HUD house woes!!

I won a bid on a HUD house. I bid on it based on the HUD home report. It looked like there wasn't too much to it. I also had my own home inspection done.

Turns out, it has some major flaws ($$$) The sub floor and beams under the bathroom are rotten and will result in the bathroom being totally torn up to get to the beams and repair and then putting the bathroom back together.

The other thing was-there is no access to the attic. None, zip, nada. The AC/heater checked out fine as far as the temp staying accurate. But not being able to see up in the attic really worries me.

According to my realtor-You buy as is and you lose your ernest money. But upon further reading, It looks like if you can prove there is a major safety issue (like a bathroom collapsing from rotten beams or the fact that the house had two fires in 2003-according to the next door neighbor) I might be able to get the ernest money.

Numbers on the house. HUD had the house listed at 61,500. I bid on it for 55,400 and they took it. The tax appraisal office has it listed at 72,270. I wasn't planning on spending a lot of money for repairs for this house. It was in great shape. New paint, new windows, Central heat/AC. New cabinets (all probably because of the fire)

I have a couple of options I see, Go back to HUD show my home inspection and say I want the money back based on the safety issues or wait for the price to drop further then try to get it cheaper.

Has anybody been able to get their ernest money back?

Not being able to get into the attic for an inspection really scares me. Especially if their was 2 fires in the attic. There is no telling if the trusses are stable.

Thanks for you help in advance. Sloozy8
:crying:

Edited: 06/26/2010 at 05:01AM

Jon Holdman

Real Estate Investor · Denver, Colorado

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Icon_minipost Apr 11 '08, 10:03 AM

Its easy enough to cut a hole to get access to the attic. Sounds like you already own the house, so shouldn't be a problem with a little demolition.

Don't know about getting your earnest money back. You had their condition report, you had your own inspection, you bought it. I think its your problem now. But losing your earnest money might be the best option if you think there's a serious problem.

How did you discover the subfloor and beams were rotten? That's not too uncommon when you start ripping apart a bathroom, but it would have been somewhat noticeable.

Edited: 06/26/2010 at 05:02AM

Jon Holdman, Flying Phoenix LLC

Susan Charbonneau

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Icon_minipost Apr 13 '08, 07:28 AM

No, I don't own it yet, I just won the bid. I had their report (hud) and then I hired an independent home inspector. The HUD inspection didn't mention anything about the subfloor and the foundation. Thats why I bid on it because it was such a clean great house with lots of updates.

HUD still says no to the earnest money because I am an investor, however I am going to tell them I need an attic access in the house. They should let me have that.

The home inspector that I hired found it when he climbed under the house. It was never mentioned when I read the hud report.

Originally posted by "Wheatie"

Its easy enough to cut a hole to get access to the attic. Sounds like you already own the house, so shouldn't be a problem with a little demolition.

Don't know about getting your earnest money back. You had their condition report, you had your own inspection, you bought it. I think its your problem now. But losing your earnest money might be the best option if you think there's a serious problem.

How did you discover the subfloor and beams were rotten? That's not too uncommon when you start ripping apart a bathroom, but it would have been somewhat noticeable.

Edited: 06/26/2010 at 05:02AM

Tom C

Real Estate Investor · Ohio

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Icon_minipost Apr 15 '08, 10:39 PM

You won't see any of these problems in a HUD property report. If you notice almost all of them are generic and say the exact same thing. As far as your earnest money. The only way that I know you can get that back is if something in the house has changed since you won the bid. This is why I always do a final walk through right before closing, just to make sure someone didn't break in and trash the place..

Meaning that if something happens to the house, holes in the walls, someone throws a lit match in the back window, spray paint all over the outside of the house, use your imagination, between the time you won the bid and your final walk through before closing, you can get your earnest money back..

Edited: 06/26/2010 at 05:03AM

Account Closed

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Icon_minipost Nov 29 '08, 08:16 AM

I have been doing some research on some of these homes and at least half of them say that there is mold or termite damage. I am not sure but I think this is a CYA thing that if the person doing the BPO sees any exposed wood or sees any water damage they have to note it which makes the home uninsurable by FHA

Edited: 06/26/2010 at 06:29AM

Chris OToole

Real Estate Investor · Bayou Vista, Texas

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Icon_minipost Nov 29 '08, 05:54 PM

I have won and purchesed 2 HUD homes in the past few months and I was given a inspection period... I did not discover anything so I don't know if you could back out but that was my understanding. Talk to the broker who put in your offer quick.........

Edited: 06/26/2010 at 06:29AM