Here is how the HUD Foreclosures work and why it is turning out to be such a HOT opportunity in San Diego. A HUD Foreclosure takes place when a borrower on an FHA loan defaults and goes into foreclosure. FHA will purchase the loan back from the lender and pay them the amount of the loan. FHA then sells the property using an augmented auction process to the highest bidder.
Here's the great part- the competition is virtualy ZERO!
Why?
First. The San Diego HUD foreclosure homes are not on the MLS for the first 30 days, so hardly anybody knows about them.
Second. Buyers must be represented by a HUD-certified broker. Very few of hte brokers in San Diego are certified for HUD foreclosures. Only a few agents are savvy to the San Diego HUD foreclosures at this point in the game. And yes, I work with a HUD-certified broker, so contact me to get the latest!
Furthermore, San Diego HUD foreclosures have a quick turn-around on answering- usually within 24-48 hours! This sure is better than the long months buyers and agents can wait when placing offers on short sale properties. Even regular forecosures have a hard time beating this turn-around.
Oh yes, and the paperwork. One of my favorite parts! The paperwork on a San Diego HUD foreclosure is minimal. Only a few pages and you're done.
Now do beware.
First. There are no warranties or TDS on San Diego HUD foreclosures, just like any other foreclosure. Buyers and their agents must make sure that they do their due diligence on inspecting the property. No repairs will be made.
Second. Although the properties are already FHA approved, buyers cannot use downpayment-assitance programs like NEHEMIAH when purchasing San Diego HUD foreclosures.
Third. The credit towards closing costs is a maximum of 3%, not 6% like standard FHA loans. So there is still a good chance that buyers will have out-of-pocket expenses with San Diego HUD foreclosures, but they will certainly be minimal in most circumstances.
So where does one find such great information on San Diego HUD foreclosures? Here it is: http://www.HUDPemco.com. From there you can look at HUD foreclosures in San Diego or other parts of California or elsewhere.
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