- Get a real estate agent. A licensed real estate agent can help you navigate through the process of visiting and purchasing a HUD Home. The agent’s broker must have an NAID! NAID registration for a real estate broker permits an agent of the broker to make a bid on a HUD Home.
- If you have bought a HUD Home in the previous two years as an Owner Occupant, you are NOT eligible to purchase another home. After purchasing a HUD property as an owner, you must wait two years before purchasing another. HUD gives first dibs on their homes to those who plan on living in a property; the two year policy deters investors who purchase during the initial 10 day period earmarked for owner purchasers only by claiming to be an owner from purchasing another property.
- Owner occupants automatically have a ten day period to conduct a home inspection on the property. Because this is automatic, buyers do not need to worry about the competitiveness of their bids when feeling they need a home inspection contingency!
- HUD will provide a Property Condition Report (with every property they put on the market. Every issue that is known about the property is disclosed up front. There is no need to worry about hidden damages that are not being disclosed by the seller. Of course, it’s always possible that damages are more extensive but this is why you always conduct a home inspection. The PCR will
Whether you are a first time homebuyer or a seasoned vet in the world of real estate, everyone who delves into the murky waters of buying or selling a home should start the process with doing a little research.
Laws change. Markets change. New programs are added. Old programs expire. Existing programs change.
For every buyer that approached us, seasoned or not, I recommend that they go to https://www.hud.gov/ before they start the process. I respond to all questions to the best of my ability but also send out the resource for my answer. For most questions, the answers can be found on the link above. On the top bar of the website is the tab “Audiences”…if you click there, most will go to the homebuyer or homeowner tabs…each contains a wealth of information.
But that certainly leaves out numerous people who are in need of answers to your questions. The audience groups for reference are appraisers, housing counselors, inspectors, landords, lenders, nonprofits, Real Estate Brokers, and Renters. This page can be found here or navigate through the home page above.
Although I recommend visiting this site to everyone, it is without question, the best resource for the first time home buyer. Knowing the steps of buying a home can make the process more efficient and less stressful. This is a one stop shop for just about everything you need to know. Everyone has their experiences and opinions but they can range from “it’s a nightmare” to “piece of cake”; your experience will more than likely be somewhere in the middle.
Take your time. Do your research.
Below is directly from the HUD Homestore website and will answer some of the more common questions we get regarding purchasing HUD Homes. Call us with any questions or set up an individual appointment to receive a presentation on purchasing HUD Homes. 540-628-2226.
- To search for all the HUD properties in a state, click a state on the U.S. map (in the HUD Homes screen) or use the Search Properties area and select a state before clicking the Search button.
You can type in part of a street address, or part of any of the other text fields. You can also search by price range, number of bedrooms or bathrooms, buyer type, or property status. The system will select all properties that contain the letters or numbers that you typed in.
TIP: Less is more. The less you type in, the more homes will display as a result.
- Owner-occupants are not eligible if they purchased a HUD property as owner-occupants in the past two (2) years.
- You cannot put in an offer on a HUD Home by yourself. You must use a Selling Broker who is licensed to sell HUD Homes to represent you (or a Selling Agent who works under that Broker), or you can go through the HUD-Registered Listing Broker for the home. Either way, the Broker/Agent must be registered on HUD Homestore to place the offer.
- Effectively immediately: Properties over $250,000.00 will require $2000 EMD. Call if there are any questions or issues.
- Buyer’s agent will receive only ONE e-email instead of two in order to initiate the e-signature process. This will streamline the process towards getting a ratified contract.
Interested in learning the process for purchasing HUD homes either as an agent or a buyer? Call us at 540-628-2226 to set up an individual presentation on how to buy! Agents, brokers, and buyers welcome!
- Reconcile what you want with what you can afford!
- Find a good Lender! Most importantly, SHOP AROUND!
- Educate yourself on various homebuying programs and ask the lender about them!
- Understand your RIGHTS as a Home Buyer!
- Go to the links above to start.
- Talk to a Real Estate Agent!
