Denver area HUD Homes/ Denver HUD Owned Houses FAQ
Who can Purchase a HUD Home?
Any
individual or company who can qualify for a mortgage/home loan or pays cash can
purchase a HUD home. Buyers have to also have a pre-qualification
letter from a lender, on lenders letterhead, or proof cash
funds in the amount of or more than the price of the HUD home they are
considering purchasing.
To buy a HUD home, buyers must use a HUD register broker or real estate agent, who can place a bid on a HUD home.
How are Denver HUD Homes Sold?
All HUD Homes are listed the Denver Metrolist Multiple Listing Service (MLS) at their "AS-IS" fair market value. Buyers (with the exception of special program purchasers*) must use a HUD Registered Real Estate Agent. Registered Agents will submit bids on HUD homes on behalf of their buyers. The bid that is acceptable to HUD and has the highest net to HUD receives a provisional bid acceptance subject to receipt of all required documents. Once a bid is provisionally accepted, an original Sales Contract Package must be submitted to MCB within 48 hours.
Who can be an owner occupant in HUD purchases?
Owner Occupant is defined by HUD as follows: Any individual(s) who purchases a HUD home as their primary residence for at least 12 months after closing and who has not previously (in the past 24 months) purchased a home from HUD as an owner occupant.
What is the special sale incentive HUD is offering?
The Special Sale Incentive - $100 down payment initiative - is for owner occupants purchasing a HUD Home with FHA financing, with full price offers. The incentive is available for owner occupant purchasers who obtain an FHA Home Repair loan as well.
How is Fair Market Value determined?
The Fair Market Value is determined, "as is" by a licensed FHA appraiser. Copies of the FHA appraisal are available for the lender by request after a HUD home is under contract. If a HUD Home doesn't receive any acceptable offers, the price of the home may be reduced.
Does HUD make any repairs to the property?
Short and sweet. No. HUD properties are sold in "AS-IS" condition. There are no representations or warranties, expressed or implied, on any HUD property. HUD does not guarantee the condition of any property, FHA-insurable or not, nor whether it meets local codes or zoning requirements. Buyers are advised that there may be code and/or zoning violations on these homes and that it is the responsibility of the buyer to identify these violations. Buyers should, and it is highly recommended to have homes inspected by a qualified home inspection company to satisfy themselves as to the condition of the home at the time of sale.
Access to the Property
Any and all buyers MUST be accompanied by a real estate broker when viewing any HUD home listed for sale. Buyers may not enter a house without their broker/agent for any reason prior to closing. Brokers and/or agents must accompany any individual performing services such as home inspections, appraisals, or certifications.
Repairs, Improvements, or Occupancy Prior to Closing
No work may be done to ANY HUD home prior to the closing on the home! An accepted bid does not mean that on ownership has been transferred. Buyers do not own the home until after closing and the property is recorded in their name. Buyers may not use the home for storage or occupy the premises under any circumstances. Occupying or working on a HUD home prior to the close will be treated as trespassing. Failure to abide by this policy can result in the cancellation of the sale transaction, forfeiture of the earnest money deposit and may also involve suspension of bidding privileges for the selling agent and brokerage firm.
How Are Bids Made?
Your broker will prepare a contract and then submit your bid On-Line. If your bid is accepted the broker will then have 48 hours to deliver your contract to MCB.
Earnest Money?
Earnest money is the "good faith" money that accompanies a contract or bid. HUD recquires earnest money in the amount of $500 for homes under $50,000 and $1,000 for homes over $50,000 in value.area
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