HUD Homes

These properties have already been through the foreclosure process and are placed on the market by HUD (The Department of Housing and Urban Development).  They are vacant, sold "as is" and ready for immediate occupancy.  Although they are advertised in the MLS they are purchased through an on-line bidding process.  The first 10 days a HUD property is on the market, only buyers who plan to live in the home are able to place a bid.  All bids must be placed through a real estate agent.  HUD requires a minimum down payment of 3% of the sales price (the $100 downpayment program is not currently available).

Earnest money deposits must be in the form of a cashiers check and require a minimum of $1000 on all listings over $50,000 and $500 on properties $50,000 or less.  Lender Pre-approval letters or proof of funds for cash purchases must be submitted with all offers.  If a suitable offer is not accepted during this initial bid process, it is then open to investors.  Although the bidding process moves quickly, allow a little longer to close than on a normal real estate transaction.  HUD purchases are not usually a good match for buyers who need to be in a home within a certain time frame. To learn more details about how to buy a HUD property, visit www.hmbireo.com. 

Bank Owned/Corporate Owned

Bank owned homes (often called REO properties) have also been through the foreclosure process and are currently owned by a bank or corporate investor.  They are sold "as is" and are vacant and ready for occupancy.  They are normally listed on the MLS and are viewed through a realtor. 

Offers are made the same as on any other property.  The banks will require a lender pre-approval letter or proof of funds (cash offers) be submitted with all offers.  They will not consider most contingencies.  For example, you cannot expect them to accept an offer contingent on the sale of another home.  It may take several days for a bank to respond to an offer depending on the individual bank, so a little patience goes a long way.  Closing may or may not take longer than an ordinary transaction, it depending on each bank.  Find Foreclosure Properties in Indianapolis.

Pre-Foreclosure/Short Sales

Short sales/Pre-foreclosure listings take place when the sales price of a home is less than the outstanding mortgage balance on the property.  Usually the homeowner is behind in payments and cannot afford to keep the home, but can also not afford to sell the home because of the loss of equity (often due to 2nd mortgages) and expenses involved with the sale of a home.  In a short sale situation, the homeowner still retains title to the property, but all offers are contingent on their lender's approval. 

Sellers must submit a hardship/short sale package to the bank for their consideration.  The bank will review the package and decide if they will accept less than the total due, thus the name "short sale".   The bank usually allows and even prefers the homeowner to remain in the home until the sale is completed. 

These homes are listed on the MLS and may include the words "short sale" or "pre-foreclosure" in the property discription section.  They are usually sold "as is".  Offers are written with a realtor in the same manner as a normal property. The homeowner can accept or counter the offer.  Once agreement is reached with the homeowner, the offer is then sent to the bank for their approval.   It's important to note that lenders will not consider most contingencies.  For example, you cannot expect them to accept an offer contingent on the sale of another home. 

Banks are currently overwhelmed with short sale offers and may take as long as several months to respond to an offer, although local banks tend to move much quicker than large national lenders.  Short sales can be great values, but they require patience and can be very frustrating. It's possible you may wait for several weeks, only to discover the lender has accepted another offer because they often continue to market the property and take additional offers until they make their decision.  Then once the bank finally accepts a short sale offer, the buyer must be prepared to move very quickly as the bank may require the transaction to close quickly.

Find Short Sale and Foreclosure Properties in Indianapolis and surrounding areas.