Don't Let Ignorance Turn A HUD Home Into A Dud Home
There are many good deals out there on preforeclosure, REO, and HUD homes. But not all are great deals, so it pays to be prepared during your home search.
HUD homes, or homes that have been foreclosed from VA or FHA loans and are now back on the market, have some things about them that may not settle well with certain buyers.
But if you are patient, know a good home inspector, and are willing to put some work and money into these homes, the the HUD home can be a good deal.
They are sold "as-is" in the truest sense of the word -- no guarantees, no repairs made (although there may be a small repair escrow on the property).
You don't technically have an automatic "out" with a HUD home, but generally they will give you back your earnest money if your inspector finds something bad about the home that HUD's inspector didn't find. Sometimes they will offer a contribution to an escrow for repairs, but it is rarely enough to cover what needs to be done.
So, be cautious, and listen to your inspector. If the "bones" of the home are good, and you are comfortable with the repairs that need to be made, you may have a great deal on your hands!