- Shop for a home!
- Use a Real Estate Agent. They have access to all of the right tools and access to properties!
- Use the internet to narrow down what you are looking for…send to your agent!
- Start at www.hudhomestore.com to see what HUD properties are available in your area. This is a shameless plug, I know…but the folks at Sage/HUD make it a priority to help homebuyers purchase a home they love and can be proud of…
- Find the house you want and make an offer!
- Always make an offer at an amount comfortable to you. Don’t get hung up on what the seller originally paid for the house. Markets change!
- Consult your real estate agent about what is reasonable in the current market conditions.
- Take sound advice from the Corleones: “It’s not personal, strictly business”. Although buying your home is an important personal decision, remember it is personal on the other end of the transaction as well. Don’t be offended by decisions made on the other side; they’re doing what they think is the best for themselves as well!
- Offer Accepted! Contract Ratified! DO A HOME INSPECTION!
- Recommend getting a professional Home Inspector. We’ll do another blog on what you can expect from a good one.
- Negotiate with the seller regarding required repairs noted in the home inspection.
- Make yourself available during the inspection to walk through the inspector. Use that inspection to know your home inside and out.
- Home Owners Insurance. Title Insurance.
- Home Owners Insurance: Protect yourself. Do not cheap out on this. Most of the time, this will be required by the lender.
- Title Insurance: Talk to your closing agent about the importance. Listen to their horror stories. Again, protect yourself.
- Sign the papers and close!
- Take your time, READ the contract, and ask questions!
- This is where picking your closing agent is so important. Listed and Learn!
During 2017, the process of purchasing HUD properties has undergone several changes for the better. It is now easier and more efficient than ever to buy HUD properties. Some of these properties are in good condition, some in poor condition but what you see is what you get! There are and never have been any secrets to these properties and all known information is shared.
Good reasons to purchase HUD that haven’t changed are as follows: 1) Owner occupant buyers always get a first crack at the apple for 10 days. The goal of HUD is to get owners into the house so a distinct advantage is given to these buyers over investors; 2) All HUD inventory can be found conveniently at www.hudhomestore.com where agents and buyers alike can browse; 3) All owner occupants will get 10 days to conduct a thorough home inspection after the contract is ratified. This is not a competing stipulation to the contract; 4) Prompt response to offers. After the exclusive period, bidders will receive a response the next business day. During the exclusive period, a running clock is located on the hudhomestore site for the property. No guessing as to when a response will be give; 5) HUD will give you their minimum net value for the property in the event your bid is low; 6) Automatic 45 days to close for financed offers (60 for 203K loans) and 30 days for cash. Again, not a competing stipulation to the contract.
Lastly, the hudhomestore site is a one stop shop for all information needed to purchase a home, HUD or not. On this site, you can find qualified real estate agents, closing agents, etc as well as follow links to learn what to look for when buying properties. So what’s new in 2018?
Well, we can’t say this is new to Virginia because it has been around since this past summer. But 2018 will be the first full year to use the new process. What does that mean for the buyer or agent? 1) No printing, signing, and snail mailing contracts; 2) No running around to the broker, title company, and buyer to complete their portion of the contract; 3) No missed initials that require corrections to be forwarded and, thus, delays in ratification; 4) Quick, efficient, and seamless ratification of contracts.
To watch a video and other instructions on the new e-signature process or for any other questions regarding purchasing HUD properties, got the the HUD HOMESTORE HELP page! Link provided. Happy house hunting!
Pasted directly from www.hudhomestore.com FAQ. To find answers to any question regarding the purchase of HUD Homes, go directly to the page here!
HUD has identified five buyer types that are eligible to purchase HUD-owned homes. Certain conditions must be met to determine the eligibility of a buyer to bid on a particular home. Only HUD-registered bidders can make offers on properties. Homebuyers must use a HUD-registered Selling Broker or Selling Agent to make an offer on their behalf.
Owner-Occupant: Eligible owner-occupants are individuals who have not purchased a HUD property as an owner-occupant within the past two (2) years. They can bid on homes in the Exclusive or Extended periods.
