HUD Home Question and Inspections - HELP?

Question

OK...   I found a home at hudhomestore.com  I had my real estate agent show me the home a few times.  This one has possibility.  I shot out my offer, they rejected but gave away the EXACT price of what it will take NET to them after agents been paid, etc.

I shoot out the next offer knowing that I will get it, however I do not know the 'professional' condition of the house as I have not had it inspected.  NO PROBLEM...  I've never bought a home without it being inspected.

But then, my agent informs me that they won't allow inspection after being accepted.  It must be inspected before my offer.

I pulled my offer, BUT is this how it works with HUD?  I could possibly be purchasing a 'Condemned' home who knows?  I obviously don't trust HUD now.

Account Closed · Answer

@Greg  H. Correct, the EMD is typically 1K, 10 days for inspection and 30 days for closing. I was hoping the waving of the inspection would of made it more attractive, but that did not work. Its all a learning experience :)

Account Closed · Answer

@Anthony Newbold Not so much they want you to, its something that they recommend you do - Form HUD-92564-CN so perhaps wrong use of words on my part.

I tried to wave the inspection on one property (prior knowledge of this property) and HUD still wanted the 10 day inspection period. So they really want you to get one done to protect your self. We could not inspect my current property that I bought through them properly (with a licensed home inspector) until the contract was ratified.

Hope that helps a little more.

Good luck out there.

Account Closed · Answer

I just went through this last week with HUD. An inspection was completed after the contract was ratified and we could not do one before then. The utilities were turned on after the contract was ratified and we had 10 days for the inspection. If any issues come up in the inspection you can then back out of the contract and get your EMD back. I think your agent may be miss informed. If I am not mistaken I believe HUD wants you to do an inspection on the property too.

Anthony Newbold · Answer

Chris, thank you so much, but you mentioned that HUD wants me to do an inspection on the property too?

I think that I am confused.

Anthony Newbold · Answer

On this house it just spooks me to some degree.  As for plumbing, I am sure it all needs replaced.  Every house that I purchase that has been foreclosed on and sat thru a winter here in the midwest, I simply assume to replace all of the plumbing.  Having the water turned on is good, but 90% of the time there is at least 1 leak and therefore don't discover the other 25 leaks.

The one thing about this home is that it's 90% remodeled.  I mean house built in 1890 with 100% drywall, including ceilings, brand new HVAC (heat pump), brand new water heater, bathrooms, etc.  Appears to be all new electric, at least the panel is.

The home has been lived in as the 'brand new' carpet shows some wear and stains.  What's the story on this home?  I just guess it's time to start knocking on neighborhood doors......

Greg H. · Answer

Chris- HUD has the same form/requirements/process for everyone on every property.  You cannot change the Earnest Monet amounts, the allowable time for closing or inspection periods.  No attempts to do so will put you in a better position to get a bid accepted

Wayne Brooks · Answer

As an investor, not an owner occupant, you can do an inspection, you simply don't get your EM back if you back out.

Terry Mewhinney · Answer

When I bought my rental from HUD six months ago, just remember if you put earnest money down and need to back out for any reason it is very difficult to get that money back, and yes make sure you do your due diligence, after they accepted my offer I found out that it was on a shared well, I should have checked that out myself but I took my agents word for it. It would have taken me about five minutes to check it out but I didn't, it wasn't that big of deal but it could have been. As for inspecting the plumbing, just depends on how old the house is, how long has it been sitting vacant, through the winter, what kind of water piping does it have, and what type of drain pipe does it have, just to name a few. If you have any questions on the plumbing let me know.

Greg H. · Answer

@Anthony

@Anthony Newbold

You agent is incorrect if you are talking about an inspection with the utilities on. At no time would you be able to do that with HUD before having a ratified contract.

The reality is on a HUD home in many cases you will not be able to turn on utilities even with a ratified contract as in many cases the property has known leaks or electrical issues therefore they will allow the utilities turn on at all....even for an appraiser.  Additionally, many cities may require an inspection by the city inspector who would require code upgrades which cannot be done before closing

You might be able to find an inspector than can use a generator and do a pressure text on the plumbing