I am a licensed agent, can I buy HUD Properties?

Question

This is a subject where everyone has a different answer when I ask them, so i am asking the best community I know when it comes to problem solving! I started my licensed real estate journey at a brokerage that was a HUD licensed brokerage.  I was told that I personally could not purchase HUD at that time.  Fine, I get that.  I have since moved on from that brokerage and have hung my license at a brokerage that is not a HUD licensed brokerage.  However, there are agents who are selling HUD properties (not purchasing for buyers, but listing for the bank).  Am I still in a situation where I cannot purchase HUD homes?  Or am I in the clear and I can start to fire away?  Any thoughts would be great.  Thank you in advance!

Chris DeMorais · Answer

That makes sense. I will have to talk to my broker about his opinion.  Have you ever experienced or heard of any push back from Brokers when approached by an agent that wants to purchase HUD properties themselves?

Greg H. · Answer

You are correct that purchasing within the LLC does not help you as HUD requires a copy of your LLC docs so if you have any interest in the LLC you will not be paid a commission.  If your partner is independent, of course that is acceptable

Again, depending on your agreement with your broker, you can just back out the commission.  For example, if the property is listed at $100,000, My bid of $97000 is the equivalent of a $100,000 bid so nothing is lost

Chris DeMorais · Answer

Thanks for the response Greg. That is great to hear! I am guessing even if bought the properties through an LLC I am a partner in, I would not be able to take a commission correct? What if my partner was the one to technically purchase the HUD property, could I receive a commission?

Greg H. · Answer

You absolutely can purchase HUD homes as an agent as I have purchased 500+.  The only disqualifier is if you work for a HUD listing Broker

As of now, HUD will not pay a commission to an Agent who is also a Principal in the transaction.  This rule has changed several times over the last couple of decades.  You can however reduce the net to HUD to reflect the commission provided your agreement with your Broker allows it