forcloser house bought at a real cheap price

8 Replies

I just bought my first forclosure house my intentions where to fix it n live in it but had changed my mind how can I change the paper work so I can sell it in less than a year...

Help new on this 

@Luis Ramirez change what paperwork? Was this bought with some loan that requires you to live there a year? Because if you just bought a house for cash, or even most conventional loans, you can turn around and sell it the next day. Or, was there something in the deed that restricted you from reselling it for some period of time? That is sometimes put into short sale or REO purchases?

I bought it thinking on living in it so when I was asked if I was buying it to live in it or as an investor I said living in it. But now I had change my mind because the house is to big for me on the contract was a couple of quotes that contradicted itself

One it said I could not sell it in less than 90 days for more than what I bought it for but I could sell it after that period 

Then the other said since I was buying it to live in it I had to wait a year before selling it otherwise I would have to pay $10, 000 to the seller if I was to sell it in less than a year.

By the way the house had a HUD quote

I'm new at real state and don't want to make a mistake that will cost me $10, 000

@Jon Holdman   

I already signed the contract should be getting the deed this following week

HUD settlement Statement**

hi

Sounds like you bought a Fannie Mae home...

You can't sell it. Its a deed restriction. Thats why there is an option owner or investor.

For investor they restrict the price you can sell at x days too. 

And I also heard that they do chk if you reside there and will fine you $10,000 if you didn't.

Who's the seller? Individual? Bank? HUD?

Lets get clear on some terminology, because I'm having a hard time understanding what you're saying. HUD stands for Housing and Urban Development. http://portal.hud.gov/hudportal/HUD

They are a federal government agency. They do sell houses they have taken back from borrowers who default. They offer those houses first to people who plan to live in them. Then, if there are no owner occupant offers, they offer them to investors. Are you buying a HUD house? If so, did you make this offer during the owner occupied bidding period? If so, move in. End of story.

There is also a "HUD-1 settlement statement". Its a standard document used at closing. When you buy a property, you first write a contract with the seller to buy the house. Often called a "purchase and sale agreement", but might have a different name. Then, anywhere from a few days to a few months later you will "close" on the property. At the "closing" you will sign a big pile of documents. The seller does, too. Sometimes you're all together in a room at an attorney's office or title company. Sometimes the buyer and seller do this separately. I've done it both ways.

One of those documents is a deed.  The deed is given to the buyer (usually called "grantee" on the deed) by the seller (usually called "grantor").  You will get a piece of paper, but, that's really irrelevant.  What matters is a copy of the deed goes to the county and gets recorded.  That's the step that makes this all legitimate.  So, when you say you're "getting the deed the following week", I assume you mean you have the closing next week.

The purchase and sale contract will outline the terms of the purchase. If you're buying from HUD, or a bank owned (i.e., "REO") property from a bank, or this was a short sale, there are often additional terms that aren't used in a typically transaction when one individual is selling a property to another individual. That's why I ask "who's the seller". Short sales, HUDs and REOs may all impose restrictions on re-selling the house. HUD will impose restrictions on occupying the house, too. Short sales and REOs don't usually impose occupancy restrictions, but may impose re-sale restrictions.

Sometimes, sellers put restrictions into the deed, too.  These will cause you problems if, for example, there is a 90 day resale restriction and you try to sell before that.   When you buyer tries to close, their title company or attorney will find those restrictions and will refuse to complete the closing.  That's because you are unable to provide a "clear title" because of those restrictions.

Now, perhaps you mean that occupancy statement is in the loan you're getting to purchase the property.  Lenders most definitely care if you're going to occupy the house or not.  The rates on loans for a property you occupy are usually at a lower rate and have lower down payments than for an investment property.  If you buy a property, claim you're going to live there and get an owner occupant loan, but don't move in, you're committing loan fraud.  Usually somewhere in that stack of papers is a document from the lender where you say whether or not you intend to occupy the property.

So, what's going on here?

If you don't understand these documents, you really should find an attorney in your area and let them review the documents.  I can't see them (no, please don't try to e-mail them to me.)  A local attorney can, and can explain what you've gotten yourself into.

thank you @Jon Holdman for taking your time to clear my doubts. Its a HUD-1 settlement and the property was paid in cash and I bought it when it was already offered to the investors but they gave me the option to choose weather I was buying it as an investors or to live in it n I said to live in it but it will take me a good while to get it fix since I spent all my money on buying it and I am going to fix it myself I now wanted to sell it instead.

But if there's no turn back ill just fix it and live in it for a year n sell it after the year.

thank you @Jennifer

@Jennifer Lee  ill just do as I signed so I won't get on any trouble specially that I am new on this. I don't want to end up paying extra $10, 000 

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