At Tropic Shores, we list many HUD homes. The buyers need to be made aware of the potential expenses associated with this and the steps of purchasing a HUD home. It can be a bit complicated.
First, when a contract is submitted and accepted, they send us the contract with the addendums, as well as what the commission is. The listing agent does NOT set the commission, HUD does. HUD looks at the contract and wants to see what their "net" is. They include the commission because it is an expense to them and after that amount is taken off, they get their "net". They usually charge the buyer for doc stamps and title search (which is not customary in an arms length transaction). This fee could be upwards of $1,000. The minimum commission is $2,500 and it is shown on the contract. If it is a higher priced house, it is usally 3% of the sales price, again, they look at their "net" to make their decision.
We then wait for the Asset Mangement Company (and there are several) to ratify the contract and that is when the "effective date" begins. One company has the closing date 30 days after ratification; another 45 days. We do not know which company is assigned until we get the contract. At times I feel the buyer doesn't think we know anything, but actually, it is out of our hands.
If the contract is accepted, and you are an owner-occupant, you get an inspection period and if you find something wrong that is NOT on the Property Condition Report (which you get prior to the contract) and you have a licensed person proving it, then you will get your deposit back if you decide not to go with it. If you are an investor, you have to do your due diligence prior to the contract because you will NOT get your deposit back. Another fee to the buyer is to have the electric turned on for inspections and this is in the neighborhood of $150.00. Your home inspection is between $250-350 depending on the size of the house and approximately $45 for a termite inspection.
Please review with your agent your potential costs before proceeding as we want everyone to be happy with our service!
Elsie Kempsey & Julie Ludovico
Team Tropic Hernando/Tropic Shores Realty
"Don't Let The Sun Set On Your Dreams"
