From the BiggerPockets Blog

 BiggerPockets Blog »

Jump to Forum View All

Click a category below to view different forum categories.


General Info

BiggerPockets Q&A, Site Questions, & Announcements

1522 topics, 14440 posts — Last Post 04/22/14, 10:54PM

BiggerPockets Exclusive PRO Area

118 topics, 843 posts — Last Post 04/21/14, 12:11PM

New Member Introductions

10956 topics, 86261 posts — Last Post 04/22/14, 11:30PM

Real Estate Success Stories

397 topics, 6186 posts — Last Post 04/22/14, 10:39AM

General Real Estate

General Real Estate

Buying & Selling Real Estate

5980 topics, 47130 posts — Last Post 04/22/14, 11:36PM


649 topics, 5853 posts — Last Post 04/22/14, 09:53PM

Get Foreclosure Help - Help Stop Foreclosure Forum

316 topics, 2557 posts — Last Post 04/21/14, 03:59PM

Home Owner Association (HOA) Issues & Problems Forum

237 topics, 1609 posts — Last Post 04/17/14, 08:53AM

Do it Yourself

658 topics, 6312 posts — Last Post 04/22/14, 09:11PM

Reviews & Feedback

Real Estate Deal Analysis and Advice

3701 topics, 29678 posts — Last Post 04/22/14, 11:36PM

Real Estate Guru, Book & Course Reviews and Discussions

1138 topics, 11588 posts — Last Post 04/22/14, 08:22PM

Ask About A Real Estate Company

742 topics, 7341 posts — Last Post 04/22/14, 11:25PM

Real Estate Investing

Real Estate Strategies


5625 topics, 43878 posts — Last Post 04/22/14, 10:27PM

Rehabbing and House Flipping

3345 topics, 31074 posts — Last Post 04/22/14, 10:06PM

Real Estate Development & New Home Construction

554 topics, 4694 posts — Last Post 04/22/14, 09:17PM

Innovative Strategies

705 topics, 6044 posts — Last Post 04/22/14, 04:06PM

Tax Liens, Notes, Paper, & Cash Flows Discussion

867 topics, 6692 posts — Last Post 04/22/14, 08:22PM

Rent to Own a.k.a. Lease Purchase, Lease Options

696 topics, 4914 posts — Last Post 04/21/14, 10:03PM

1031 Exchanges

143 topics, 1062 posts — Last Post 04/22/14, 03:21PM

Foreclosure Investing

General Foreclosure & Pre-Foreclosure Forums

1691 topics, 11313 posts — Last Post 04/22/14, 09:26PM

HUD, VA, and Tax Sales

416 topics, 3102 posts — Last Post 04/22/14, 01:39PM


1217 topics, 10594 posts — Last Post 04/22/14, 09:38PM

Short Sales

1538 topics, 13139 posts — Last Post 04/22/14, 01:38PM

Landlord & Tenant Forums

Landlord & Rental Property Questions

7233 topics, 71002 posts — Last Post 04/22/14, 11:12PM

Mobile Homes & Mobile Home Park Investing

638 topics, 5142 posts — Last Post 04/20/14, 08:42PM

Investor Basics

Starting Out

7724 topics, 60622 posts — Last Post 04/22/14, 10:08PM

Investor Psychology

431 topics, 6107 posts — Last Post 04/20/14, 06:04AM

General Real Estate Investing

4725 topics, 37300 posts — Last Post 04/22/14, 10:31PM

Real Estate Investor Marketing

1737 topics, 14138 posts — Last Post 04/22/14, 06:37PM

Commercial Real Estate

Commercial Real Estate Investing Forum

1412 topics, 9003 posts — Last Post 04/22/14, 09:04PM

Multi-Family and Apartment Investing

1121 topics, 9347 posts — Last Post 04/22/14, 10:00PM

The Business of Real Estate

Real Estate Technology and the Internet

Real Estate Technology, Social Media & Blogging

644 topics, 4909 posts — Last Post 04/22/14, 12:20PM

Business Basics

Goals, Business Plans & Entities

831 topics, 7564 posts — Last Post 04/22/14, 08:50PM

Real Estate Finance & Legal

Financial, Tax, and Legal

Tax, Legal Issues, Contracts, Self-Directed IRA

2800 topics, 20116 posts — Last Post 04/22/14, 09:59PM

Property Insurance

310 topics, 2055 posts — Last Post 04/22/14, 07:38AM

Personal Finance Discussion

330 topics, 2754 posts — Last Post 04/22/14, 12:06PM

Loans, Mortgages, Credit Lines

Private & Conventional Lending Discussion

2851 topics, 19834 posts — Last Post 04/22/14, 10:54PM

Creative Real Estate Financing

1216 topics, 8833 posts — Last Post 04/22/14, 11:24PM

Crowdfunding Real Estate

35 topics, 463 posts — Last Post 04/19/14, 06:24PM

Real Estate Professionals

Real Estate Professionals

Real Estate Agents

1215 topics, 8018 posts — Last Post 04/22/14, 09:50PM

Bankers, Lenders, and Mortgage Brokers

442 topics, 1929 posts — Last Post 04/22/14, 11:03AM


269 topics, 1690 posts — Last Post 04/22/14, 07:33AM

Local Real Estate

Local Real Estate

Local Real Estate Networking & Recommendations

2007 topics, 11695 posts — Last Post 04/22/14, 10:52PM

Americans & International Real Estate

161 topics, 566 posts — Last Post 04/14/14, 11:19AM

Foreigners Buying in the USA

62 topics, 409 posts — Last Post 04/10/14, 06:27AM

Canadian Real Estate

65 topics, 439 posts — Last Post 04/22/14, 09:27AM


Real Estate Marketplace

Real Estate Marketplace

15070 topics, 54077 posts — Last Post 04/22/14, 10:47PM

Real Estate Events and Happenings

167 topics, 2585 posts — Last Post 04/22/14, 11:30PM


Off Topic


