Will HUD make repairs or walk on deal?

Question

I have a pending deal with hud on a sfh. My inspector went to do the inspection today but the house was never dewinterize and when he went to turn the water on it started gushing out from the wall between the utility room and kitchen. My agent (who is not that familiar with HUD) said HUD will never make repairs.

However, the first house I ever bought failed the city's pos and HUD ended up splitting the repair with me which was a $5k credit at closing. I know I've always been told they are as is, no repairs but I've personally seem otherwise.

I'm curious what other people's experience and opinion is? I really don't want to walk on the deal but without it being my house I can't even get behind the walls to know the extent of the pipe damage.

Any suggestions would be appreciated?

Greg H. · Answer

@Carrie Giordano

@Linda Weygant

After doing several hundred HUD transactions, I have never seen or even heard of HUD paying or doing any repairs unless it was damage or vandalism AFTER the contract had been ratified by HUD.  In those situations, HUD offered a small credit or the option to terminate and get back the earnest money

Carrie- Are you sure the other transaction was a HUD ?

Mary Lehner · Answer

If your an owner occupant ! And  and you have a contract the contract states the property shall have all of the same things inside of it as it did when you went into contract! I mean how is this even ethical ! And HUD would work with you of HUD was actually the ones running HUD ! But they don’t run it they contract it out to a management company who makes millions of dollars ! And they probably don’t Even know what the property even looks like !

Mary Lehner · Answer

Nope ! I have been in contract for 3 long months even paid 550 for appraisal! The we see the entire kitchen was stolen head to toe ! Even the ugly light ! The Sage acquisition company said they do not care ! This isn’t even the same property I bid on ! Broken windows all of them no kitchen ! Not even the sink ! All gone and now they said they will just put back on the market ! Why after 3 months I was ready to close

Mark Ferguson · Answer

People try, but HUD won't fix them or lower the price. We try to educate other agents as much as possible so they know that upfront.

Carrie Giordano · Answer

@Mark  Ferguson I think on the original HUD property I purchased it must have been similiar to your final #3 scenario. It was 2013, the city still had multiple fireclosures and they knew the house wouldn't sell having failed the city's dye test. So they did credit me the $5k.

Mark - being a hud broker, do you often have many unexpected issue come up on inspections that people ask hud to repair or credit?

Mark Ferguson · Answer

I am a HUD listing broker and there are only a couple of cases where HUD will ever make repairs or offer a credit or reduction.

1. when the house is vandalized or damaged after a contract is signed. Usually the credit is very small and only for major items like stolen pipes.

2. When there is a safety issue, not habitability issue. Safety means broken glass, house not secured, leaking roof that could cause more damage. Mold, broken pipes, holes in walls, etc are not safety issues.

3. One time a small town charged $5,000 to get the water turned on, because it had been off for over a year. It was a struggle but HUD ended up paying the $5,000 because they knew they could never sell it otherwise.

They have never fixed pipes, not matter how minor the issue.

Patrick L. · Answer

@Carrie Giordano Investors are supposed to do all of their due diligence prior to making an offer so your options are going to be walk and let them keep the EMD or close on the deal and take it as is.  I've bought more than 20 houses from HUD in the last 7 years and I've never had them make repairs or give a repair credit.  Once they returned my EMD when the house was broken into and stripped of all copper and they refused to give me a any type of credit.

Carrie Giordano · Answer

@Patrick L. I am buying as an investor but that's the same way I bought the first hud home. I am thinking that because I would lose my em that I will probably go ahead with the deal even if they don't fix the burst pipe. It's just hard when I really don't know the extent of the damage.

Patrick L. · Answer

Are you buying as an owner occupant or investor?  If you're an investor you're out of luck and they'll keep your EMD if you back out.

Carrie Giordano · Answer

@Greg  H. yes I am 100% positive. The home failed the city's sewer dye test after my bid was accepted but before my home inspection.

Will HUD make repairs or walk on deal?

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