Pluses and Minuses Involved In Buying A HUD Owned Home
You must fully understand these in order to be capable of making an appropriate selection for you personally.
Positives: Points In Favor Of buying a HUD Home
1. A property condition report is provided for you.
All HUD Homes come with a property condition report (PCR). These inspection reports are good for 6 months and are provided by an FHA approved inspector designated by the Marketing & Management company assigned to your state.
2. Appraisals
Another good basis for buying a HUD is the appraisals are provided for you and are good for 6 months. This offers the extra benefit when using an FHA approved loan as the lender is required to use this FHA appraisal so long as it is not older than 6 months. This eliminates incurring the additional cost of an appraisal that most lender require. One that you, the buyer, has to pay for.
3. HUD will pay up to 3% of purchase price towards buyers closing costs.
With all loans there will be closing costs.. Knowing HUD will allocate these funds to your closing is important since most buyers purchasing a HoH are typically first time home buyers and may not be aware of this.. If you take this into consideration, then it makes sense to buy.
The points above show some of the positive aspects of buying a HUD. There is also a negative side. Let me go over a few of the downsides.
Potential Drawbacks When Buying
1. Your agent may not be authorized by HUD as an Approved Agent/Broker.
Whenever you are buying, it is important that your agent is a an approved agent/broker. Most agents are not authorized as an approved agent/broker. Choosing an inexperienced agent is undoubtedly a bad thing. It could be the main reason you are unable to get your offer accepted by the Department of Housing and Urban Development.
2. Simple Contracts Can Be Difficult If Your Agent Isn’t Experienced
Department of Housing and Urban Development has an entirely different contract package. Most agents do not know this. The state specific forms mandated by your state are not applicable.
3. In most cases, NO COUNTER OFFERS.
The last reason may want to avoid buying a HUD owned home is in most cases, Department of Housing and Urban Development does not make counter offers.. I strongly advise you to think about this factor seriously. If your agent is unaware of this then he/she may make an offer that is far too low to keep your offer in contention if you opt to buy from the Department of Housing and Urban Development.
So that’s that. There are the actual advantages and disadvantages of buying a HUD. So it isn’t what everyone wants and requires. But it really will suit and help many. You should now take into account the points made above and choose if it’s best for you. The info presented should certainly help you to be well prepared to make the best decision.