HUD Articles

Misconceptions About HUD Homes and Value

A common belief instilled historically about making lowball offers when properties are REOs or foreclosures has long been perpetuated on popular Real estate TV programs and advertised investor courses over the years. This has resulted in the common misperception that REOs or distressed properties in general can be bought for pennies on the dollar.

Many Realtors and their buyers often believe that an REO seller such as HUD is unaware of property defects and that they may not have been considered when determining the price for market placement. The agents may tend to advise their client knock off significant amounts from the list price to adjust the perception of value. This strategy may be less than successful in a seller’s market if an un-realistic perception leads to a series of lower than list, rejected offers and a frustrated buyer.

What we want to share with you is... Yes, we understand. HUD properties are placed on the market at fair market value as determined by an appraisal. Property defects are noted and factored into the list price. The current local market drives the sales price. Knowing the market has helped many agents see that careful consideration has been taken to offer HUD homes at market driven prices. An offer closer to list price is much more likely to be accepted than a lower one with unrealistic expectations.

The savvy buyer advised by their agent understands this and may have an advantage as they are more likely to be successful in their bid for home ownership.  Best wishes to you in your journey to homeownership! We are here to help!