Thursday, August 27, 2009

Offers on HUD Homes this Week

This has been an interesting week with respect to writing offers. Last week I wrote two HUD offers; One for a Lancaster property listed by HUD for $57,500 and another in Rosamond listed by HUD for $45,000.

Due to HUD guidelines, FHA buyers besides coming in with 3 1/2% down payment must pay any overage they bid on a HUD home between list price and purchase price. For example, the list price of the Rosamond house was $45,000. The HUD appraiser appraised the house at $45,000. This appraisal has been assigned an FHA Case Number which means this appraisal must be used by the buyer’s lender. IF my buyer had offered $55,000 the minimum value based upon actual activity in the area where this property is located, my buyer would have to come in with $10,000 down, the difference.

Since my buyer actually offered $45,000 he only needs to bring in his 3 ½% required down payment or $1,575 a difference of $8,425. My buyer won the bid and we submitted the contract to HUD this week.

Now for Lancaster, my client bid $57,700 and the house actually sold at $80,020.

WHY?? There is no rhyme or reason to this process I feel. IF you are interested in looking at a HUD home, check out the following site:

www.hudpemco.com

Northern California for Kern County Properties

Southern California for Los Angeles or other Southern California county properties.

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