HUD flaunts Georgia law by failing to disclose adverse material facts!

By
Real Estate Broker/Owner with Richard Weisser Realty

HUD flaunts Georgia law failing to disclose adverse material facts by Richard WeisserHUD recently announced that it will no longer provide copies of the HUD ordered appraisal to buyers of HUD owned properties that are under contract. That also means that repair escrow items will no longer be identified.

The new HUD requirement requires ALL buyers to have their own appraisals performed.

My guess is that HUD is hedging their bets by allowing more buyers to bid over list price for HUD properties. If a new appraisal can justify a higher price, so much the better for HUD.

Here’s the problem:

Georgia Law requires all sellers to disclose adverse material defects of which they have “actual knowledge.”

In my not so humble opinion, having an appraisal in hand is actual knowledge. If there are adverse material facts contained therein they must be disclosed under Georgia law.

 

HUD is a seller. Sellers must follow the rules.

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Ambassador
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Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

I haven't sold a HUD house in years.  But this does concern me.  If they know they do have a legal obligation to disclose

Aug 07, 2014 03:40 AM #1
Rainmaker
3,985,569
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

I stay away form HUD homes if possible.  but this is just like the big banks who pull the same3 bull.

Aug 07, 2014 02:31 PM #2
Rainmaker
737,879
Peter den Boer
Atlanta Communities - Woodstock, GA
MBA,GRI, Associate Broker, Realtor

Richard - Yes, but we all know the government can play by their own rules anytime they want to...or by none at all.

Aug 07, 2014 10:36 PM #3
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Jim Crawford
Maximum One Executive REALTORS® - Atlanta, GA
Jim Crawford Atlanta Best Listing Agents & REALTOR

Richard Weisser - I recently showed a really distressed HUD home and I feel it was priced way over market.  I did not see any value in it at all for owner occupied or for any investor.  In fact I felt the home needed so much work that no one in their right mind would buy it considering that you could buy any resale home in much better condition + improvements for less money.  

Aug 08, 2014 12:08 AM #4
Rainmaker
1,254,450
Christopher Lotte
Red 1 Realty - Lithopolis, OH
Central Ohio Realtor, 614-390-9243

Richard, great info you have there...

yeah, Seller must follow the rules, and so with buyers too coz we ain't got a choice.

Aug 08, 2014 10:51 PM #5
Rainer
229,497
Athina Boukas
Virginia Capital Realty - Richmond, VA
Certified Residential Specialist (CRS)

It should still be the listing agent's responsibility "if" any adverse info trickled down to them.  Years ago, in NC, we discovered termites in a HUD home and canceled the deal because the offering price did not consider that negative aspect. (It was missed in their appraisal/repair escrow).

HUD seller wouldn't re-negotiate or fix it because it was a CASH offer.

The listing agent had to re-list it, and added the termite disclosure right on the MLS listing.  We went back a month later with a 25% lower offer and it was accepted.

They would have netted more $ if they had identified it with repair escrow, or fixed it, or adjusted the price during our offer.  

 

 

Aug 09, 2014 12:00 AM #6
Rainer
205,015
Ted Glover
Alderman Classic Realty, LLC - Moultrie, GA
ABR in Moultrie, Georgia 229-854-5422

I agree hold their feet to the fire. All "sellers" must disclose. It's That Simple. Thanks Richard, have a great week.

Aug 10, 2014 02:18 PM #7
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