Many people, especially first-time home buyers, prefer FHA-insured loans because of its relatively low-cost. This mortgage loan is insured or secured by the government, when the property owner fails to make mortgage payments on the property; FHA takes the property to a foreclosure to recover the loan. The government may also seize the homeowner's real estate to cover the bill if a citizen fails to pay his taxes. HUD homes are available for public; anyone with enough money can purchase these homes via HUD real estate agents or bid on the property at auction. Let's take a look of the pros and cons of buying government-owned properties and learn how to find and buy HUD homes.
The pros and cons of buying HUD properties
One of the big benefits of purchasing HUD homes is that you may qualify for FHA financing. Special interest rates for loans are available for homeowners who buying run-down properties. However, HUD properties are often sold at market or slightly below market value. They're also rarely located in ritziest neighbourhoods. Furthermore, HUD homes are like any other homes sold in the auction, professional inspection is required to investigate any potential damages to the property before you make your offer. That means looking for a right property, you may need to spend much more time and make more effort than you do in other real estate investments.
Find HUD opportunities via agents or online
The government will often list the properties with HUD-approved real estate agents. A real estate agent that specializes in HUD homes provide you with all the information available for the property. Finding a real estate agent, not only you can save time for researching the home, you also getting useful advice from the real estate agent's expertise. Another resource of finding HUD homes is online listings. The U.S. Department of Housing and Urban Development lists information of HUD homes on their office website. A complete description of the property along with a photo and links to additional information are available online. You can find the contact information for the HUD-registered broker if you want to make an offer.
The bottom line
HUD opportunities are equally available to everyone if you follow the instructions above. If someone tries to sell you some HUD homes and claims that he has more information to help you to make a best deal, you may need to consider if that extra information really matters and is well worth the additional consultancy fee.