HUD Properties Myths about them and how to buy a HUD home
I want to dispel a few myths about HUD properties. Lets begin with the definition of a HUD property. It is simply a property where the original mortgagee had a loan that was insured by the federal government that later the mortgage was in default on through foreclosure was reclaimed. HUD is a branch of the federal government, U.S. Department of Housing and Urban Development. HUD is not in the business of real estate so it is there goal to find suitable new owners to these properties.
Myth: That HUD-acquired homes are in poor repair or bad areas. That is a myth, because the definition above of a HUD home said nothing about the location or the condition of the home, only the backing of the mortgage. How does this help you as a buyer? You can become the new owner with as little as $100 down payment. HUD has a promotion where they will allow you to offer less than list price, ask for closing costs to be paid on your behalf (up to 3%) and still only put down $100 towards the down payment. Combine that with interest rates below 4% and it is a crazy time not to buy a home. Myth #2: HUD properties are in bad repair. THis is not always the case, many times these homes are move-in ready and when not, there are escrow funds available to cover some costs of repairs to be made after closing. That means that included in the purchase price are funds to cover required repairs.
So what is the process for buying a HUD home? First a Real Estate Agent is required for you to access a HUD property. Do not visit these homes on your own even though they are vacant. It is trespassing unless you are visiting with a licensed agent that is registered with HUD. The Grumbles Team is registered with HUD. If you have another agent ask them if they have a NAID number. If they do not know what that is then they likely do not have one and cannot assist you in buying a HUD home. Second, before you find a HUD home that interests you, you need to talk to a lender. I recommend Keri Como with F&M Mortgage. You simply must know what you can qualify for and have a pre approval letter before making any offers on HUD homes. Next is to find the home that fits your needs that is a HUD home. That is where we help. The Grumbles Team stays on top of the areas HUD inventory daily. Once a property is identified we will help you assess the best bid price. The HUD homes are sold by bidding online and we have experience in winning these bids for our clients. With a winning bid, then we proceed to inspection, appraisal, and finally to the closing table.
Contact a member of The Grumbles Team today at 615-587-5843 if you are thinking of renting and would rather pay your own mortgage than that of the landlord. TO rent requires a deposit and that deposit is likely higher than the down payment in a HUD home.
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The Grumbles Team is our family serving your family with your real estate needs in Franklin, Tennessee 615-587-5843.
EXIT Realty of the South | 1227 Lakeview Dr. Suite 1 | Franklin | TN | 37067 | 615.550.5555
Williamson County Real Estate Agent
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