2906 topics, 32433 posts — Last Post 04/22/14, 09:47PM

Housing News & Real Estate Market

918 topics, 8371 posts — Last Post 04/22/14, 09:18PM

BiggerPockets Real Estate Investing Summit

97 topics, 1751 posts — Last Post 04/10/14, 02:27PM

BiggerPockets Resources

Forums » HUD, VA, and Tax Sales » HUD property I'm purchasing has been Vandalized!

HUD property I'm purchasing has been Vandalized!

20 posts by 9 users


· Cincinnati, Ohio

Hi all, Deano from Cincinnati here. I'm in the process of buying our first HUD home, signed the papers and paid a $500 deposit.

THEN the back door was kicked in and all the copper stolen. HUD did not secure the property for three days and who knows what else was damaged.

I've asked for my earnest money BACK and told them that I would like to place a new bid due to the well as some serious structural damage which my engineer uncovered.

They've refused; consider me in default of contract and are putting it back on the market next week. What should I do?

I'm new at this...and was only trying to save a great old house and our neighborhood. Deano

Real Estate Investor · Garland, Texas

Your experience with this is the same as mine. I had one under contract that got storm damage. They would not fix it or refund my $500 EMD, so I closed as the damage wasn't substantial.

You should walk and lose the $500 or close. If you walk, you might buy it in the next round, perhaps for thousands less.

Jon Klaus, SellPropertyFast
E-Mail: [email protected]
Telephone: 214-929-6545

· Cincinnati, Ohio

Thanks Jon....that's what I'm planning to do. Such bureaucracy...why can't I just call and offer $1000 less? Now, it will take a week to get it back on the market, another week for me to make my offer and several days after that for them to accept it...hopefully it will be accepted, there has not been very much interest.

Real Estate Investor · Garland, Texas

Anyone else bid on it before? How close to your bid? Your agent should be able to get you this info. If no one else was close, I might bid 70-75% of asking. I've gotten a few in that range. Also they should price it cheaper with the new damages.

Jon Klaus, SellPropertyFast
E-Mail: [email protected]
Telephone: 214-929-6545

SFR Investor · Wheat Ridge, Colorado

This is my understanding of HUD, too. If they accept your offer, the EM is theirs. You have to do inspections before the offer, not after. If you don't close, you will lose this earnest money.

If they put it back on the market, you'll have to make another offer with new earnest money.

Jon Holdman, Flying Phoenix LLC

Real Estate Investor · Sacramento, California

Make sure the listing agent has all the information about the structural damage, in writting, from your engineer. Make sure he includes something about the copper, as well. If the Realtor has reliable third party information on the property and it's defects, he/she are required to disclose to other interested parties. It may keep some from bidding, or others from over-bidding on the property. Then make sure your next offer is discounted by $500! Like Jon said, your inspection needs to be before the offer, but, don't let someone else over-bid (like you did the first time) if you still want the property.

· Cincinnati, Ohio

Yes, thanks guys. I originally offered 48,000; there was one other, significantly lower, offer. I'm planning on rebidding more in the 30,000 range. We are planning on turning the house into our primary residence, after renovations, in a year or so. Our neighborhood is one of Cincinnati's early suburbs...we are taking the risk that the area could severely "tank" but these houses are beautiful. My realtor is very responsive but this is her first HUD home also and I guess we're learning the hard way. I hope the government doesn't run healthcare like this!

Real Estate Investor · Garland, Texas

If you are bidding as an owner occupant (and you should be), your bid will be given preference over investor bids. As an investor I've lost out to OOs who bid $4K less than me.

Also, don't be too upset if you don't get this one. Better deals always come along if you keep looking and learning.

Jon Klaus, SellPropertyFast
E-Mail: [email protected]
Telephone: 214-929-6545

· Cincinnati, Ohio

Thanks guys, here's an update; HUD kept our earnest money despite the damage to the property and put the house back on the market for the same price ($55,000). We've rebid $35,000 and that's as high as I'm going. If I lose this bid, would it be worth taking HUD to Small Claims Court? Deano

SFR Investor · Wheat Ridge, Colorado

I don't think so. No doubt you signed a stack of papers along with the offering and one of those will protect them from any judgment. Around here, the lowest they will accept is 87% of their current listing price.

