HUD Home For Sale | Sales Procedures And Requirements For HUD Homes For Sale

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A HUD Home for Sale has certain sales procedures and requirements that you should know. If you do not follow these procedures there will be a good chance you will not get the HUD home that you bid on or you may lose it even if your bid is accepted.

Before bidding on a HUD home for sale you need to know some of the HUD sales procedures and requirements.

HUD Home For Sale | Sales Procedures And Requirements For HUD Foreclosed Homes For Sale

1.  All HUD homes are sold strictly "AS-IS", and they mean "AS-IS". HUD will not do repairs! There are no representations or warranties, expressed or implied, on HUD home for sale.

2.  HUD does not guarantee the condition of any government foreclosed home, listed FHA-insurable or not, or whether it meets local codes or zoning requirements.

3.  Purchasers must make sure the home is in a condition they are willing to accept before buying HUD home. They have fifteen days(15) days after the ratification date on the Sales Contract to have all inspections made.

4.  The next decision is a HUD Home Inspection something you want or not. A home inspection is not required but it is HIGHLY RECOMMENDED! A home inspection normally cost between $200 to $400 based on the size of the property and what other tests you may want such as termite, water, and septic system tests.

5.  Purchasers must be pre-approved by their lender for the amount of the purchase price before bidding. If they are going to pay cash then they need a "Proof of Funds" letter from their bank.

You will want to contact your lender before making a bid to get pre-approved. If the property you are bidding on needs repairs you would want to check with your lender to see if they will do renovation loans like a FHA 203K Mortgage. Not all lenders will do renovation loans.

6.  Earnest money is required in buying HUD home. The required earnest money is to be deposited with selling Broker before bidding on HUD home. The earnest money amount is determined by the initial listing price of the property. If the initial listing price is below $50,000 the earnest will be $500 and if it is $50,000 and above the earnest money will be $1,000.

7.  The earnest check has to be a cashier or certified check or a money order made out to HUD. The earnest money used to stay with the buyer's agent real estate company but now it is sent to the M&M contractor along with the Sales Contract Package.  You can get more information here about HUD Foreclosure Homes Earnest Money Policy.

If you want to back out of the contract after it has been accepted you may lose all or part of the earnest money! Learn more here about Earnest Money Return Policy For HUD Foreclosure Properties.

8.  Offers for buying HUD home must be made through HUD-registered broker. In other words, you have to use a real estate agent. Not just any real estate agent, but you should use an experienced one in buying government foreclosed homes.

This gives you a very basic knowledge about the sales procedures and requirements about buying a HUD home for sale, but you should check with your real estate agent for procedures and requriements for your area.

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