How do I buy homes from Government in this market?

[Entrepreneur]

I know there are some really great opportunities to jump on and buy a home undervalued.

Anyone purchased/ing a home straight from the USA government? Where and how can I find these properties?

Is it necessarily better and cheaper to buy foreclosures from the government rather than banks in 2010?

I am new to this and real estate and will appreciate all advice. :smx19:

 

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[NoMoneyDown]

General Information

Government Homes For Sale

Department of the Treasury

Be forewarned, though, that working with the government can be excruciatingly painful. Expect a lot of "hurry up and wait" along the way.

 

[nmzj]

Hey Nomoney,

Have you actually bought property on bid4assets?

 

[Russ H]

Lots of foreclosures through banks dying to get rid of them.

We bought one a few months ago-- no money (of ours) down.

$549K in loans for a 9 BR/5.5 BA 4,000 sq ft home in downtown Napa.

Got it approved as a 5 BR B&B.

Current (not 2006) price for a 4000 sq ft home in Napa: $900K-$1M

Typical price for a 5 rm B&B in Napa: $1.25M

-Russ H.

 

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[kurtyordy]

last I knew ocwen.com handled VA loans

 

[StreetsofSilver]

You can bid on HUD properties thourgh hooksvanholm.com. Depending on which state that you live in, you might need to use a real estate agent who is a registered HUD broker to place the bid for you. In my experience, HUD is a pain but has some good deals if you are willing to play by their rules and jump through the hoops.

You can also check your local city website for city owned properties. You can find just as many good deals from banks as you will from the government. Fannie Mae is offering the Homepath loan to investors now. :groove:

 

[NoMoneyDown]

Hey Nomoney,

Have you actually bought property on bid4assets?

No. I was looking at a business property repossessed from the IRS in Corpus Christi a while back, and almost made a bid, but decided against it. But that was it.

Most of my government purchases were directly thru HUD. Great deals if you are patient and know when and where to look. But like I said, buying through the government isn't for the squimish. I actually had them return a form I filled out on a purchase once just because my broker didn't word something exactly how they wanted. They gave me a 48hr turnaround to get it fixed or the contract would be voided. My broker just happened to be out of town at that point, but luckily I got hold of him through his cell and got it all straightened out in the nick of time. Just play their game and you can get some really good deals.

 

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[NoMoneyDown]

BTW, I believe all government foreclosures require you to go through a broker to purchase a property (at least HUD does). IOW, you can't just submit an offer through the listing agent on your own behalf. So it's best to find a local RE agent who has a lot of experience in dealing with these types of properties.

For HUD (and maybe all government foreclosures) ...

Unless things have changed very recently, HUD requires a $1,000 earnest money for purchases >$50k. If <$50k, you will need $500 EM. Earnest money must be in the form of a cashier's check. What I had my agent do is make a copy of the check, and send it in along with all the HUD paperwork. You can then use the same check for other bids, or just redeposit it. If you end up winning the bid, just get a new check (and, in cases where it's been a while, HUD will ORDER you to get a newer check).

Another reason for getting an experienced agent familiar with HUD properties is that they can give you insight into all the little things about how HUD works. For example, my agent told me that she has never heard of HUD accepting bids for anything less than 87% of list price in our area. Armed with that knowledge, I would submit bids for 87.01% of list price for properties (as long as the numbers worked). Most of the time I was outbid, but a few times ...

Also, the properties themselves go through cycles, which most people understand. That is, Owner-occupied bidding first, then if the property is not sold, bidding is open to everyone. Then if it still sits unsold, they reduce the price - generally by 10%.

I was following one property out of state several years ago. It originally listed for something like $45k. I watched as it sat and slowly went all the way down to $21k after a few months. Then one day it was no longer listed. I looked up information on it and found that someone bought it for $3,000!!! You just never know.

 

[StreetsofSilver]

Another reason for getting an experienced agent familiar with HUD properties is that they can give you insight into all the little things about how HUD works. For example, my agent told me that she has never heard of HUD accepting bids for anything less than 87% of list price in our area. Armed with that knowledge, I would submit bids for 87.01% of list price for properties (as long as the numbers worked). Most of the time I was outbid, but a few times ...

FYI, HUD lowers the agent's commission on anything below 87% list price. I'm in the middle of selling one for 75% list. You might want to get a new agent. :smxB:

 

[MJ DeMarco]

FYI, HUD lowers the agent's commission on anything below 87% list price. I'm in the middle of selling one for 75% list. You might want to get a new agent. :smxB:

In other words NoMoneyDown, your agent is a bold-faced liar. Holy shit I would be pissed off and I'd fire that real estate agent immediately. Thanks StreetsofSilver for this info.

