Purchasing From the HUD Home Store

I recently purchased an investment property From HUD, through hudhomestore.com. This was the first time I have purchased one from HUD but I have represented many buyers on purchases, and during the last market downturn also acted as a HUD listing agent. I know the process pretty well but was surprised by a few things along the way that I wanted to share.

The home was vacant and needed a lot of repair, which is very typical of these homes. There had been several contracts on it already that had fallen through. All of those contracts were owner occupants that needed to get a traditional mortgage on the home. With the condition of the property, that wasn’t ever going to happen. One thing I learned as a listing agent and as a buyer is that HUD will accept contracts with most loan types, even if there is little or no chance of the contracts making it to closing. This tells me there isn’t anyone on the HUD side making these types of common sense decisions. The property has a large porch that was partially falling down, and no running water, or working heat system so there was no possible way for a traditional mortgage to get through appraisal.

The previous contract fell through, and the property was relisted as active. I made my offer which was pretty close to listing price. During the overnight auction I lost the bid to another offer. I elected to keep my offer in as a backup offer. This is very important to do, and I always recommend doing it with Hudhomestore. If you stay in as a backup offer, and the contract gets released they will notify you first, if something has changed and you don’t want the property any longer, you can elect not to move forward. In essence you have nothing to lose staying in as a back u offer. In this situation it was under contract for a few weeks and I received notification that the contract was getting released and I had the option as a back up to resubmit and would most likely get the contract. I resubmitted and got accepted the following day!

Once we got a verbal acceptance it took a few business days to receive the contract to sign. This is done through Docusign, as an electronic signature. Very quick and easy, and a huge improvement over the previous process that they used. Once we received the ratified contract, we were given a strict timeline in order to process and close. In my situation it was a cash purchase with no additional inspections so it was an easy process. If you are working with inspections and a lender, you want to be able to move quickly to stay within the guidelines of the contract.

It is also important to know for any agents that you can represent yourself, but they do not pay commission to an agent buying for themselves. You can make the decision to represent yourself or have another agent assist.

The process was good overall but be prepared to wait for their side to react, and then rush to stay within their guidelines on your side. Make sure that the loan type will work with the condition of the property, and do all your due diligence early in the process. Hope this helps with anyone considering a Hudhomestore purchase!