I Hold the Key -- the HUD Key. Seven Easy Steps to HUD Foreclosure Success in Illinois

Real Estate Agent with RE/MAX Alliance in St.Louis' Illinois suburbs 475.122155

Hud Foreclosures in Madison and St Clair counties in IllinoisHave you considered buying a HUD (U.S. Department of Housing and Urban Development) foreclosure for your first home or as an investment property?

If so, I literally hold the key to all HUD homes in St. Louis' Illinois suburbs. (Only HUD-approved real estate brokers and their agents are permitted to represent buyers for HUD homes. We are issued keys that unlock all of the foreclosure properties for our investment or owner occupant buyer clients.)

If you're interested in pursuing a HUD foreclosure, particularly in Madison or St. Clair counties and the communities of Edwardsville, Highland, Glen Carbon, Maryville, Collinsville, Troy, Wood River, Bethalto, East Alton, Alton, Granite City, O'Fallon, Fairview Heights, Belleville, etc., get in touch with me and we'll talk about the best way to achieve your real estate goals.

So how does this HUD thing work, Nancy?

If the home's owner has defaulted on a government-backed FHA loan, HUD will foreclose on the property and will then be the seller of record when the home is put back on the market.

Several companies administer HUD listings on behalf of the government. For Illinois, it's a group called HMBi. Go to HMBi's web site, Click on Illinois and then you can go to the page that will allow you to see what homes are available by city. Note that not all cities will always have HUD homes available at any given time.

All HUD homes are sold through an online bidding process. When a HUD property first comes on the market, online bids are accepted only from owner-occupant buyers -- those buyers who plan to live in the property -- or non-profit organizations (such as Habitat for Humanity) or governmental agencies that plan to buy and rehab the house for the betterment of the community. If the house doesn't sell in a specified period of time, HUD will open the bidding to investors.

Now that you know the basics, here are the 7 EASY STEPS TO SUCCESS you and I can follow to get a HUD foreclosure home under contract for you:

STEP 1: Find a Realtor. While you may look at the HUD houses online, only HUD-approved real estate brokers and their agents are allowed to place the bid on your behalf and work with you to complete your transaction with HUD. This is where my HUD keys come into play. I can show all HUD homes in our area to you

STEP 2: Get pre-approved for your financing. If you plan to use a loan to purchase your property you should get pre-approved before beginning to look at HUD homes. Why? Because HUD acts fast. Once a bid is accepted, HUD will place very strict time limits on its transaction, so it is critical that you are ready to immediately follow through to complete the sale. If you are a cash buyer, you must get a funds availability letter from your bank. (We'll discuss HUD-appropriate loans in another post, including the very nifty 203K loan that allows you to finance both the house and up to $35,000 in needed repairs.) Even if you're buying a conventional home instead of a HUD foreclosure, this is good advice. Always, always get pre-approved before looking at property.

STEP 3: Determine your real estate goals and discuss those goals thoroughly with your Realtor. Do you want a home that will be your residence? Or, are you looking for an investment property? Will you be fixing the house for eventual sale? (We'll discuss HUD's rules about flipping homes in another post.) Or will you be using it as rental property? When you are looking at the HUD homes in Madison and St. Clair counties online, think about the property's location, the materials used in its exterior construction (e.g., brick vs. vinyl siding) and its assessed value. Homes assessed at a higher value will have more of a financial up side for you after you've fixed the defects and brought it back to the neighborhood's standards. What you're going for is the lowest purchase price on a home the offers the highest potential value.

STEP 4: View HUD homes online and select those that meet your goals. If a home won't meet your needs, don't look at it. It will waste your time. (And trust me, once you've seen a few HUD homes, you'll see that it's not necessarily a fun process.)

