The Costs in Buying a HUD Home
There are costs in buying a home. Its not just the cost of the purchase price. Here are some of the costs involved it purchasing a home. But keep in mind that with a HUD home the costs maybe lower than purchasing an other home.
A down payment is a percentage of the purchase price of the home, this must be paid with cash. Typically the down payment is three percent of the the purchase price of the home. You can receive a family gift of cash for this amount, this is aloud.
Closing costs are the fee’s the lender will charge for servicing your loan. The closing costs can add up to be 3% or 4% of your home. But if you buy a HUD home these costs can be paid by HUD; if this incentive is offered by HUD and if they are specifically requested, by dollar amount, in the bid offering. When buying a HUD home; HUD would pay many of the expenses; like closing costs and real estate commission. For your information the closing costs and sales commissions are deducted from the bid amount in making the decision as to which offer brings the greatest return to HUD. Since bidding is competitive, you may in order offer a more competitive bid, and pay your own closing costs. This would make HUD’s net return greater making your bid more favorable and increasing the likely hood that HUD will accept your offer.
Commission’s are paid to the broker by the seller, and usually in the amount of 6% or 7% of the cost of the home. When you buy a HUD home, the selling agent’s commission is usually paid by HUD.
Before you buy you should get a professional inspection, even before you make a offer. HUD homes are sold “As Is” condition, so a inspection is very important. Therefor be sure of the condition of the home before you submit your offer.
Closing day will probably be one of the most exciting days of your life. But that day will seem like you will be signing a endless number of forms. The closing agent will go over each one with you. At the end you have a home!