Everyone who wants to buy a home wants to get a good deal. This can often be accomplished by looking at HUD-owned homes. There are many HUD homes for sale in Georgia.
What is a HUD home?
- HUD homes are properties that were insured by FHA (the Federal Housing Administration) and the owner could no longer make payments on the property (due to medical issues, job loss or other factors).
- The lender can file a claim with FHA for the balance due on the mortgage and then conveys title to HUD.
- HUD homes are one to four unit residences and are found in nearly every county in Georgia.
POINT ONE: In order to purchase a HUD home in Georgia, investors or owner-occupant buyers must work with a HUD-registered real estate agent. However, buyers may search the database of homes available with HUD by going to their website. A HUD-registered agent is required to make an offer in Georgia. Each home has a list price and an as-is price. The as-is price is the value shown by the FHA appraiser. The list price is the price that HUD is asking for the property. Sometimes these two prices are the same, but many times the home is listed at less than its current appraised value.
POINT TWO: In Georgia, a HUD registered agent will show you the property, assist you in coming up with a good offer and submit the offer through the online HUD bidding system. Offers are not made on the traditional Georgia contract, but rather on the HUD electronic bidding system. The contract is a basic one page form, but how your offer is structured makes a big difference in whether it is accepted or not.
POINT THREE: All HUD homes are sold as is in Georgia, but HUD does recommend that buyers get an independent home inspection done before purchasing any property. Most of the time, HUD will not make any repairs to the home, so you should take any required repairs into consideration before making an offer. This way, you can factor these items into your offer price. Always get a home inspection!
POINT FOUR: Most HUD closings happen within 45-60 days of the contract being accepted. HUD gives a priority to owner-occupant buyers, however there are many HUD homes that are available for investor buyers as well.
POINT FIVE: For an owner-occupant buyer who is obtaining FHA financing, there is a special program available currently (2009) allowing the buyer to put down only $100. Since there are no longer “zero down” mortgages available, putting only $100 down is the next best thing. There are also special programs for buyers who are teachers, firemen and policemen. Georgia buyers have a lot of great options when purchasing a HUD home!
POINT SIX: Some properties may need work done to them to be insurable for FHA financing, and sometimes HUD offers an escrow account to complete these repairs after closing. HUD typically provides a 15-25 page Property Conditions Report to the buyer which outlines the condition of the property as determined by an inspector hired by HUD’s 3rd party vendor in Atlanta (currently PEMCO).
The process of buying a HUD home is a very streamlined process that can be completed without a lot of hassles. It is essential to work with an experienced Georgia HUD registered agent who understands how the process works and can meet the required deadlines.