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IN THE NEWS!
 HUD Homes,Bank Owned,
Pre-Foreclosure, Shortsales......
Are they good deals?
What should you know?
HUD Homes
These properties have already been through the foreclosure process. They are vacant, sold "as is" and ready for immediate occupancy. 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 are placed through a realtor in an online bid process. Usually HUD requires a minimum 3% downpayment, but right now, they are offering an incentive program where owner occupants may purchase a property using FHA financing with a $100 downpayment. Earnest money must be in the form of a cashiers check and a minimum of $1000 on all listings over $50,000, $500 on properties $50,000 or less. Lender Pre-approval letters or proof of funds 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 goes quickly, it may take an extended amount of time to close. HUD purchases are not usually a good match for buyers who need to be in a home within a certain time frame. To find HUD homes for sale in your area, and to learn how to buy a HUD property, go to www.hmbireo.com.
Bank Owned/Corporate Owned
Bank owned homes 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, although the banks do require a lender pre-approval letter or proof of funds be submitted with all offers. 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, depending on the bank.
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. After reviewing each individual loan, the bank will decide if they will accept less than the total due and that is called a short sale. Many times the bank allows the owners to remain in the home until the sale. 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. Banks are overwhelmed with these right now and may take as long as several months to respond back to an offer. They will continue to market the property and take offers until they make their decision. Once the bank accepts an offer, the buyer must be prepared to move very quickly as the bank may require closing within a few days. |