Louisville, KY · Member since 2016 · 14 posts · 1 vote
When offering on a HUD home, what contingency in the contract would get the deposit back should the closing not happen?
Also, when a house gets sold at a tax auction and there is an overage, is it correct to say the former owner has 3 years to collect it? When the required time has passed, if there is a time, what is the way we, as investors, can help that former owner get the money they are owed?
As to tax overages, this is state dependent. You need to know the law for the jurisdiction you want to work in. It is not always 3 years. For example, in Texas the right to claim the overage expires in 2 years and you must be an attorney to help someone recover it.
Earnest money is no no refundable on investor purchases from HUD if you fail to close. The few circumstances where it would be returned would be for Title issues or damage to the property after your contract was ratified. Your cannot modify a HUD contract in any way
Typically in most HUD contracts the earnest money is not refundable.
Typically you cannot change their contracts.
Why would it not close?
Overages....depends on the jurisdiction. Some have 30-60 days to recover, some longer.
You need to check either the laws of the state you are buying, or perhaps as an alternative you can check with either the appraisal district, the tax district, or the attorney representing the tax authority where you plan to live. Most of these people I have found to be helpful, friendly, and giving good advice you might not otherwise know. Sometimes they can be wrong or not follow the law as written, but generally helpful.
@Micah Harris Most states will be within 1 year for an owner to collect on overages. After that they go to the state or county depending on the state needs. In Texas the owner must file their petition before the second anniversary of the date of the sale of the property and they are divvied according to all that is owed ie: all outstanding legal debts in the order they occurred. Everything in Texas is done through law firms, including the redemption deed sales.