Why HUD Homes are a bargain Todd: Hello and welcome to Todd Miller TV. I’m joined today with Sherwin Escanuela. Sherwin thanks for being here?Sherwin: How you doing? Thank you.Todd: Good. So I want to talk about HUD,

HUD homes. There is a lot of opportunity to make money and there are some supper flexible things when you buy a HUD home that you don’t have. It is like you buy a regular REO.Sherwin: Umm-hmm.Todd: So just like what is a HUD and what are some of the things that make it different and better for someone who wants to buy one?Sherwin: Okay, a HUD home is basically FHA.Todd: You got to be loud.Sherwin: Alright sorry about that. FHA loan that has been foreclosed on basically a service or a proposed in a home and send it back to HUD, FHA will then takeover the property because FHA does not foreclose but the HUD basically takes all the property in the markets.A couple of good thing s they do. One, for the most part they do an inspection of property so if you look at a HUD listing you can go to the website and actually tells you what they have checked and what is there and what is not there unless of course it is vandalism between the inspection but initially they are doing an inspection of property and the important thing is they also do it on appraisal owner property.Todd: So why is that important with if they done an appraisal? Sherwin: Two things, one if you are doing an FHA loan. You no longer need appraisal fore the most part unless it passes in a certain date but let’s say HUD did an appraisal on the property. Now you know the value. There is no guessing as far as comp is concerned in an agent doing a comp is an actual appraisal knowing what the value of the property is, is important to a lot of people.Todd: So if I go on the website and I see it is listed for 130 but the appraisal is 145. I kind of know and I do an FHA loan, they are not going to do a new appraisal, they are just going to use that one.Sherwin: Yes. For a certain timeframe I believe it is either 60 or 90 days. You can always call me and I can double check that, basically your lender will request appraisal from HUD and everybody is on appraisal, which saves you $400 to $500 right off the bat.Todd: Okay that is good.Sherwin: Yeah, there are definitely lots of positives and there is a lot of HUDs coming on the markets several hundreds and hundreds of HUDs in the market available for owner occupy investors, personal homebuyers.Todd: Okay so if let’s say that like what happens with a typical REO is you put in an offer. It takes you a week to hear back from the listing agent. They tell you to get available offers you got to go back with your highest best and then you got to go through this dance, right?Sherwin: Umm-hmm.Todd: Is it like that with the HUD?Sherwin: No HUD is very simple. It is an online bidding process. There is a deadline and if it is says the deadline is tonight at midnight by 12 o’clock specific standard time tomorrow, it is a yeas or no.Todd: Okay.Sherwin: Where they will tell you who won the property and who won the bid if you are the winning bid or not. You don’t know what if there is multiple offers you don’t that stage is put your best foot forward and if you win it there is no going back. Basically they are going to email your agent a contract and say, “Here is the contract” Send us all the the information, send us the contract overnight everything to us and boom you are under contract.That is literally it is like dealing with the regular seller and there is no emotion involved unless an agent has no control, does not see your offer, won’t you know give the offer to somebody in their office or a friend of theirs it is blank bidding.Todd: So they are not going to go hey we just gotten off for 130 and so if you got a better one lets slide that in and beat out these people?Sherwin: Exactly, and they have no idea what you are offer is. It is all online. It is blank bidding. And so it controlled somewhere not by the real estate agent, it is the black and white. There is no if, ands or buts, if you ask for 3,000 enclosing cost and the other person asked for 2999 you win by a dollar that is just how it works.Todd: Okay what would be another advantage to a HUD okay so you don’t have to pay for an appraisal, we have the simple bidding process like what it like to I would think that would be enough for most people are there any other like advantages?Sherwin: Then they have rule pretty filed up you can just copy the contract you are going to be for you submit a bid, a lot of times these properties because they have an appraisal you will see this when your properties are below market value already and they are going to sell it. Now advantages it is as is whereas if any repairs have pop up in the middle of your contract unfortunately that isn’t when they get a body to hug basically says well you can back out and then they will remark at the property again with that particular condition at though disclosed and you can either try to rebid or bid for a lower price or try to get it again or go through with the contract if they repairs as is.And also if there is repairs required HUD a lot of times already have repairers go set up basically saying okay here is our offer and it looks like you have an estimate for $1500 for a water heater. It is going to be an Escrow so it closed out. That is pretty simple and there is lots of homes and for those who are tired of the dance of waiting a week and a half two weeks, three weeks sometimes I have had clients who mean the bank is literally sending me addendums and the next time send me multiple offer notification.And you are like “Wait a minute I thought I had it accepted?”Todd: Right.Sherwin: In a HUD that doesn’t happen. They send you an Addendum and you sign it and you send it within 24 hours that is part of their rules. It is not like anybody just can submit enough of the day that you got yours accepted and in the midnight or if it is a deadline that is a deadline. No other way you can submit it an offer. No way around it.Todd: So it is a little cheaper, there is more certainty.Sherwin: Yup at this point more variety there is just hundreds of them.Todd: Oh okay, so one thing though that most people don’t know is you have to have a real estate agent. You have to have an agent you can’t just try to do it without the agent for whatever reason.Sherwin: Good for me, good for an agent Todd: so if somebody wants to like look for HUDs and have you help them what— how do they get in touch with you? Sherwin: Call me 702-219-5582 I answer my phone all the time I will definitely set you up the right way between HUDs and whatever type of phone you are looking for and again it will tell you I can tell you right off the bat, they have investment properties so those looking into investing HUDs instead of playing the game and taking you if you don’t trust your agent with cops on appraisals sitting right there on the website. You can look at the appraised value and see what kind of offer you want to submit in that property.Todd: So you will know right off the bat there is he is the appraisal this is the list price, you are going to get it and you are going to qualify for long basically as long as you qualified if property qualified.Sherwin: Exactly.Todd: Thanks a lot.Sherwin: Thanks a lot Todd.Todd: Awesome. That is the update for today and keep tuning in for our videos on HUD and other things going on the market place that are exciting and I hope to see you on another video.