Tips for Buying HUD Foreclosures in Houston
Amongst the large number of foreclosures in Houston, there are a reasonable number of HUD foreclosures. The process to buy a HUD foreclosure is different from buying a bank foreclosure, so make sure you have all the relevant information before you start looking for HUD foreclosures.
Various government agencies can foreclose on a house for unpaid taxes, fines, etc. After the house has been foreclosed upon, the deed is transferred to the Department of Housing and Urban Development (HUD), which then puts the home up for sale. In cases where homes being foreclosed by lenders have FHA backed insurance on the loan, a claim can be filed by the lender for the remainder amount due on the mortgage. FHA would pay on the claim and the ownership of the house would be transferred to HUD. These would then be sold as HUD homes.
All HUD homes go through appraisals and are priced based on different factors. Some of these include the need for repairs that new owners would need to make and existing property values in the neighborhood where the home is situated.
However, you should still employ the services of a professional home inspector to gauge the condition of the house. Homes inspectors can find out if the home faces any structural damage, or other issues relating to amenities like water, gas and electricity. Since all HUD homes sell on an “as is” basis it is very important to know the extent of repairs that you will need to carry out on the home, and this should be the primary factor in you deciding on a reasonable price for the home.
A process which involves bids being placed is used to sell HUD homes. You would need to place a sealed bid through an HUD approved agent during the initial offer period. All the bids are opened together at the end of the offer period and the highest bid is usually accepted by HUD. In case the house is not sold after the initial offer period, bids are viewed soon as they are received.
If the bid that is accepted is yours, you will generally hear from your agent in a couple of days. A settlement date, normally 30 to 60 days from when you accept the contract, will be issued by the HUD. If your agent inserts appropriate wording into the contract, HUD pays the agent’s commission too.
A large number of sites on the internet can be referred to look for homes that are part of HUD foreclosures in Houston. Looking at as many HUD foreclosure homes as possible will help you reach a more informed decision.