Jon Holdman, Flying Phoenix LLC

· Cincinnati, Ohio

[b]Well guys, after almost three months of haggling, I finally have a signed contract on the property that was vandalized...$35,000 down from $55,000...and hope to close the week after Christmas. It's a great house and after working on it all Winter and Spring, we hope to move into it ourselves, with new doors and a new kitchen and laundry room...and of course, new plumbing. I appreciate all of the advice...the big problem now is what to do with the old house which has been in my wife's family for 70 years (she wants to keep it...sigh).

Deano in Cincy[/img]

Real Estate Investor · Ellicott City, Maryland

I realize this is an old thread (though thanks for the update Deano and congrats!), but wanted to make a suggestion...

While I've never bought a HUD property and haven't read the HUD addenda, in a typical contract and standard REO addenda, a buyer has the right to back out (getting their EM back) or renegotiate if the property can not be delivered at closing in substantially the same condition it was in when it was put under binding contract.

In this case, it's easy to make a case that the property is not in substantially the same condition, and unless the HUD addenda address it specifically, I would think that you should be able to fight and get your EM back.

I also can't speak to the contracts and precedents in your state, but my state tends to be VERY buyer-friendly, and if a buyer wants his EM back for any reason, he can usually figure out a way to get it, even if the contract doesn't specifically support him (in others words, the brokers will generally side for the buyer, and it would cost a lot of money to fight it in court).

As an example, I had a property under contract with Fannie Mae for 8 months earlier this year. They just couldn't get clear title on it, but since it was a great deal (there were 19 bids the first day it went on the market), I kept signing the contract extensions waiting for it to go through. About two days before we finally were to get to closing, the house was vandalized. I asked Fannie Mae for a $3K credit to cover the damage (with my agent letting them know that we felt it was within our rights to back out if we so chose), and they happily gave it to me.

Just a thought if it happens again...

Small_lishproplogoJ Scott, Lish Properties, LLC
E-Mail: [email protected]
Telephone: 770-906-6358

· Cincinnati, Ohio

Thanks for the comments, J.

Well, the realtor never sent in the EM check the first, she has sent it this time. If HUD is either nice or stupid at this point, they will accept it for the sale and not require the old $500. Since I've gotten such a good deal on the house, I won't be too upset even if they do...but I won't rule out going to small claim's court either...especially if there is more damage before closing. Thanks much,


Real Estate Investor · North Carolina

Thanks for posting, Deano.

Next HUD I win a bid on I'll try installing a couple of those motion-sensor alarms inside. Might not work but it's cheap insurance until I close and can properly secure the place.

Real Estate Investor · Grand Blanc, Michigan

I do a lot of HUD transactions (both as a Realtor and for my personal investing). The one thing I noticed missing is that after the bid has been accepted and you have a ratified contract you can complete the inspection (assuming you requested one). If the property has been damaged when you do inspection you have a right to rescind the contract and request the EMD refund. If you're agent is green, engage the help of his/her broker. It's very common procedure and 9 times out of 10, I see the EMD refunded if the reason for backing out of the contract is truly because the property did not pass inspection.

· Cincinnati, Ohio

Thanks Guys; I am having the power turned on tomorrow and am doing the sensor lights thing...before closing. Well, HUD refused to let me back out of the contract, even after the property was damaged...but then it was relisted and they have not asked for a second deposit or EM. So we'll see. Deano

Mark Y, when you do a HUD transaction as a qualified HUD broker/realtor, how do the agent commissions work? Arent they typically 5%-wow that be great if it was paid to you at closing on your own HUD deals.

Real Estate Investor · Grand Blanc, Michigan

Johnny, yes the commission on HUD deals is 5%, minimum of $500. For the deals I've been buying, I've been waiving the commissions since the net to HUD is greater. HUD simply looks at what they're netting from the offer.

Real Estate Investor · Springfield, Missouri

Hi, the original issue is clearly one where the contract can be voided, or modified. The question is- who has care, custody and control of the property at the time. If any seller, including the federal government, has the obligation to keep the property in good condition to closing, if they fail, you have recourse. They and you may put it off to the listing agent who may have that responsibility and this is an insured event. Look to the contract, it should have provisions for the buyer to accept loss proceeds or avoid the contract and be entitled to the EM. It has nothing to do with inspections or due diligence if you can show the damage occured after the fact. Since damage is so common with foreclosures the fact that you can show occured after your inspection and on their watch, you can point that out. Also, alot of comments about small claims court. In my state and probably many, small claims may be used for LL disputess, but default in a real estate purchase contract is a civil matter that is not addressed in small claims court, check in your state. Bill

Financexaminer@real estate investor dot com

· Cincinnati, Ohio

If any of you guys would like to read my blog about the HUD home which we have purchased, here is the link: Thanks!!


Sign up