6 Things You MUST KNOW BEFORE MAKING AN OFFER ON A HUD HOME
Not knowing this could cost you a lot of money!- You must use the services of a licensed real estate agent to purchase a HUD home. Not just any agent can write the offer. Only an agent whose broker has received what is called an NAID Number from the governing entity can do so.
- You will need a minimum $500 earnest money deposit when you write the offer on homes $49,900 and lower and a minimum $1,000 earnest money deposit on offers above $49,900. This deposit must be in the form of a certified check to your real estate broker.
- You must be fully approved with your lender prior to writing an offer to purchase a HUD home. If you are not and you cannot complete the purchase HUD will more than likely keep your earnest money deposit. There may be repair money already owed to HUD for repairs they made prior to your offer to purchase. Your real estate agent should make sure that there are either no repairs monies owed or that you understand how much is owed because you will be expected to pay this at close.
- Time is of the essence when writing an offer to purchase a HUD home. Your real estate agent must overnight mail all original documents to HUD's attorneys within 48 hours of the acceptance of your offer. If this does not occur, HUD, at its' discretion, may terminate your offer to purchase.
- The Department of Housing and Urban Development (HUD) will not turn on the utilities (gas, water, electric) for a buyer to do home inspections. HUD will give the buyer authorization to have the utilities turned on in the buyer's own name as long as the buyer agrees to accept full responsibility for any damage that may be done to the home as a result of the utilities being turned on.
- HUD will not pay for any repairs a buyer's lender may require as a condition of financing. Most often, a buyer will be required to have the repair money put into an escrow account at closing.