Investor: Eligible investors can bid on homes only in the Extended period.
Good Neighbor Next Door (GNND): Eligible GNND buyers can find details on the program on the following Web page – http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/reo/goodn/gnndabot.
GNND buyers can bid on single-unit homes in a Revitalization Area during the Lottery phase. During the Lottery phase, GNND buyers (1) get a 50% discount off the HUD appraised value, and (2) are given preference over Government Agencies and Nonprofits in the selection of a bid-winner. After the Lottery phase, GNND buyers are not eligible for the 50% discount.
For example, if HUD lists a home at $100,000 and the home is in the Lottery phase, a GNND buyer can buy it for $50,000 provided they occupy the home as their personal residence for the required 36-month occupancy period. If they qualify for any FHA-insured mortgage program, their down payment is only $100 and they may finance closing costs.
Nonprofit: Nonprofit organizations need a valid HUD NAID, and they must be registered on HUD Homestore. They use that NAID to place the bid themselves (without using a Selling Broker). Nonprofits can bid on homes in Lottery, Exclusive, and Extended phases provided the homes are in approved purchase areas. If the property is in the Lottery phase, the home must be uninsured. Nonprofits cannot bid for Dollar homes. There is no “Selling Broker” commission for bids placed using a Nonprofit NAID, since the Nonprofit is placing the bid themselves.
See http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/np for more information.
Government Agency: Government Agencies need a valid HUD NAID, and they must be registered on HUD Homestore. They use that NAID to place the bid themselves (without using a Selling Broker). Government Agencies can bid on homes in Lottery, Exclusive, and Extended phases provided they are in approved purchase areas. If the property is in the Lottery phase, the home must be uninsured. Government Agencies are the only bidders who can bid for Dollar homes. There is no “Selling Broker” commission for bids placed using a Government Agency NAID, since the Government Agency is placing the bid themselves.
See http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/reo/goodn/dhmabout for more information about Dollar homes.
To find more information about these programs below and to search for HUD Programs near you, go to www.hudhomestore.com. Please call us at any time to discuss options on purchasing your first HUD home and come back to this blog next month for more HUD initiatives and information.
HUD’s Dollar Homes initiative helps local governments to foster housing opportunities for low to moderate income families and address specific community needs by offering them the opportunity to purchase qualified HUD-owned homes for $1 each.
Dollar Homes are single-family homes that are acquired by the Federal Housing Administration (FHA) as a result of foreclosure.
GOOD NEIGHBOR NEXT DOOR:
Buying a home through HUD’s Good Neighbor Next Door initiative is designed to encourage renewal of revitalization areas by providing an opportunity for law enforcement officers, firefighters, emergency medical technicians and teachers to purchase homes in these communities. HUD provides a substantial incentive in the form of a 50% discount off the list price of eligible properties. Bids for property must be submitted by a HUD-registered real estate broker.
The Federal Housing Administration (FHA) offers community and faith based nonprofit organizations the opportunity to purchase HUD homes at discounts up to 30%. With this discount, local nonprofit organizations invest in their communities through property rehabilitation and resell to first-time homebuyers and low to moderate income families.
Link to this information on the FAQ page at www.hudhomestore.com can be found here!
After the Asset Manager accepts a bid:
• Bidding Broker/Agent gets an email notifying them that their bid has been accepted with a
subject line “Selling Broker/Agent Bid Acceptance Notification”.
• E-Signature checklist allows verification or updating of Buyer, Signing Broker, and Closing Agent
• An Earnest Money Deposit section does not display until a contract is in place.
After Asset Manager starts the contract process
• Bidding Broker/Agent gets another email with a subject line “Selling Broker/Agent Final Bid
• E-signature checklist allows upload of Earnest Money verification and verification and update of
Buyer, Signing Broker, and Closing Agent info.
