Commonly Asked Questions for Foreclosure Properties

If you have additional questions not addressed on this site, please contact Mike Sackman.

The following are commonly asked questions regarding HUD and VA foreclosed properties.  Most answers apply to all foreclosed properties.  These answers represent the "tip of the iceberg" of what you need to know before purchasing a foreclosed property. Please contact me for detailed assistance and to see any foreclosed property on the market today.

I'm interested in purchasing a HUD or VA property.  What's the first thing I need to do?

If you're not paying cash, go to a mortgage company immediately and get pre-qualified for a loan.  Both HUD and VA require pre-qualification of purchasers.  Do not delay.  Pre-qualification information must be included with your bid!

I've been told that the list price is the minimum bid amount.  Is that true?

Absolutely not!  Both HUD and VA consider offers less than full price.

If there are no other bids besides mine, will my offer be accepted?

It depends.  Both HUD and VA set the minimum amount they will accept on each property they place on the market.  They are negotiable, but not extremely negotiable, on their prices.

Do I need any money at the time I submit a bid?

Yes. VA requires $500 earnest money.  HUD earnest money depends upon the type and price of the property.  For most properties, if the list price is $50,000 or less, then the earnest money is $500.  If the price of the property is more than $50,000, then the earnest money required is $1,000.  If you do not win the bid, your earnest money is returned to you.

How much total cash will I need?

It depends on the type of financing for which you qualify.  Count on needing at least 3% of the purchase price for HUD, however, VA may guarantee up to 100% if you intend to occupy the property.  Investors will need more down payment, usually at least 10%.  Ads that tout "$500 down payment" are misleading.  It's true that on a VA vendee loan, $500 is the down payment amount, but there are closing costs to be added to that figure.

Will HUD and VA make repairs to the property?

No.  HUD and VA properties are sold "as-is".

I notice the utilities are not on at these properties.  May I stipulate that my offer is contingent upon a home inspection?

VA automatically gives the purchaser the right to a home inspection and allows the purchaser the right to withdraw the offer if the inspection reveals hidden problems.  HUD gives the purchaser the right to a home inspection, but you may forfeit some or all of your earnest money if you withdraw your offer as a result of the home inspection.  Be sure you read all documentation carefully when submitting a HUD bid.

How do I see inside a HUD or VA property?

Call me anytime!

Must I use a real estate agent?  Can I buy directly from HUD or VA?

Yes, you much use a real estate agent.  The only exception to this rule is a program HUD offers only to officers and teachers.  This program is restricted to very few properties across the state, in neighborhoods that HUD is attempting to rehabilitate. 

Is there a lot of paperwork involved in buying a HUD or VA property?

Are you kidding?  This is the government we're talking about!  They all require a preapproval and a written contract, but I do all of that with your help.

Are HUD and VA properties "good deals"?

It depends upon the property.  Some are and some aren't, in my opinion.
Again, there are many pro’s and con’s to buying short sales and foreclosures. You need a knowledgeable professional on your side to guide you through the process. Best of all, my services are of no cost to you!!!! The bank pays for my services through the selling process, so, you having nothing to lose and everything to gain.