HUD Home Issues: Help please.

3 Replies

My husband and I are looking at purchasing a HUD home. The Property report HUD has done states that the Electrical Wiring and plumbing are damaged. In the notes section, it states "Generator and 220 Receptacle" above that it says " Physical exam. No 220 for generator" for the electrical wiring and for plumbing it states "Compressor 35 psi for 10+ mins." Just trying to get an idea of what we kind of problems are looking at before we get into a contract. If anyone that has experience with this could help or give us an idea, it would be greatly appreciated! Thanks so much!

If electrical wiring and plumbing are damaged, worst-case scenario you are looking at all copper wiring and copper water lines being stolen. So you would need a full rewire and repipe. On the plumbing, did it say if the test held or failed? When it says "Compressor 35 psi for 10+ mins" that sounds like they did an air pressure test on the water lines and usually means the lines are present to perform the test. No guarantees though. For the Electrical, it sounds like they tried to hook up a generator to test the house but were unable, possibly due to missing/damaged wiring or outlets. 

This is all a guess based on houses I have seen though. If the house has been vandalized and copper stolen, you are also looking at an extensive amount of sheetrock damage, usually doors, possibly broken windows, damaged plumbing fixtures, and damaged HVAC systems. All worst-case possibilities which is what I plan for so that I am not caught off-guard. Hope this helps.

The HUD FSM(Field Service Manager) does an inspection without the utilities on. They test the electrical with a generator and the plumbing with a air compressor. The results could cost $4 to fix or $4000 and I take them with a grain of salt

Keep in mind that an investor will forfeit their EM on a HUD purchase is they back out. However, the EM is only $500-$1500 based on the sales price

Had similar issues on our O/O HUD house. We couldn't even test the plumbing. We budgeted for worst case scenario - as is wise to do with a foreclosure that has been unloved and unoccupied - and planned on replacing ALL of the plumbing.

2.5 years later, we've replaced just about all of it. Glad we guessed a high number up front. It was still worth it. Honestly I'd rather have it fixed up front so I know it's been done well - HUD houses are often uncared for even when they were owned (think about it - if you're about to foreclose, do you have the money to upkeep infrastructure?).

If I were you, I would simply budget based on needing to replace all of it.  

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