HUD Homes 101 | Learn about Purchasing ... - Lead to Real Estate

Have you ever come across a home online that says ?HUD HOME SOLD AS-IS BY ELECTRONIC BID ONLY? or something similar? HUD homes are a relatively rare kind of home to find, and the selling process is quite a bit different than many other kinds of homes.

First of all, what is a HUD home? A HUD home is essentially a foreclosed home. However, the owners of the now HUD home had an FHA loan instead of a bank loan. FHA loans are simply backed by the Government (specifically the US Department of Housing and Urban Development or HUD) rather than a bank. So, once a house that is on this kind of loan goes into default, it is then owned by HUD instead of the bank. A HUD home can be any type of real estate including houses, condos, townhouses, mobile homes, or multi-family homes up to 4 units. Many people think that HUD homes are usually small starter homes, however, it is getting easier and easier to get FHA loans, and there are many luxury home that are HUD homes today.

Now lets talk about how you can buy a HUD home. The selling process for a HUD home is unique in the sense that it is sold using a bidding process. There is generally an initial Offer Period, or Exclusive Listing Period, in which sealed bids are accepted from your agent. Usually during this initial Offer Period, only those who wish to live in the home can make bids. These periods last anywhere from ten to thirty days. If the period is 10 days long, then on the 11^th day, all bids will be opened as if they were received simultaneously.?? HUD will generally accept the highest bid, or the bid that brings the highest net. At the end of this period, if no bid has been accepted, the bidding is then open to the public and investors may also bid.

So, as a quick review, HUD homes can be purchased by anyone, with the condition that buyers who are purchasing it as their primary residence get first dibs. Investors can bid on the home anytime after the Exclusive Listing Period.? When you are looking for a realtor to help you purchase a HUD home, you must have a HUD-registered real estate agent. These homes can be a great buy and earn you instant equity if you watch the market and find the right one for you. Good luck in your HUD home endeavors!!

Check out these HUD homes in San Luis Obispo County, California!

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