Buying a Franklin, TN HUD Home
06/27/11
There are three very important things you must know about buying a Franklin HUD foreclosure home from the government that will save you time and money. A HUD owned home is simply a house that was financed with a FHA loan when it was originally purchased. HUD insures the loan to the lending bank so that after the bank foreclosure, the bank sells the home back to HUD (the U S government). Then HUD goes about listing and reselling the home at a deep discount to the market through various vendors around the country.
The first thing to know about buying a Franklin HUD REO property is that you must make an offer through a HUD approved real estate agent or real estate broker. You will be required to have a HUD approved buyer’s agent submit the offer to HUD. Every offer is submitted electronically in a bid process – unlike a regular written offer presented to the seller on a more typical home sale. An individual without a real estate license can not make a bid on a HUD home. Furthermore, only individuals who will occupy the home as their primary residence may bid on the home during the first 10 days the home is available. Investors are locked out of the bidding during this time. Also, during the first 10 days, HUD has a “sealed bid” process meaning they do not look at nor accept any bids for the first 10 days. After the “sealed bid” timeframe expires, they examine all bids received and either select a winner or decline all offers and continue into the “daily open bidding” phase. In this phase, anybody may make an offer and all offers are reviewed each morning to determine if a winner will be accepted.
The second and most important factor to know is that HUD has a very specific and predetermined criteria for the minimum bid they will accept on any given home at any time. This means that you can know in advance the lowest possible price HUD will accept at any time BEFORE you make an offer on a Franklin, TN HUD foreclosure. The HUD criteria for an acceptable offer is dependant on the appraised value of the home and the number of days the home for sale has been on the market. There is a minimum acceptable offer on every home at all times and the amount of the minimum is determined by the “net bid dollar amount”. The “net bid dollar amount” is determined by starting with the purchase price and subtracting the closing cost you may require HUD to pay for the buyer, the real estate commissions, and any other fees HUD is required to pay. You will need an agent who has experience bidding on HUD government foreclosures to assist you in making the lowest possible bid and having your offer accepted.
The third important factor you need to about buying HUD foreclosures or government owned homes is the process required before and after a bid is accepted. The very first thing HUD does when they foreclose on a Franklin, TN home is to assign the home to a vendor and agent who will handle the sell. The vendor will order a fair market appraisal to determine the appropriate value for the home to sell in “as is” condition in 90 days. This value is generally a below market value. The appraiser will note the value, list any required repairs and determine if the home is “insurable”, meaning if a future buyer can purchase the home with a new FHA loan. Once the tenant is evicted and all remaining personal property has been removed, then the listing agent will list the home for sale in MLS (multiple listing service) and on the HUD website. The HUD website is www.HUDHomestore.com and is the official HUD website for homes for sell buy the government. This website, because it is a government site, is very difficult to navigate. I recommend you visit www.PremierBuyersAgent.com to easily find HUD foreclosures in Franklin, Tennessee. Once a HUD REO (Real Estate Owned) property has an accepted bid, the buyer has only 48 hours to overnight an original contract to the HUD approved vendor or the property will be placed back on the market for sale to a new bidder. A successful bidder is required to provide a $500 – $1,000 certified check at this time, depending on the amount of the purchase price. You should generally plan on allowing at least 45 days from the time HUD signs the offer until closing on a HUD owned property. HUD does not require you to use their closing attorney but their fees are extremely low.
To easily and quickly find HUD owned homes for sale in Franklin, TN click on the following link: www.http://premierbuyersagent.com/hud-homes/Franklin-hud-homes
This information was provided by Scott Hines, a HUD approved buyer’s agent specialist. Scott is the owner and broker at Premier Buyer’s Agent LLC, a recognized expert on buying HUD properties and may be contacted for any questions at (615) 268-2881 or at www.PremierBuyersAgent.com . Scott was a top selling buyer’s agent in Tennessee in 2010 and has assisted many past clients navigate the Washington “red tape” to successfully purchase HUD foreclosed or government owned homes at below market values!