Lessons Learned from Buying HUD Properties

1.  Meet all assigned deadlines set by Sage Acquisitions.  Missing deadlines will result in a cancelled contract.  Sage deals with numerous properties throughout the entire country, must meet its own deadlines to HUD, and therefore, cannot make exceptions for individual cases most of the time.  All deadlines and instructions are communicated clearly to the agent and buyer.  The most important deadlines are as follows:

  • 48 hours from accepted bid to contract submission.  Even in the Philadelphia HOC where the hard copy contracts must be mailed with WET (blue) signatures, the timeline allows for a full day to complete the contract and put in an overnight box.
  • 5 days prior to set expiration date any extensions must be submitted to Sage Acquisitions if you’re not going to make closing.  Set contract days to close (30 for cash, 60 for 203K, and 45 for all other financing) allow enough time for lenders to get their packages done; and if something arises, plenty of time to submit an extension.

2.  Ensure your title company fills out all information on the contract.  It should not be an issue and is not difficult to do.  Ensure they enter their Title ID#.  This will avoid delays in ratification.  Title companies should regularly check to ensure all of their information is up to date with HUD.

3.  Agent needs to ensure their broker signs all necessary areas of the contract.  Read the contract thoroughly because there are several pages that require the broker’s attention.  Brokers should also regularly ensure their NAID is current.  For brokers to check on this, click here.

4.  HUD will not make any repairs prior to or after closing.  HUD will not allow any repairs from the buyer prior to closing.  HUD will only make emergency repairs like gushing water, basement flooding, etc.  Any lender required repairs must be dealt with by the lender.  Ask your lender to make it happen!

5.  Any requests made to Sage Acquisitions for emergency repairs, extensions, etc must be accompanies by detailed documentation.  An email alone will not suffice, attach all pertinent documents to be reviewed as well.

6.  HUD is exempt from Amendatory Clauses…and REO properties are exempt from the Property Disclosure.  No need to send or prepare.

7.  HUD/Sage/Selling Agent does not turn on utilities for the home inspection or appraisal; the buyer/selling agent must fill our a form to request permission to turn on utilities, then contact the utility companies themselves to turn on for these events.  Instructions and the forms are all sent to selling agents upon ratification and can be found on the Sage Acquisitions website.  For those in Northern Virginia or out of the Philadelphia Hoc, these forms can be found at http://sageacq.com/philadelphia-hoc-region/.

8.  Lastly, use the Listing Agent to help you through the process.  Most of these agents have done many of these through Sage Acquisitions and, although they may not have all the answers, can certainly point you in the right direction.  Contracts needing corrections are cancelled if not corrected properly or by the deadline.  Have the Listing Agent give you a second set of eyes on the contract before you send so it can be done correctly the first time.  Most of the time, contract corrections are a result of the same errors seen over and over again by the Listing Agent – and would have been caught if the selling agent had used the Listing Agent to review it first.

Navigating your way through buying a HUD Home may seem difficult but it is quite easy.  Call your nearest agent at any time for questions about the process.  Send me an email at [email protected] for any questions or a short class on the process!  Don’t forget the check out all of the new listings in your area on www.hudhomestore.com!