E-Signature Steps after the Asset Manager verifies the checklist
1. Bidding Broker/Agent gets an email with a link to review the contract and clicks “Finish” to
move to the next step (or clicks the “Click to Reject the Sales Package” button to cancel the
2. Broker responsible for signing the contract gets an email with a link to sign the contract and
clicks Finish to go to the next step.
3. Each Buyer gets an email with a link to sign the contract and click Finish to go to the next step.
Primary buyer signs at bottom of sales contract; additional buyers get to initial at the bottom of
the following page.
4. Closing Agent gets an email with a link to sign the contract and clicks Finish to go to the next step.
5. Asset Manager gets an email with a link to sign the contract and clicks Finish to go to the next step.
At this point the E-Signature process is complete.
Note on entering Closing Agents
When you start to type the Closing Agent name, a list of the HUDHomestore’s existing Closing Agents
drops down. Try to find the one you will use from the drop-down list instead of entering a new one.
If you’re not sure which to use, pick one you’re familiar with (you can always change your selection later).
If you enter a new Closing Agent, there will be an extra step in the E-Signature process that will slow
things down. The Asset Manager or HUD staff will need to check whether the entered Closing Agent
matches one already in the system. If they can’t find a match, HUD staff will need to enter the new
one into the system. You will get the contract more quickly if you use the system to find a match to
the Closing Agent you are entering.
Tip on finding an existing Closing Agent
If the Closing Agent is in HUDHomestore as “The Most Excellent Closing Agent Company”, entering
the word “Excellent” won’t necessarily find them. Entering “The Most” would increase your odds of
finding them if they are already in HUDHomestore.
Adapted from: Friedlander, Virginia Practice – Landlord-Tenant Handbook pp4-13 (2014-2015 Edition)
|Warranty of habitability & duty of repair||There is now imposed on residential landlords a statutory warranty of habitability, compliance with building codes, as well as other duties which are the same of those imposed in VRLTA with the exception that the landlord and tenant may waive non-building code requirements in writing.
|Landlord warrants the property to be fit and habitable as well as other obligations to comply with the building codes, provide running water and hot water, etc. The landlord can only shift some of these duties to tenant. § 55-248.13|
|Deposit||There are no statutory requirements in reference to security deposits. No interest is required and there are no specific requirements as to inspection of the property.||Both refundable and non-refundable are now OK. Interest is no longer required to be paid by the landlord on security deposits. Pre-paid rent is now allowed if landlord puts it into an escrow account.
45 days are allowed for return of deposit with 15-day possible extension. The court is to return the deposit, over and above unpaid rent, if the landlord fails to comply with the time requirements under this section.
|Rent Escrow||A rent escrow and tenant assertion in residential rentals has been added similar to VRLTA. § 55-225.12||Rent escrow permitted under specified conditions.
§§ 55-248.27 et seq.
|Retaliatory Eviction||Eff 7/1/2015 Non-VRLTA law gives the tenant in a dwelling the defense and claim of retaliatory eviction as defined in § 55-225.18||Tenant may defend an eviction or prosecute an affirmative action for the landlord’s retaliatory conduct as defined in the Act. § 55-248.39|
|Self-Help||Self-help in all residential situations is now prohibited. Self-help IS still available in nonresidential situations.
