Buying HUD Homes in Michigan

There are over 9000 HUD homes for sale in Michigan and 3800+ in the tri-county area of Oakland, Wayne and Macomb counties.  These figures and more were discussed by a representative from Michaelson, Connor, & Boul, Inc. (MCB) at a recent HUD seminar held at Realcomp II in Farmington Hills.  Facilitated by several local brokerages that list HUD homes in this area, the seminar further educated local Realtors on the process of online bidding for HUD homes, notification of winning bids, the inspection process, buyer incentives and more.

 For those that may not know what a HUD home is, basically they are foreclosures on FHA-insured loans.  When a lender submits a claim against the FHA insurance fund, the property is conveyed to HUD.  HUD then turns the property over to MCB who maintains and sells these properties in accordance with HUD guidelines.  Anyone can buy a HUD home but it must be done through a licensed broker registered with HUD (agent employed with a licensed broker).  All bidding in done on-line at the MCB website. 

Here are some basic things to know about HUD homes and the process of bidding.  However, it is best to contact a Realtor with experience in the process:

 Buyers must have a pre-qualification letter from a lender or proof of cash funds in the amount of or greater than the purchase price prior to submitting the bid

1. Owner/occupants may bid the first 10 days of listing a HUD home; they must certify they will live in the home for 12 months; and cannot have purchased a HUD home as a owner/occupant within the last 2 years.
2. Investors may bid after the owner/occupant period has ended and may purchase as multiple HUD homes as they want and as often as they want
3. Each Friday new listings are featured on MCB's website www.mcbreo.com and entered in the local Realtor's multiple listing service (MLS).
4. Homes can be viewed before bidding by contacting a local Realtor.  A link to a broker's office that is licensed to sell HUD homes is on the MCB website.
5. If a home is relisted or goes back on the market, there is a 5 day period for owner/occupant bidding before investors can bid
6. Daily cut off time for bidding is 4PM EST and bids are reviewed on the next business day following the deadline.
7. The highest NET to HUD is generally the winning bid which may not be the highest GROSS offer
8. Accepted bids are posted on the MCB website after 4PM EST under "Bid Results".  MCB also endeavors to notify the bidding agent of an accepted bid.
9. Completed original signed sales contract and addenda must be delivered to MCB within 2 business days of accepted bid.
10. A home inspection is recommended after contract is signed and purchaser has 15 days to conduct one.
11. Buyer must activate the utilities via a request form faxed to MCB for inspection
12. For defects not disclosed by MCB, a buyer can cancel the offer
13. Selling broker retains the earnest money deposit:  Minimum $500 for offers under $100K and $1000 for offers over $100K
14. For owner occupants, HUD will pay $2,500 in closing costs for offers over $25,000
15. $100 down payment financing is available on most owner/occupant offers if financed through FHA approved lenders. 

There are other benefits for owner/occupants.  For law enforcement officers, firefighters, emergency medical technicians and teachers have an opportunity to purchase homes under the Good Neighbor Next Door (GNND) program.  This applies to communities designated as "revitalization areas" and to qualify for the program, they must work in the area where they purchase.  HUD provides a substantial incentive in the form of a fifty percent discount off the list price of eligible properties.  However, when bidding on these homes, buyers must qualify for the full amount. 

For more information on purchasing HUD homes and qualified representation when viewing and bidding on HUD homes, please contact me.  I am well versed in the process including a market analysis of the area where a HUD home is listed, referrals for lenders, home inspectors and more.

Look here to find out more about property taxes in Metro Detroit or Market Analysis of homes SOLD in Oakland County and, upon request, any city in the tri-county area.

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HUD Realtor selling Real Estate in Southeastern Michigan.  TishHouse sells Houses - selling Oakland County Real Estate with RE/MAX Showcase Homes in Birmingham, Michigan. Helping People in a challenging market by specializing in Short Sales. See what my clients have to say about my extraordinary customer service.  Follow me on Twitter.