 

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[Red]

FYI, HUD lowers the agent's commission on anything below 87% list price. I'm in the middle of selling one for 75% list. You might want to get a new agent. :smxB:

This isn't true in Arizona. Many HUD homes listed on our MLS have a 5% co-broke. It may be a state by state thing but that's not the way it is here. And when anyone signs a listing agreement and an agent offers a home in our MLS, they cannot cut the buyer broker's commission without their permission.

 

[StreetsofSilver]

HUD has regional US offices. I've dealt with the King of Prussia office and the Anniston, AL regional office and they are both the same. The MLS will say "up to 5%". When the buyer's agent submits the bid to HUD it asks the agent what their commission is. HUD approves the agent commission before it approves the offer.

Red said, "And when anyone signs a listing agreement and an agent offers a home in our MLS, they cannot cut the buyer broker's commission without their permission".

HUD's addendums supercede any state contracts. They are paying the commission. They can do whatever they want. Another agent in my office had an offer accepted at 50% of list price and got a commission check from HUD for $250!!!

 

[Red]

HUD's addendums supersede any state contracts. They are paying the commission. They can do whatever they want.

The statement above is simply inaccurate.

A listing agreement and a purchase contract are two separate legal contracts here in Arizona-one does not supersede the other unless agreed upon by the agents. I can tell you right now, if a seller tried to pull that crap with me, I would point them in the direction of the shortest peer to stroll towards... The state of Arizona (which governs these listings) does not put up with crap like that.

Our MLS co-brokes are NOT variable on HUD homes here in the valley. If that's how it is where you are (and you are a subscriber to your local MLS) then that is your state. HUD is an entity like any other and when they enter into a binding legal agreement to sell a property they own, they are bound by the laws of the state of Arizona like any other selling entity. If HUD tried to pull the above scenario you outlined, AZ agents would tell HUD to go f&ck themselves. I feel bad for the agents in your state if they're allowing themselves to be rail-roaded by HUD. Then again, in life, you don't get what you deserve, you get what you negotiate.

 

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[MJ DeMarco]

The statement above is simply inaccurate.

Ooohhh cat fight! Just kidding ladies.:smxB:

 

[Wimtbimtb]

Ooohhh cat fight! Just kidding ladies.:smxB:

From seeing these 2 ladies that is a Cat Fight I would pay to see...

 

[Red]

Ooohhh cat fight! Just kidding ladies.:smxB:

From seeing these 2 ladies that is a Cat Fight I would pay to see...

both of you shoosh!

:nono:

 

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[kurtyordy]

street- what you are saying is not completely accurate. HUD looks at the net money to hud. So if an agent chooses to lower their commission on a hud contract to increase the net to hud to make the offer more attractive. However, once the contract is offered and accepted, hud cannot decide to lower the commission. The agent commission is stated right on the contract.

 

[StreetsofSilver]

kurt - thank you for the clarification. That was what I was trying to say, but I wasn't expressing it clearly.

Listing contracts and sales agreements are seperate contracts in PA, also. However, HUD's listing contract supercedes the state listing contract and HUD's sales addendum supercedes the state sales contract. HUD will reject an offer if their net is too low due to the agent's commission being too high.

Red, many PA brokerages are pretty much telling HUD to go f&ck themselves by not renewing their NAID licenses for 2010. They are flat out refusing to sell HUD properties. This is largely due to the fact that they have too many restrictions - the $25 overnight fees, the fact that each office gets 1 HUD key per x amount of agents. So 40 agents might share 1 HUD key that opens the door to every HUD property in a city. If you have a HUD showing on Sat. and another agent has the key out or forgot to return it, you are SOL on that showing.

 

[Red]

Red, many PA brokerages are pretty much telling HUD to go f&ck themselves by not renewing their NAID licenses for 2010. They are flat out refusing to sell HUD properties. This is largely due to the fact that they have too many restrictions - the $25 overnight fees, the fact that each office gets 1 HUD key per x amount of agents. So 40 agents might share 1 HUD key that opens the door to every HUD property in a city. If you have a HUD showing on Sat. and another agent has the key out or forgot to return it, you are SOL on that showing.

Wow, that IS brutal... glad to see agents in PA standing up for themselves -things don't change otherwise. We get our own set of HUD keys (they sell them here for two bucks).



fftopic:



Hey Entrepreneur - is there any reason you are only targeting Gov't owned homes & ruling out other potential deals? Just curious about what your goals are and what you're wanting to accomplish...

 

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[Guest3722A]

Is the NSP still available? I remember when my girlfriend and I were looking for homes that every county/city had their own different set of rules with this whereas with one county, they would pay 50% of the house payment and the lien would be relieved if the homeowner lived there for over 15 years. Whereas a city within that county would offer something substantially less... hmmmm....

Neighborhood Stabilization Program Grants - Community Development - CPD - HUD