§§ 55-225.1 & 55-225.2
|No self-help is permitted for either the landlord or the tenant. Certain temporary lodging now permits self- help where the temporary lodging is in a boarding house, hotel, etc., and not the boarder’s primary residence or if it is, then not for more than 90 days. § 55-248.36|
|Attorney’s Fees||No attorney’s fees can be awarded unless they are provided for in a written lease or by a statute.||Reasonable attorney’s fees are awarded to either the landlord or tenant unless the action complained of is shown to have been reasonable under the circumstances. §§ 55-248.21 and 55-248.31|
|Access||A landlord has no right of access to the property except where provided in a written lease. The same safeguards of a tenant or authorized occupant are provided where there is a court entered protective order. §22-225.5||Reasonable access to leased property is permitted the landlord with safeguards against abuse of access for the protection of the tenant or authorized occupant. § 55-248.18 & § 55-248.18.1|
|Waste||A landlord can recover double damages for willful waste. §§ 55-212 to 55-214||A landlord may recover actual damages plus his attorney’s fees. § 55-248.16|
|Constructive Eviction||A residential tenant may offset rent, claim reduction, use rent escrow (with conditions), plus recover actual damages, and attorney’s fees. He does not have to leave the property to escrow his rent with the court. § 55-225.12||A tenant may offset rent, claim reduction, use rent escrow (with conditions), plus recover actual damages, and attorney’s fees. He does not have to leave the property to escrow his rent with the court. § 55-248.27|
|Notice to Cure Breach||A 5-day notice to pay may be mandated by § 55-225 unless waived or enlarged in a written lease. For a material breach by landlord affecting health or safety in a residence, to terminate the lease, a tenant must give landlord a 30-day notice to quit, with 21 of those days being for the landlord to cure the breach. § 55-225.12. For non-monetary breach by tenant, no statutory notice is mandated. The common law requirement is that the notice be reasonable unless the lease provides otherwise.||A 5-day notice to pay for nonpayment of rent is required. A reasonable notice to repair (without terminating lease) is necessary. A 21-day notice to cure or terminate in 30 days is required to terminate for a breach other than a recurrent one or certain criminal/willful conduct. §§ 55-248.21, 55-248.31|
|Waiver||Accepting rent knowing of a default, especially rent into the future, is a waiver under the common law. The reservation letter may establish no intent to waive and thus be effective. There is no statutory provision on waiver in the common law. It is recommended that the VRLTA provision on waiver be incorporated, in some form, into a common law lease||Accepting rent from a defaulting tenant is not a waiver if the landlord gives a written notice to the tenant, within 5 business days of receipt of the rent that the acceptance of rent is made with reservation of the landlord’s rights. Landlord may include the reservation of rights in the written notice to cure. § 55-248.34:1|
|Redemption||A tenant still may redeem possession under § 55-243 if he tenders all rent due, costs and attorney fees to landlord on before first return. This right is available to tenant only once every 12 months. It occurs automatically upon payment of the required amount. A redemption tender from a local government or nonprofit results in a 10-day continuance to generate the payment. § 55-243||A tenant still may redeem possession under § 55-243 if he tenders all rent due, costs and attorney fees to landlord on before first return. This right is available to tenant only once every 12 months and is automatic upon payment. A redemption tender from a local government or nonprofit results in a 10-day continuance to generate the payment. § 55-248.34:1|
|Prohibited Terms||OK to waive remedies; OK to exculpate landlord; OK to exact specific attorney’s fees; OK to indemnify landlord; OK to confess judgment against tenant.||A lease may not: waive any remedies; exculpate landlord; indemnify landlord; confess judgment; call for other than “reasonable” attorney’s fees. § 55-248.9|
|Assignment||The assignment of a lease by a landlord will not release him from liability on the lease unless the lease provides for the release of the landlord’s liability on assignment.||A landlord’s assignment of lease will relieve him of liability to the tenant. § 55-248.14|
|Abandonment||Physical possession is not necessary so long as rent is paid. If abandoned without rent being paid, the landlord must post a 10-day notice to cure for a monthly tenant or 30-days for a yearly tenant; landlord’s retaking is a surrender. No rent accrues after surrender unless a contrary provision is written into the lease OR Landlord retakes to re-let premises. This can be modified in the lease. § 55-224||A lease may provide for deemed abandonment if the unit is left vacant without notice for more than 7 days if appropriate language is written in the lease. A landlord may accrue rents after abandonment up to the re-let of the unit. If abandonment status is unclear, then the code permits a 7-day notice to determine abandoned status. §§ 55-248.33, 55-248.38:1|
|There is a mandatory duty to disclose visible evidence of mold § 55-225.7, Chinese drywall § 55-225.11 and foreclosure dangers due to mortgage default or threats of foreclosure, § 55-225.10, and prior use as a “meth” lab, § 55-225.17||Landlord must disclose the presence of visible evidence of mold to the tenant on the move-in inspection, giving the tenant the opportunity to terminate or accept. § 55-248.11:2. Landlord must disclose the agency, new owners, and certain conversion information. § 55-248.12. Disclose presence within a “noise zone or accident potential zone” where located near a military air installation. § 55-248.12:1, and prior use of property as a “meth” lab § 55-248.12:3|
|Delivery of Possession 10||Delivery of possession is not mandatory at common law if lease gives tenant a right to possession.
