Last February we received a call on a property that had been foreclosed on
by HUD (Housing & Urban Development). The buyer was looking to
purchase the house and rehab the property.
When we met the buyer, his thoughts were to purchase it and put
his daughter in as a tenant. This sounded like a great idea and after
looking as his 401k, a smart use of what money he still had in his account.
In Michigan the process to buy a HUD-owned home is similar to a number of states.
The offer is presented on line - if you are successful in your bid you have 24
hours to supply the paperwork to the attorney firm that is handling the process.
All went quite well and HUD accepted our offer on the property.
Now we wanted to do inspections. As is typical in vacant HUD properties, we
need to turn the utilities on to do the inspections. The local power company
would not turn the power on until an electrical upgrade was completed.
We called the attorney firm and they indicated another department in Arizona
took care of that. It would take a few days to get the quotes in to authorize
the upgrade. As it turns out, they need 3 quotes and the guy in Arizona only
had 2 approved contractors. After a few weeks of waiting we did our own quote
and called the attorney and asked if we could do the upgrade at no cost to HUD
and then do our inspections.
The answer: No, they would not allow anyone in the house that was not approved.
I went through the layers of management to get to a supervisor that indicated he
"was all over this" and he would make it happen. Another month of phone calls
and frustration finally got the bids in and received a call from another department.
This department indicated the bids were in but now they had to check with HUD to
see if they would do the work since all properties were purchased "as is". I asked why
they did not mention that we would not have the opportunity to do our inspections
before we had gone through nearly 3 months of waiting.
He did not have an answer but would get back to us.
Finally approved but the approved contractor could not get to the job for a while.
The buyer, totally frustrated by now, decided he still wanted the property. With
nearly 3 months of phone calls and lack of actionby HUD, he offered to buy
the home if they would give a credit at close for the electrical repairs.
The calls were made and the approval granted. FINALLY!!!
Now we have 3 days to get the home closed before the offer expires.
If not closed in 3 days, we would have to file for an extension of the agreement
which might cost the buyer because he had not closed in a timely manner.
We did close on the last possible day without too much issue.
Why do we do this?
Because the buyer is so happy! The Buyer's daughter actually bought the
home and has a mortgage from the parents so she can get the
"First Time Buyer Home Credit".
They are happily cleaning and preparing to move in to the home. The electric
is upgraded and the repairs are being completed.
The moral of the story:
In this housing market, buyers that never would have been able to buy can own
a home ------- if they have patience to go through the process.
**Having a parent or relative fund the mortgage is another option to a bank
mortgage.
The $ Benefits of the First Time Home Buyers Tax Credit
Buying with the 2009 First Time Home Buyers Tax Credit Video
If you have the patience to buy a HUD-owned home or other foreclosure
Home, please contact us at 1-888-240-1968 ext 0 or email us at:
Grand Rapids Ada Real Estate ~ Westbrook Realty
Copyright 2009 All rights reserved
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The authors of the this blog write about Grand Rapids Real Estate,
the Greater Grand Rapids MI area, and what it is like to live in
West Michigan. We believe: Grand Rapids is a Great Place to Live!
Westbrook Realty Grand Rapids MI Real Estate
Contact Terry 616-292-7263
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