What does the statement “HUD Guidelines 24 CFR 206.125″ mean in MLS Real Estate listings to Buyers?
If you are looking to buy a home and come across a bank owned property (REO) and you are told that the home is being sold under HUD Guidelines 24 CFR 206.125, make sure you understand what this means.
This statement will affect how the bank view’s your offer and your ability to negotiate a great deal is limited and in most cases, you will lose out on buying the home if you submit an aggressive offer on this type of property.
This “HUD’ language is disclosed on foreclosure listings where the home was financed using a reverse mortgage that ended up being foreclosed on.HUD regulates the terms under which these properties can be acquired, sold, and marketed. During the HUD Marketing Period (180 days), the seller (the bank) must follow the following terms as set by HUD:
- Cannot be sold for less than the current “As Is” appraised value established by the Appraiser.
- No repair reimbursements or allowances. Property sold “As Is” at the time of closing.
- No home warranties to be paid by the seller.
- Home inspections and connection of utilities for inspection will be at the buyer’s expense
- Seller will not contribute to buyer’s closing costs.
- All Earnest Money Deposits are to be in the form of Money Order, Certified Check or Personal Check made payable to Seller’s Title Company and delivered within 48 hours of contract signing.
While there are still some great deals out there, knowing upfront the HUD guidelines will save you time and disappointment.
If you are looking to purchase a home in La Quinta, CA or surrounding areas, contact Laura Lake today to get started, or visit www.LauraLakeRealEstate.com and start your search online.
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