HUD homes are homes that have been repossessed by the lender (usually a bank) then purchased by the federal government. The good news is that these folks seem determined to get these homes resold and back into the hands of loving owners.
The paperwork has been lessened, and is in place ready to go. There are few special requirements for perspective buyers, although there are some for selling and listing agents. Brokerages must be certified, and agents must be trained and registered (this is of course in addition to our DRE license).
More good news: There is no long time period of not knowing whether your offer (bid in their terminology) was accepted or not. Have you ever suspected that the listing agent held you offer back because they wanted theirs to be accepted? That can’t happen with the HUD process. In fact, the listing agent has no say in the process.
Even more good news: Buyers who intend to occupy the home get first chance. Their bids are the only ones allowed for the first 30 days. Bids are held for the first 10 days. If 2 or more matching acceptable bids are present an electronic lottery decides which one gets the property. No price wars! If no acceptable bid is present new bids will be checked as they arrive. If, after 30 days, no acceptable bid has been made, the process is opened to investors et al.
We applaud this step towards fair and responsible handling of these properties. Will the banks follow suit? Time will tell…