Academy School District 20 Colorado Springs - Buying A HUD Home
Buying A HUD Home In Colorado Springs
Buying a HUD Home in Colorado Springs is very different from buying a resale or short sale property. HUD homes in Colorado Springs are FHA foreclosure homes. The sale is very tightly controlled through a bidding system over the internet. A buyer of a HUD home in Colorado Springs must be represented by an agent such as those with Murray & Associates of Keller Williams Clients' Choice who have access to the bidding system.
HUD homes in Colorado Springs are available for purchase by anyone. There are certain time frames for bidding, providing the advantage to owner occupied buyers. Once the owner occupied bidding period is over (typically 30 days) then bidding opens to all.
If a buyer plans to occupy the home, they must agree to live in the home for one year and cannot purchase another HUD home for a two year period. There are no restrictions for investors.
The list price of the home is the appraised value. When financing with an FHA loan, an additional appraisal is not required. With an acceptable offer, HUD will typically approve 3% of the purchase price for seller paid closing costs for the buyer's loan.
A very important point to understand is that the HUD property is sold "as-is." HUD will not make repairs to the home unless it is a safety issue or if vandalism occurs after acceptance, but before closing. Investors cannot use the inspection to cancel the purchase.
During the first five days of a qualified new HUD listing, police officers, firemen, teachers, and EMTs can purchase a HUD home for 50% of the list price. They must be able to qualify for the Good Neighbor Next Door program and qualify to purchase the home at full list price. At closing, the list price is discounted 50% and no closing costs are paid by HUD.
Once a bid is accepted, the buyer has 15 days to complete their inspection and close within 45 days. For purchases that require escrow for repairs (FHA 203(b)), 60 days are allowed for closing. Extensions can be requested, but must be requested at least 5 days prior to the scheduled expiration date, and at a cost per day depending on the cost of the home. The highest extension cost is $25 per day and the minimum period is 15 days. If the buyer closes prior to the 15th day, the difference will be refunded to the buyer at closing.
Purchasing a HUD home in Colorado Springs does not have to be difficult, the hard part is getting acceptance of a bid. Be sure to find an agent who is qualified to help with the HUD bidding process. Murray & Associates under Keller Williams Clients' Choice are qualified to submit bids on HUD homes.