STEP 5: Visit the homes that meet your needs in person with your Realtor. Be prepared. Many HUD houses are in bad shape. Utilities are usually disconnected, so bring a flashlight. Wear sturdy shoes (no open-toed sandals or flip flops) as there is often debris inside the house and sometimes unsafe conditions on stairs and floors. Bring a camera so you can take pictures of the homes you're considering. If you have a buddy who is a contractor, invite him to come with us. He can help you understand the costs of necessary repairs. (We'll talk about the specific items to look for in a HUD home in another post, but a short list includes electrical systems, HVAC, roof, windows, appliances -- if there are any -- siding, foundation, mold evidence, water damage, etc.) Note that many substandard condition items will be noted on property's online description. Here's an example from a home currently listed in Collinsville: "EVIDENCE OF POSSIBLE MOLD; EVIDENCE OF WOOD DESTROYING ORGANISM DAMAGE ON DETACHED STORAGE UNIT AND SUN DECK; REPAIR INTERIOR WALLS; REPLACE CEILING TILES." Don't let that bold face information scare you. Understand that it's great to know about some conditions in advance so you can make plans to deal with them while you're considering your buying decision. If this type of information bothers you, then you are not a good candidate to buy a HUD foreclosure.

STEP 6: Select your target house and decide what to offer for it. To give you an idea of what to offer, I will research what similar houses nearby have sold for over the past six months. It's also advisable to have a professional home inspection at this stage. HUD does not warrant the condition of the homes it sells and will not provide for the repairs of these homes, so it is important for the bidder to know what they are getting into in terms of the home's condition. Home inspections will cost anywhere from $250 to $450 in our market. Termite inspections are $30 to $40. Radon inspections are $150. And, depending on the home, you may want to consider septic inspections, well inspections, etc. And, yes, to answer a very common question before you even ask: if you decide not to buy the home, you are out the money you've paid for inspections. Consider it money well spent on avoiding a home that turns out to have more problems than you can monetarily or emotionally deal with.

STEP 7: Have me place your bid. If you are bidding as a owner occupant during the initial offer period, you will find out if your bid was accepted at the end of HUD's set time period. If you are bidding on a home that was not purchased during that initial phase, then it has entered what HUD calls an "extended phase" and bids are opened each day. If you have placed an acceptable bid, HUD will notify me within 48 hours and we will prepare a contract for your purchase of the property. Note that HUD pays the the buyer's broker's fees at closing, so my professional services during this transaction process are free to you. How's that for a nice bonus for you? Also, note that I will need to see your driver's license and have your SSN to process the bid. HUD will cancel sales contracts with buyers who have provided incorrect name or social security number information. If that bothers you, then you are not going to be able to buy a HUD foreclosure.

Questions about buying a HUD foreclosure in Madison or St. Clair counties? Want to know if there are HUD foreclosures in your target cities of Edwardsville, Glen Carbon, Maryville, Collinsville, Troy, Highland, Belleville, O'Fallon, Fairview Heights, East Alton, Granite City, Wood River, Alton, etc.? Call me at 618-791-8007 or send an email to 

I'll look forward to helping you find the right property and get it under contract as efficiently as possible.

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Enjoy life in the (618) area code in Southwestern Illinois, St. Louis' Illinois suburbs. SEARCH FOR HOMES HERE.



I help good people buy and sell good homes in St. Louis' Illinois suburbs, with special emphasis on the Metro East communities of Edwardsville, Glen Carbon, Maryville, Collinsville, Troy and surrounding areas in Madison County, Illinois.

Are you a teacher, firefighter, law enforcement officer, medical professional or active duty or retired military? Then ask me about Homes for Heroes, offering substantial savings on home purchases. Learn more at Homes For Heroes.

For more information or to search for homes, visit my sites at, or or send an email to me at Text or call Nancy Milton Holtzscher, your Edwardsville Realtor, at 618-791-8007 any time.

REMAX Preferred Partners is located at One 157 Center, Edwardsville, IL 62025, 618-791-8007 (direct) 618-655-1188 (office). We're easy to find on IL-157 in Edwardsville between Pasta House Co. and Shenanigans. Each office is independently owned and operated.


Ken's Home Team LLC. | 360.609.0226 | Portland, OR & Vancouver, WA Real Estate Team
Ken's Home Team LLC. - Vancouver, WA

Nancy, thank you for this great info.  we do not have many HUD homes around here but I am going to look into them.

Jul 11, 2010 04:37 PM
Ryan Shaughnessy
PREA Signature Realty - - Saint Louis, MO
Broker/Attorney - Your Lafayette Square Real Estate Partner

Nancy - Thanks for the thorough overview.

Jul 11, 2010 05:56 PM