These sales
occur when a borrower defaults on a 'Government Backed'
loan on Real Estate. HUD\FHA
buys out the lender and aquires possession of
the property. Then HUD\FHA offers the property, to the
public, via a 'Sealed
Bid' process.
A previous
owner has usually paid a down payment and regular monthly
payments, for a period of time, before the property became
distressed! The
amount of money that HUD\FHA
will try to re-coup is usually far less than
the property is worth. Houses and apartment complexes
have been sold at
auction for up to 80% BELOW the actual value of the property.
Not only is
there an opportunity to make large sums of profit at
these sales, but if
you are looking for your first house, or to aquire some
rental property,
these sales may be your answer!
If you contact
the HUD office in your state, they will gladly
help
you locate these properties, because liquidating them
is what they do, for
viewing and inspection! A purchase offer, or 'Bid', are
handled by Real
Estate Agencies that have been pre approved by the Department
of HUD\FHA and
instructed on submitting a written bid on behalf of the
interested party.
Upon acceptance of the 'bid' offer, HUD
will
pay the Realtor Fees and
Closing costs!
The bid will
usually need to be accompanied by a $500 deposit to
show real interest in the property. (HUD
is now offering a $500 discount for
all accepted bids). If your bid is not accepted by HUD,
the $500 deposit
will immediately be returned to the unsuccessful bidder.
The money is put in a
'special' account by the Real Estate Agency with which
you are dealing with.
The 'money' never leaves the account until the acceptance\unacceptance
of
the bid offer. If accepted, the money never leaves the
account until a
'closing' date has been agreed on by you and HUD.
If the bid is
unaccepted..the money is immediately returned. If you
withdraw your 'Bid'
before HUD has made a decision
requiring the offer, you may forfeit your
deposit. If the Bid is accepted, closing can occur up
to 45 days of the
acceptance. Not a long time, but time enough to arrange
any needed
financing. If possible, financing should be arranged
before submitting the bid.
To find out
more about HUD\FHA foreclosures, call your
state HUD
office. They will be able to tell you the names, of the
realtors in your
area, that are approved to submit bids to The
Department of HUD. The
realtors will usually have a list of available property
in your immediate
area. HUD also publishes
it's available property listings in your local
statewide newspaper. It's listings mostly appear in the
Friday Edition.
It will include
a property description, sale amount desired, square
footage, location and a phone number for more direct
information. (Tip:
Offer only the amount you are willing to pay for the
property. HUD has the
power to accept a bid amount lower then the advertised
price of sale!)
The number
of properties that HUD has 'on hand' is very
large. New
Properties are added each week to replace the properties
that have been
sold. HUD wishes to keep its 'losses' low in selling
these properties, but
because of the amount of properties they have on file,
and MUST liquidate,
they do anticipate a certain amount of loss of their
asking price.
For information
on the VA (Veterans Administration) and its
foreclosed properties, use the same method to locate
it's properties as with
HUD foreclosures. Unlike
HUD\FHA,
there are many times you will be able to
'deal' directly with the VA.
The need for utilizing a Realtor, in offering a
bid amount to the VA, is
not necessary. The practice of offering a bid does
require knowledge in making the Real Estate offers. Where
HUD will pay
closing costs and Realtor fees, the VA
may not do so on your deal! You will
need to ask!
RTC
Sales
The RTC (Resolution
Trust Corporation) is an agency that was
established to liquidate the properties that was acquired
after the Great S&L
(Savings and Loan) crisis. It is so large, that it is
estimated nearly $5
Billion Dollars of Real Estate is auctioned off each
year. There well be no
end to these auctions in our lifetime! That is how large
this situation is,
basically not realized by the general public.
These bargains
are tremendous all across the United States!
Properties are commonly sold for as little as 50% below
the RTC asking
price. They just cannot afford the cost of maintaining
these properties.
(Not to mention the fact that 1,000's of properties are
continually being
added to their list!)
There are
several ways to aquire information about RTC
auctions and
sales. They are:
1.) Order printed
lists up-dated every six months by calling:
(800) 331-0600
2.) For a printed
list on specific geographic areas...call:
(800) 782-3006
3.) To obtain
this information on a 5 1/4 floppy disk for a computer,
call: (703) 748-4068
4.) If you
have a computer w/modum, you can reach RTC online by calling:
(800) 782-2990 for more information.
5.) For auction
sale information on RTC properties, call:
(402) 416-4200
(click on your preference)
Some New pages added on 4/17/99