About Coweta County, GA

In Part Five of this series What happens after you place a bid on a HUD home? we learned the three possible outcomes of placing a bid on a HUD home.

In this chapter, we will assume that your bid was accepted, and that a contract was executed by all parties, and that the sale is moving forward.

The first thing that is substantially different about buying a HUD home than other kinds of foreclosures is that the utilities are not turned on. If you plan on doing an inspection on the property that you placed under contract, you need to get permission from HUD to have the utilities turned on in your name.

In doing so, you will assume all of the risks of anything that could happen as the result of having the utilities turned on, such as an overflowing sink or frozen pipes in the winter time.

You will also agree to turn the utilities off when you are through with your inspection. This becomes the sole responsibility of the buyer to take care of turning the utilities off and on.

If the inspection uncovers defects on the property, they will not be repaired. You have purchased the property as-is where-is and in the condition that it was in when you entered your bid.

In the rare event that a latent defect is discovered of a magnitude that a reasonable person would not expect, there is always the possibility that a termination and release can be negotiated.

In the meantime, you will work with your loan officer if you are getting a mortgage, who, with your agent, will work closely with the closing attorney. HUD assigns a closing agent for each transaction, and if you desire the representation of an attorney you will need hire one other than the closing agent.

When the HUD attorney has completed the title work and your mortgage company issues a "cleared to close," it it time to head to closing for settlement!

Next: Part 7, Closing on a HUD home. Previous: How to bid on a HUD home.

In Part 4 of this series How to bid on a HUD home we learned how to enter a bid on a HUD property in Georgia. Now we will examine what happens after the bid is submitted:

Once you have entered a bid on a HUD home, you must wait until the offer deadline expires before you will know whether or not you have been successful and your bid has been accepted.

Usually, within a few hours of the deadline, one of three possibilities occurs:

1. No bid is accepted by HUD, and the property goes to a day-by-day bid process. When this occurs, bids may be submitted daily to HUD until such a time as one bid is accepted. This process can go on for several weeks and the property remains available to sale.
2. Another offer is accepted, and you lose the bid. This is probably, though not necessarily the end of your opportunity to purchase the property. If, as part of your bid, you elected the option of being in a back-up position, you may have a second chance if the winning bidders fail to execute their contract or close the property.
3. Your bid is "acknowledged." If your offer is accepted as the winning bid, the clock starts ticking. You agent will have two business days to deliver the original contracts signed in blue ink to the HUD contractor. Along with the contract, a copy of the earnest money check and a lender pre-approval letter must be submitted to create a valid contract.

The contract does not become official until it is signed by a representative for HUD. At the time that it is signed, it is email to your agent and the property status is changed to "under contract."

It's official, and it's time to move to the next phase of the process.

Next: Part 6, Taking the HUD contract through to closing? Previous: How to bid on a HUD home.

In Part 3 of this series How do you find a HUD home in your area that is for sale? we discovered that the best way to find a suitable HUD homes is to engage a real estate buyer's agent that is proficient in the HUD buying process.

Once you have found a HUD home that is suitable for your needs, it's time to consider making an offer. In the state of Georgia, HUD uses a blind bidding process that allows each potential buyer to enter a bid prior to a clearly defined bid deadline.

Before having your buyer's agent enter your bid, you need to do several things. First and foremost, you need to read and understand the property inspection report prepared by the HUD inspector. The inspector evaluates the condition of the property in order to establish an appraised value.

Finally, before you decide on a final bid price to offer, it is imperative that you ask yourself this question:

Is it more important to you to get the house or to get a good deal?

That's a fair question, and it is an important one. Some buyers fall in love with a house, and want to ensure a good chance of entering a successful bid. Other buyers are more intent on getting a deal on a house, and that overrides their desire for any particular property.

As long as a buyer is willing to lose the house, a low bid can be proffered. But if a buyer really wants the property, one must seriously consider the HUD appraisal price as at or near the market value.

In Georgia, a licensed real estate agent must be used to enter a bid for an owner-occupant HUD property. And remember that experience is counts.

The most valuable asset that a HUD buyer can have in the bidding process is the assistance of an experienced real estate professional that has successfully entered winning bids on behalf of their clients!

Next: Part 5, What happens after your HUD bid is accepted? Previous: How do you find a HUD home in your area that is for sale?

In Part 2 of this series Why should you purchase a HUD home? Many of the reasons for purchasing a HUD home were identified and listed.

Now we'll discuss how to go about finding a HUD property for sale. First and foremost, you should engage a good buyer's agent that is experienced and knowledgeable about HUD properties in your area. These agents understand the idiosyncrasies of HUD sales, and can help you find a suitable HUD property that is available in your area that is suited to your needs.

After entering into a brokerage agreement, your agent can assist you with setting up an account on a HUD contractor website. The website will allow you to search available HUD properties online, and will also permit you to download the inspection reports performed by HUD inspectors. Additionally provided is information about needed repairs, and a escrow amount that will be allowed to be rolled into your loan to complete the noted repairs.

The website will also clearly indicate the bid deadline period. Please be aware of this deadline when you are contacting your agent regarding a showing of a HUD home.

In Georgia, all HUD trained agents have a key that will open any HUD house offered for sale by HUD.

New HUD homes for sale are added daily, so it's important to stay informed on a daily basis. Once again, an experienced agent will make certain that you are aware of all HUD properties matching your criteria!

And once you find the property that is just right for you, it will be time for your agent to enter a bid on your behalf. The process will be discussed in the next installment of this series.

Next: Part 4, Bidding on a HUD home for sale. Previous: Why should you purchase a HUD home?

In part one of this series: What is a HUD Home? we discovered that a HUD home is a foreclosed property that had an FHA loan associated with it that was guaranteed by the United States government. The Department of Housing and Urban Development (HUD) actually takes title to the property.

Now in part 2 of the series we'll discuss the reasons as to why a HUD home may be a good purchase opportunity for a buyer:

First and foremost, HUD homes are priced in such a way as to encourage competitive bidding on the property. So many are priced below the average market price in a given neighborhood and can be genuine bargains for a potential buyer.

And even if the HUD home needs minor repairs, they can be are identified as "escrow" repairs by the HUD inspector, which means that money will be put into escrow to accommodate the repairs. In some cases, a home that needs extensive repairs may fall into a different category, but that's for another article!

Now here are some more great reasons to buy a HUD home in Georgia: All homes that qualify for FHA 203B financing can be purchased for only $100.00 down! That's right, only one hundred dollars down. Also, many of the homes qualify for a $1000.00 buyer's bonus. And since HUD pays up to 3% of closing costs, you can literally walk out of closing with a new home and a check!

And did I mention that first-time homebuyers could qualify for up to an $8000.00 refundable federal tax credit and up to an $1800 Georgia Income tax credit? That's more compelling reasons to purchase a HUD home now!

So if you can buy a HUD home at a below market price, and pay little or no money down, what are you waiting for? Call a HUD sales experienced real estate agent today!

Part 1: What is a HUD Home? Part 3 soon: How do you find a HUD home that is for sale?

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