Are Foreclosures A Good Deal [Be Careful] #5

Pamela Madore
Keller Williams Realty
806-290-1920
Are Foreclosures A Good Deal?
Many people think that a foreclosure is a great deal.  That may or may not be true.
Recently, there was a really good house in the Tradewinds.  My client and I overbid.  We were a cash buyer.  We got the bid and closed in 8 days.  Later I found out that there were 4 bids behind us.
When HUD puts a foreclosure up for sale they have several levels of timeframes that you can place your bid.  The first one is a lottery.  This one is for government agencies and other silly things.

Note: Property available when this article was published. 

The next level is for owner occupied bids.  I have seen this window of opportunity be 10 days or
more.  During this time you can put in a bid but the bids won’t be opened until after the opportunity ends.  To be clear, you could put in a bid the first day the property comes on the market but it will be 10 days or so before you know if you got the bid.
If no one gets their bid accepted during that time then it is open to the public specifically meaning investors.
What is a bid?  A bid is really nothing more than an offer.  For some reason the government decided to call it a bid.  I am a Registered HUD bid agent and can place your bid for your.  Very little information is needed to put in the bid but if it is accepted we have 48 hours to Fed Ex all of the documents they require, which is their contract, an approval letter from your bank and a copy of the escrow check.
What is an escrow check?  This is the amount of money that HUD requires you to put at the title company that will be used toward your down payment and closing costs.  If the property is less than $50,000 is it $500 and if over $50,000 it is generally $1000.
What about inspections?  Those can sometimes we tricky.  HUD leaves all of their houses with the utilities shut off.  If you want to do inspections, we have to get written permission and you have 48 hours to turn on and pay for  the utilities, have the inspection done and turn the utilities off again.  One thing to remember about this is that HUD always “winterizes” their properties. That means that they drain all of the pipes of water.  If they find a leak — the most common is around the washer house–they will not let you turn on the utilities.
Sometimes foreclosures are good deals.  But sometimes the unknowns outweigh what you think you are getting.  Often times during the time the property is put on the market to the time it closes people break in and do damage.  The most common is to steal the air condition unit.  The problem with that is that HUD will fix nothing and will most often not adjust the price.
You will need someone that is very familiar with HUD foreclosures to be protected throughout this process..   I do many HUD foreclosure properties and will do my best to see that you are protected and get exactly what you want.
Call me for questions and find out what is available right now.  Their availability changes daily.

 

Pamela Madore
Keller Williams Realty
3955 S. Soncy
Amarillo, TX 79119
806-290-1920

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