HUD homes are sold in an as-is condition. The price is based on an appraisal and fair market value. Need repairs are subtracted off the price. The new buyer is responsible for the repairs.

After finding a HUD home of interest, only a HUD-approved real estate office can show the property. If a potential buyer finds a home of interest, a home inspection is recommended before an offer is made. The inspection will determine the needed repairs and will help the buyer with a picture of the home’s value. This should be considered before making an offer. Other considerations should be lead based paint contained in homes built before 1978. Also consider other hazards in the environmental realm such as asbestos.

Before making an offer, make sure financing is in order. If your bid is accepted and financing falls through, you could lose your deposit. A deposit called Ernest money must be submitted with offer.

There is an opportunity to bid on the home that is called the Offer period. During that offer process one can made a sealed bid on the home. Buyers that will occupy the home are considered during this time.

At the end of the offer process, all offers are opened to view. Investors are then allowed to bid on the house if there are no owner occupants that have placed a bid.

HUD as a general rule accepts the highest bid. If the home is unsold after this period, bids are opened as they are received. As your bid is accepted, your agent will let you know within a few days. You will be given a date to close 30-60 days later. The real estate company can earn a commission up to six percent.

After six months of bidding opportunity and no offers, the home can go to a specified agency for the cost of one dollar. The purpose of these homes would be to the benefit for families in need and specific approved neighborhoods.