreclosure. Not all of these result in a bargain for the investor, but they may and you should look into them. From what I have found out, HUD houses are not listed in the MLS. Their sales are generally very quick and offers in Memphis are submitted online through an approved HUD certified real estate agent. The prices of HUD homes can be quite lower than houses on MLS or FSBO because HUD does not want to hold the inventory and they really are not interested in making a profit on their repossessed houses. In fact, they are trying to mitigate their losses. Each day the house remains empty it decreases in value. My suggestion is to go to their site at www.hud.gov and see what is available in your area.