And while it’s always a sad situation when someone loses their home to foreclosure, it also presents a great opportunity for those looking to buy a house at a great price. There really are some amazing deals available for foreclosed properties right now, especially if you know where to look and how to buy them.

One of the best opportunities for buying a foreclosed house at a ‘steal of a deal’ is HUD homes, or properties that were financed via an FHA loan and then reposed. I’ve personally helped 5 people in the past 8 months purchase HUD homes and every single one of them has gotten an absolutely fantastic deal on their property.

According to the government’s website about HUD homes:

What is a HUD Home?
A HUD home is a 1 to 4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim.

Who can buy a HUD Home?
Almost anyone! If you have the cash or can qualify for a loan (subject to certain restrictions) you may buy a HUD Home. HUD Homes are initially offered to owner-occupant purchasers (people who are buying the home as their primary residence). Following the priority period for owner occupants, unsold properties are available to all buyers, including investors.

So, if you’re in the market for a new home, it would definitely pay to take a look at purchasing a HUD home!

My only bit of advice would be DEFINITELY consult with an experienced real estate agent, and I don’t say that just to get you to call me (although that would be nice )  While HUD would have you believe that buying one of their homes is an easy, painless process, it’s not.  While most real estate transactions can be a stressful, frustrating experience at times, purchasing a HUD home is much worse.

You still have to go through all of the typical real estate paperwork and processes, but with a HUD home, you now have to do all of these things through a government agency, and as we all know, they aren’t always they easiest groups to work with!

Don’t let that discourage you though!  Just make sure you work with an agent that has the experience and know-how to help make sure your HUD transaction goes smoothly and you’ll quickly be able to enjoy a fantastic new home at a great price!

1. Choices, Choices, Choices. No matter what your price range is, this is a time where there are plenty of houses to choose from. Only a few years ago, the buyer was forced to make compromises in a very selective market, not always finding the home of their dreams. With the home inventory growing, this is the buyer’s time to buy and be selective.

2. Love, Not War. When you find the house you love, the last thing you want to happen is a bidding war. The buyer has more negotiating power when they are the only bidder, and time, money and sanity is saved. Bidding wars can cause complicated clauses and can drive up the properties listing price.

3. You can make an offer. Today the sell price list vs. price ration is about 96%. A seller will not be insulted if you ‘make them an offer they can’t refuse’.

4. Take Your Time. In the hot seller’s market that existed everything was rushed. Find a house before other buyers did. Hurry up and make the offer. Today a buyer can take their time. Look at several homes and think about your decision for a few hours.

5. Do Your Due diligence. In this market a buyer is encouraged to obtain a home inspection, termite inspection, and appraisal. In 2005 many buyers waived these contingencies in order gain an advantage with multiple offers.

6. There are plenty of specs. Now that the market has turned, there are several specs sitting on inventory. Builders offer incentives, and are now more flexible.

7. Repair requests are welcomed. After a buyer completes a home inspection, they are allowed to submit a repair request to the seller. In the past a seller might insist the home was sold ‘as is’. Many times, there were back-up buyers waiting for a primary buyer to upset the seller whose home was increasing in value almost daily.

8. Few Investors. It is estimated that one third of all sales in 2005 were to investors. These non-owner occupied buyer caused the market to inflate and affordability to decline. Mortgage fraud became commonplace. It’s a great time to buy without having to compete with hundreds of prospective landlords.

9. Real Financing is available. The ‘wink, wink’ zero down, no doc, adjustable, sub-prime loans are gone. Fixed rates are back. FHA financing, first time homeowner bond programs, special loans for teachers, and police officers are back in business. It’s a great time to buy real estate!

10. Location, Location, Location. Today’s buyers can find homes closer to work. In this market, reasonably priced homes are within biking or walking distance to schools, rapid transit lines, and relatives.

Source: Paul Pastore: Broker Agent News