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Helpful Tips On Buying HUD Foreclosures

November 5, 2009
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HUD HOME REDMOND OREGON

These Homes Are hot, Hot, HOT!

However – YOU need to know key points to avoid problems:

  • You are only allowed in the first round of bidding if you are buying the home as your primary home.
  • If HUD is offering the home as eligible for FHA financing it already has an existing FHA appraisal (unless expired), AND the sales price is usually based on this existing appraisal.  If you bid above the sales price, you may have to pay the difference.  Example: if you bid $120,000.00 on a $100,000.00 price be ready to come up with the $20,000.00 they will not finance.
  • HUD does not automatically pay for the title insurance.  This will be an extra cost to YOU.  Only if HUD has agreed to pay closing costs, could the insurance be provided at HUD’s expense.
  • If HUD is offering to include repairs, the money needed for repairs may be ADDED to your FHA loan, but HUD doesn’t pay for it.
  • The Lender must deliver documents to the title company up to 10 days before closing date in some states. Make sure your lender and Real Estate Agent understand and can work together to accommodate HUD. 
  • HUD signs closing packages first. Then once the loan proceeds and the title company receive YOUR down payment and closing costs, and then you’re ok to sign the closing papers. Make sure that your lender is aware and can fund the loan BEFORE they have a completed loan package back to their office.  (This is sometimes referred to Table Funding.)
  • Closing delays are common due to “title clearing” issues. Foreclosed homes can have several liens due to utilities, taxes; etc that will need paid before closing can take place. 
  • Be prepared you may have to reschedule moving trucks, and it is possible you may pay rate lock extension fees with your lender.

If that sounds like a lot, it is, so make sure you are working with a team of qualified professionals to handle these issues when they come up you will be glad you did…

 

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