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Answering HUD Questions: What is Repair Escrow?

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Real Estate Agent with HomeSmart Realty Group

Answering HUD Questions: What is Repair Escrow?

Before a HUD home is listed, it is inspected and appraised.  Any issues regarding the condition of the home are identified and a value is determined for the list price of the house and the estimated repairs.  The Repair Escrow is the result of this inspection.  When searching for an available HUD home property on the www.HUDHomeStore.com website, the Repair Escrow (if applicable) will be reflected on the property detail page.  (See sample below.)

HUD Homes

Additional information and a breakdown of the Repair Escrow can be found by clicking on the "Addendums" tab.  In the example above, monies are estimated for the replacement of rotting and missing siding, repair of copper piping at the furnace and electrical re-wiring.  Common repairs include: repairing/replacing drywall, repair/replace plumbing, mold mitigation, repair/replace bathroom tile and HVAC repairs/replacement.

Please note: HUD does not pay the repair escrow.  This is a cost to the potential buyer that will be included in their new loan.  It must be paid in order to purchase the home and make the appropriate repairs.  It is not included in the purchase price.

 

(HUD is the U.S. Department of Housing and Urban Development.)

If you are interested in learning more about HUD Homes or scheduling a showing of a HUD Home in the Metro Denver area, please contact The Foerster Team at (720) 530-5553.

Watch this blog site for available HUD Homes in Douglas County and the surrounding areas and additional information regarding HUD Home programs and purchasing HUD Homes.

What is a HUD home?

How do I search for HUD homes?

What are the benefits of registering on the HUDhomestore website?

How much information will I find on the HUDhomestore website?

HUD Special Programs

Who Can Purchase a HUD Home?

Should I Have My HUD Home Inspected?

Posted by

  

rich and donna

 

Rich and Donna Foerster

The Foerster Team

HomeSmart Realty Group, LLC

REAL Market Knowledge. REAL Service. REAL Estate.

Serving Metro Denver

www.TheFoersterTeam.com

720-530-5553 (Rich)

720-530-5554 (Donna)

 

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Comments (14)

Myers Jackson
Auctioneer, Texas Flip N Move - Grapevine, TX
America's Auctioneer

Hello Donna thanks for posting the information on HUD escrow, this is very important details at the closing table 

May 22, 2011 11:21 AM
Debb Janes
Nature As Neighbors - Camas, WA
Put My Love of Nature At Work for You

Happy Sunday Donna. Is the scenario you're talking about part of the 203K loans or do other programs also offer this? 

 

May 22, 2011 11:31 AM
Jennifer Prestwich
Henderson, Thornton, Broomfield and Westminster - Henderson, CO
Madison & Co Properties

Donna- GREAT post.  I did a post today about "Techtalk" and this fits right in with that.  We get used to talking about all of this 'stuff' and forget that the average consumer doesn't know it.  Love the clear, concise explanation!

May 22, 2011 11:35 AM
Judy Klem
Transition Stage LLC - Shelton, CT
Home Staging, Senior Move Management, Fairfield/New Haven counties

Hi Donna - Very informative and well-written post! I hit Suggest.

May 22, 2011 12:11 PM
Donna Foerster
HomeSmart Realty Group - Parker, CO
Metro Denver Real Estate Assistant

Hi Myers~ Purchasing a HUD home can be a complicated process. 

Debb~ This is outside of the 203k loan.

I'm going to go check out your post Jennifer!  It's so important for us to keep consumers informed!

May 22, 2011 12:12 PM
Donna Foerster
HomeSmart Realty Group - Parker, CO
Metro Denver Real Estate Assistant

Thank you Judy~ I believe it's my job as a professional to educate the public. 

May 22, 2011 12:27 PM
Teral McDowell
Referral Patners LLC - Murphy, TX

Good info, Donna, I should hone up on my HUD skills as they are always around.

May 22, 2011 01:19 PM
Donna Foerster
HomeSmart Realty Group - Parker, CO
Metro Denver Real Estate Assistant

Hello Teral~ You never know when you'll get the call to write an offer for a HUD home purchase!

May 22, 2011 01:24 PM
Jason M. Keith
Caliber Home Loans - Parker, CO
Equal Housing Lender

This is a great break down Donna.  I've done a few HUD homes and the ESCROW question always comes up! 

May 23, 2011 05:09 AM
Donna Foerster
HomeSmart Realty Group - Parker, CO
Metro Denver Real Estate Assistant

Hi Jason~ It is a fairly common question about HUD Homes.

May 23, 2011 05:14 AM
Pat Haddad, ABR, CRS, ePRO, GRI
Keller Williams Indianapolis Metro NE - Carmel, IN
Carmel, Fishers, Westfield IN Real Estate Expert

Hi Donna--I will just bet that even more than buyers appreciating this post---other agents will.    There is a lot to know to do a HUD deal and much of it gets learned 'on the job'.  You are a good teacher!

May 23, 2011 01:25 PM
Donna Foerster
HomeSmart Realty Group - Parker, CO
Metro Denver Real Estate Assistant

Thank you Pat~ That's the best thing about blogging, sharing good information and educating others!

May 23, 2011 01:28 PM
Dave Jaeger
Colorado Homes Team - Denver, CO
Dave Jaeger

Great info -  in the midst of my first HUD deal, not so pretty! I have a cash Buyer and was wondering if this escrow needs to be paid off to close out the transaction?

 

Thank you! :)

Sep 25, 2012 01:07 AM
Donna Foerster
HomeSmart Realty Group - Parker, CO
Metro Denver Real Estate Assistant

Hi Dave~ Not sure how that would be handled with a cash buyer.  That's a great question.

Sep 25, 2012 06:12 AM