A Guide to Buying HUD foreclosures in Raleigh
Not all the homes that are involved in foreclosures in Raleigh are being foreclosed upon by banks. There are a number of homes that are being foreclosed upon by different government agencies. And since these homes sell quite cheaply, many home buyers look at them as profitable ventures.
The one way in which both government foreclosed homes and bank foreclosures are the same is that both these sets of homes are sold to recover previously incurred losses. You should, however, take the time to study the different buying procedures of each process separately.
Homes that are foreclosed upon by government agencies are foreclosed in lieu of unpaid fines or/and unpaid taxes. Upon foreclosure, the deed/title of the home is transferred to the Department of Housing and Urban Development to sell as HUD foreclosures.
Homes which were bought using loans with FHA insurance can also be sold as HUD foreclosures. This happens in situations when the lender files for the FHA to pay the money that the home owner owes on the mortgage, and upon receipt of this money, transfers the title of the property to FHA. FHA, in turn, transfers the home to the Department of Housing and Urban Development.
Since the Department of Housing and Urban Development does not do much in terms of maintaining the property, you should expect the home to be in some state of neglect.
HUD foreclosures are sold through a bidding process wherein you would need to place a sealed bid on the home through an HUD approved realtor. HUD approved realtors are not hard to find. Lists are available on the internet or you could alternatively make a few phone calls.
Not only will the agent place the bid for you, you can also make use of the agent’s expertise and get a better understanding of the process. Also, you can also take agent’s help in locating HUD foreclosures for sale.
You must remind the agent to insert a clause in the contract papers which will enable the Department of Housing and Urban Development to pay the agent’s fee. As far as this finds a mention in the contract, the Department of Housing and Urban Development is known to pay up to 6% as agent’s fees.
Inspecting HUD foreclosure homes is very important. This will give you a clear picture of how much the house is actually worth.
Once you have placed the bid, your agent is informed if the winning bid is yours. You are then given a fixed amount of time in which the deal has to fall through. If, for any reason, you are unable to follow the deal through, the deposit that you would have previously laid down would be lost.
Therefore, it is important that you be certain about how the process works before you make your bid. Remember, researching the process will be time well spent.
