For those who are looking to buy a home but are on a tight budget or have other aspects offering a hard time to buy, HUD homes can sometimes be the right option.
Buying a home can be a very stressful, but exciting time and it’s essential to know the options given to you. Find out whether an HUD home might be a good option for you and your family when looking over this informative list of pros and cons of owning an HUD home.
If you are interested in HUD homes, you’ll want to first understand the risks and benefits of these types of houses, and if they are the right option for you and your family.
Here are some of the risks and benefits of investing in an HUD home:
- Why Buy an HUD Home?
In order to know why buying an HUD home is the right choice for you, it’s important to understand what a HUD home really is. A HUD home is a residential property that consists of usually 1-4 units and has been issued as an HUD because of foreclosure. These homes can usually be bought by anyone and are usually bidded on in an auction. HUD homes are usually then sold rather quickly once on the market, especially because of their price points.
Many turn to buying HUD homes because they can be found at relatively good deals on the market. There are usually a lot of HUD homes on the market as well, making it easy for a person to find one of their liking right away. Many times these homes are kept in great condition as they previous owners just leave it as is, and if they aren’t in excellent condition, HUD homes can sometimes be eligible for programs that help offer repair funds.
And since the potential buyers are dealing with the owner occupants rather than investors on these biddings, getting one of these homes for a decent price is usually a positive. HUD even helps pay for some of the closing costs for buyers which helps ease the burden of coming up with all the money needed for the home on their own.
While HUD homes can offer some great deals to potential buyers out there, it’s always important to do some heavy research on them first, as they may not be as great of a deal as expected. Always research on the deal to ensure that it is in fact a smart one for the location and the home before settling on the given price. Some homes can be going for a higher price than they are worth or have some serious problems with the home that go undetected.
Since these HUD homes are sold “as is” that means that they cannot be fixed up before purchase and can come with some serious problems. Sometimes a buyer can get escrows to help pay for the damages and repairs, but not always so it’s important to find out before buying. Buying a home “as is” can also mean that they have been sitting on the market with a major problem that has yet been detected or repaired, which can cause some problems down the road.
Shopping for HUD Homes for Sale
Finding HUD Homes for sale is relatively easy as all you really need to do is go online to the official HUD government site, where you’ll be able to find a home in your area of choice and place a bid on it. Of course there are many aspects to consider when doing this too, and some of the major items are listed below.
- Costs of HUD Homes
The costs of HUD homes are normally a lot cheaper than other houses on the market, so that’s a huge plus for a first time home buyer or someone who is on a strict budget. However, not all HUD homes are priced correctly. You’ll need to really do a lot of research like stated above, in order to find out whether the HUD home you are looking at is priced correctly. For these kind of questions, it might be a good idea to speak to your realtor.
- Condition of HUD Homes
It’s essential to find a home to your liking and within your price point, but you need to make sure that the home is also in decent condition. While HUD homes are offered at normally very inexpensive prices, this doesn’t mean that they are always in the best conditions. They are being offered to the market because of foreclosure and that can possibly mean that the occupant just vacated without doing any unfinished repairs that might have been needed. Just remember, sometimes a good deal might sound good, but the fine print always needs to be read, and this means research needs to be done. Asking your realtor about the home of interest is a smart choice too, since he’ll be able to provide more information on the property.
- HUD Home Neighborhoods
Many times you’ll be able to find HUD homes located in the neighborhood of your liking since there are so many on the market. All you’ll need to do is search for the area of your liking and you’ll be able to find what you need. However, other times these homes can be found in not so great areas so it’s a good idea to really dig around and find out more of the location before bidding. You might think that it’s located in an area that you like, but when you find out that it’s really a block or so of where you’re looking and the neighborhood isn’t as nice there, it’s not going to be a good fit for you.
- Paperwork Required For HUD Homes Sales
If you are interested in purchasing an HUD home, there are some HUD home requirements such as paperwork. All of the paperwork can be found directly on the HUD website where you search for homes. They have a list of forms for you to download. You’ll also be able to find HUD handbooks, regulation paperwork, and mortgagee letters here too, all associated with HUD.
HUD homes can offer a very affordable way to buy a house, and can be a great option for those who are looking for a deal within their budget. There are also many HUD homes to search through, so the chance of finding one to your liking is very high, but there are some disadvantages. It’s important to remember to always do your research and ask an expert to ensure you fully understand what you are getting involved in when you decide on an HUD home. They can be a great option for many, they just need to be well researched first.