Denver Hud homes! .. again .. Alright!
Denver HUD homes were quite a common opportunity in the down market years of 2007 to 2010.
A buyer tonight just asked about one and after describing HUD homes and the process, it seemed worth a few more minutes to just blog the summary.
HUD homes are a great opportunity and a great way to buy a Denver home for the following reasons:
1. HUD pre-inspects them. The inspection results are on the website: www.hudhomestore.com. The buyer can decide before even seeing the home if the mechanical shortcomings of the property are issues they can handle.
2. It is easy to write a contract and submit one electronically. HUD homes are sold through an online bidding process. The contracts are simple, the homes are sold as is.
3. HUD homes are easy to show. These homes are always vacant and HUD makes safety repairs before anyone can show the home. Because the home is vacant, it is easy to set up a showing last minute or at odd hours.
4. Buyers know that the seller (HUD) is going to accept an FHA loan or require a conventional loan.
5. The home has already been appraised. This saves a step and costs in the lending process. HUD lists homes for the appraised value.
6. The homes are listed live in the MLS with ample time to go see the home and submit an offer. This allows buyers to take their time and make the best possible decision. Usually, during the first week of a HUD home listing, the bidding is only open to primary residents, not investors.
What is hard about it is as follows:
1. Hustling in an aggressive offer in the first day does not grant you any benefits. In our competitive Denver seller’s market, the early bird is the one that gets the worm. HUD does not review offers until the morning after the bids are due.
2. The bid acceptance is given to the highest bidder based on the net proceeds to the seller. Because the home will not appraise over list price, competitive bidding is hard on buyers that do not have the extra funds to pay the difference between the list price and the contract price.
That is the shortest of stories regarding HUD homes.