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What Is A HUD Home?

When a borrower defaults on an FHA loan, the federal government pays the lender the balance remaining on the defunct loan. HUD takes control of the property and sells it through one of their Local Listing Brokers. Giving Tree Realty has been awarded as a Local Listing Broker for HUD. Our Brokers are registered HUD Brokers and can assist you in the purchase of a HUD home. HUD offers special programs for law enforcement officers, firefighters, emergency medical technicians and teachers to purchase homes in certain communities. HUD provides a substantial incentive in the form of a 50% discount off the list price on eligible properties. HUD also offers a $100 down payment program for buyers using FHA financing. Contact us today to find a great deal for you on a HUD home!

What is a REO?

If a foreclosed property does not sell at public auction, the lender takes title and it becomes Real Estate Owned (REO). Since the lender does not want a non-performing asset on its books, it will clear the title (get rid of liens against it), maybe do some cosmetic repairs to the property, and put it back on the market at a discount to get it sold.

The lender/seller will list the property with a local Real Estate Broker who is knowledgeable selling these types of properties. Giving Tree Realty has a REO Department which has been listing and selling REO properties for over a decade. We have specialized Buyer’s Agents at Giving Tree Realty that are trained in selling bank foreclosures and HUD homes and can assist you through the process of buying one. Want to be the first to know about upcoming and brand new REOs? You can if you are part of our Giving Tree Realty Investor Club. Sign up today, it’s FREE!

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5 Things You Should Know Before You Buy a Bank Foreclosure

  1. Get pre-approved for a mortgage before you start looking so you know exactly what you can afford. Most banks will require a pre-approval letter when you submit your offer on a property. Giving Tree Realty can recommend some great mortgage lenders to you.
  2. Hire a Buyer’s Agent who is experienced at selling REOs. Some Agents won’t show REOs because they fear it is more work. At Giving Tree Realty, we have Buyer’s Agents who specialized in these types of properties. Call us today and we will match you with the Buyer’s Agent who is right for you.
  3. Be prepared for a quick due diligence period. Most banks only give 10 days or less for buyers to conduct their inspections. Since properties are sold in as-is condition, don’t expect the seller to make repairs or re-negotiate the sales price.
  4. Be prepared to put some sweat equity into the home or hire a contractor. Most REOs need some work, which is why they are discounted. A Home Renovation Loan or a 203K loan will help you finance the cost of repairs into your mortgage. However, it is possible to find REOs that have recently been repaired and are in move-in condition!
  5. Be prepared to put your best foot forward if you get into a multiple offer situation. The properties that are priced the lowest usually garner several offers so the seller will ask for highest and best offers by a certain date and time.