Pros and cons to buying a HUD home
HUD homes provide an excellent, nontraditional method of purchasing homes for a lower price, and for many homebuyers, especially first-time buyers, this is an excellent option. However, there are some things you should know about buying a HUD home before pulling the trigger. Not all issues are bad but they are things to be aware of. We will discuss the pros and cons to buying a HUD home.
The pros usually outweigh the cons. First up, there are several HUD homes available in most areas around the Columbus real estate market. Buyers usually find it easy to locate a property that they really like and with the affordability and use of purchasing this type of home, a HUD home makes a viable option.
You can easily find HUD foreclosures in most cities.
If you already have a specific area or neighborhood in mind there's a good chance that a HUD foreclosure home may be in that area and may also be in good condition.
HUD homes may have money in escrow.
It's a little bit unusual but a home could come with money in escrow making repairs and replacements easy. They may also be eligible for specific programs that offer funding to rehabilitate HUD homes or properties.
HUD homes prefer owner occupancy
Owner occupant homebuyers typically have priority over investors.. This rarely happens when bidding for typical foreclosure or short sale homes. HUD is looking for reputable homebuyers and providing them an affordable way to purchase these inexpensive homes where it may be difficult the room bids against investors to pay and all-cash for other types of homes.
Assistance with closing costs and escrow fees.
Help is readily available to purchase HUD homes and HUD may pay up to 3% of the closing cost for particular buyers. However, this must be negotiated in the bid for the home. HUD may also pay the escrow fee, which can save up to $900 to pending on the situation. This is an excellent option for low income and mid income homebuyers may not be able to afford to purchase or down payment.
Not all of these are disadvantages but they are issues to be aware of.
Not every HUD home is a great deal.
Some homes may seriously be priced out of most homebuyers affordability range. This is typically due to poor pricing on the agents part. Before deciding to purchase one of these HUD foreclosures make sure your buyers agent conducts their due diligence and find out if the home is actually a good deal.
Most homes are sold "as is"
Most HUD foreclosure homes are purchased as is as we stated above, there may be money in escrow to facilitate some repairs. You can always ask and negotiate but most homes are sold as is.
Vacant homes could have more problems
The longer a home sits on the market can compound damage and issues. If the home has a small leak, it could create mold or damage to the home if left unattended for a long period of time. It's important to know how long the house has been vacant and on the market. You need to know everything about the property and have it properly inspected to ensure you know what you're getting into when you purchase the property.
HUD homes make great homes but it's important to know the advantages and disadvantages to owning a property. Having a great HUD approved real estate agent is really one of the best ways to find and purchase the right home for your needs and your budget. As a HUD approved agent I can provide you with all HUD approved homes in your specific area or help you locate the home that offers all your needs at a great deal. I look forward to talking to you soon about your next HUD purchase.