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Buying HUD Foreclosures

Posted on the 21 September 2011 by Badmoneyblog @badmoneyblog
Buying HUD ForeclosuresThere are a couple of pieces of critical information that you need to know before we get started.  One, buying HUD Foreclosures are easier than you think.  Two, there are also more HUD foreclosures available right now than you think.
Like many people who paid their bills on time for years, we had good enough credit to buy another home. We rented out our condo (quite easily), which we bought in 2007 for $140,000 and decided it was time to buy a bigger house. We looked at new constructions and houses for sale on the open market. For $15,000 more than we paid for our two bedroom condo, we got a great three bedroom house with over 400 more square feet and a fenced yard. How did we do this? We bought a US Department of Housing and Urban Development (HUD) foreclosure.

There is a lot of good information and a bunch of misleading websites out there regarding the topic of buying HUD foreclosures. Some of these websites want you to pay them for lists of foreclosed homes.  Some want you to sign up to use their "systems" for buying HUD foreclosures.  So how do you climb out of the cloud of misinformation to find the answers? Luckily you have us! We have made finding information on buying HUD foreclosures easier by providing you the information you will need to get started.
The first step in looking at buying HUD foreclosures is at the
official HUD foreclosure website. There, that was easy. Now take a look at the other government agencies out there selling foreclosed and seized houses like the Department of Veteran Affairs, US Customs, and others by clicking here.
Now that you have an idea of the properties available, get a real estate agent. They will help you through the process of dealing with these different government agencies to get you the home you can afford and want. It is best to conduct some research and find a real estate agent who has experience with buying HUD foreclosures.
The HUD foreclosure website lists properties daily which are foreclosed and up for "auction". These auctions currently run on a 24 hour clock and go to the highest bidder each day, as long as the amount HUD is willing to accept are met.
Now onto our personal experience with buying HUD foreclosures. Please read and learn from our mistakes!
Initially, the property we were interested in was listed at $185,000. Working through my real estate agent, we started our bidding at around $130,000 and increased the bids daily by $2,500 until we finally met a threshold that HUD was willing to accept.  What was that final price?  Send us and email and we will let you know.
The HUD foreclosure we eventually bought was built in 2002 and, between 2007 and 2009; this home was valued at around $220,000, according to Comparable houses in the same neighborhood are selling or have sold for $185,000 - $215,000. When we finally got the place (after much haggling with HUD), all of the appliances were ripped out and it looked as if nothing had been updated since it was built. We knew there would be an investment of around $10,000 to get it up to standard, but even with that amount of investment, we still paid $20,000 under the least expensive house in the neighborhood.
It is important to remember that no one is going to hand you a house. However, buying HUD foreclosures is easier than you think. Do some research, see some of the homes, and be aware of the "as is" statement on most of these houses. Can we guarantee you will have the same experience? No. Will you make money by eventually selling your HUD foreclosure? We have no idea.
What we can tell you is, with an investment in research and some good luck; you can find a great place for a great price in a depressed housing market.  So we wish you good luck and happy shopping remembering that your purchase gets one of these depressed value homes off of the market so that the housing market can eventually recover!


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