|If a landlord willfully fails to deliver possession, then tenant’s rent abates and tenant may terminate lease on a 5-day notice or regain possession through court action. §55-248.22|
|Military||Mere change of duty station of a military tenant will not entitle the tenant to terminate lease unless governed by the Servicemembers Civil Relief Act. Provided however, if the rental IS exempt from VRLTA because of the number of single family homes or condominiums that the landlord owns, then § 55-248.21:1 applies and permits the military tenant to terminate a lease on 30 days’ notice upon a permanent change of duty station of more than 35 miles or a TDY of more than 35 miles and 3 months. § 55-248.21.1||A military tenant may terminate the lease on 30 days’ notice upon a permanent change of duty station of more than 35 miles or a TDY of more than 35 miles and 3 months. § 55-248.21:1|
|Nothing is specified in the common law about rules and regulations. Traditional contract law bars unilateral modification of a written lease unless the terms of the lease otherwise provide.||Rules and regulations are automatically deemed a part of the lease, including certain later unilateral modifications. § 55-248.17 (See also definition of “rental agreement.”).|
|Effect of Unsigned Lease||Traditional contract formation rules apply where one of the parties fails to sign or deliver the signed lease. Any such tenancy would be month-to-month, if the rent IS paid monthly, unless the court finds acceptance of the lease has||If a landlord fails to sign but accepts rent from tenant who does sign, the lease has same “effect” as if signed for up to one year. Same “effect” is given if a landlord signs but tenant does not and tenant takes possession and pays rent. § 55-|
|A pre-trial rent escrow protective order applies when requested by the landlord in the situation where the tenant is sued for nonpayment of rent and the tenant seeks a continuance or a trial date. This code section is limited to residential situations and requires the escrow of past, present and future rent, unless the court finds that the tenant is asserting a good faith defense. The landlord may obtain early judgment for rent and possession if the tenant fails to pay the court ordered rent escrow. § 55-225.14||A pre-trial rent escrow protective order applies when requested by the landlord in the situation where the tenant is sued for non payment of rent and the tenant seeks a continuance or a trial date. This code section is limited to VRLTA situations and requires the escrow of past, present and future rent unless the court finds that the tenant is asserting a good faith defense. The landlord may obtain early judgment for rent and possession if the tenant fails to pay the court ordered rent escrow. § 55-248.25:1|
|Landlord may bar
a tenant’s guest or
|A landlord may bar a tenant’s guest or invitee from the premises on written notice if the person’s conduct violates the rental agreement or the law. The tenant may challenge the landlord’s action by filing for court action to vacate the bar notice. §55-225.5||Under VRLTA, a landlord may bar a tenant’s guest or invitee from the premises on written notice if the person’s conduct violates the rental agreement or the law. The tenant may challenge the landlord’s action by filing for court action to vacate the bar notice. § 55-248.31:01|
|Confidential Information Landlord||No corresponding code section exists for common law situations||Under VRLTA, disclosures by land-lord without writ-ten consent of tenant are listed. § 55-248.9:1|
|Accelerated rent||Accelerated rent at common law is permitted as liquidated damages pro-vided it is not deemed a penalty.||Under VRLTA, actual damage only. No accelerated rent is permitted. § 55-248.35|
|Injunctive relief||Injunctive relief governed by common law.
|Under VRLTA, any person aggrieved may seek injunction relief as well as damages in circuit court. § 55-248.40|
This is a great article from NVAR! The direct link can be found here: