What is a HUD home?
A HUD (housing and urban development) home is a 1-4 unit property that that went through foreclosure that was FHA-insured. When HUD becomes the owner, then it is listed for sale with a local broker. If the foreclosed property was insured by Fannie Mae or Freddie Mac, then it will be listed elsewhere.
You can search HUD homes for sale at HUDhomestore.com or you can usually find them listed on agents and broker websites listed as a "foreclosure" or "REO" (real estate owned or bank owned).
"I heard HUD homes are a money pit"
You may be wondering, "what kind of condition are these homes in?" As you can imagine, most HUD homes are just like other foreclosures and they probably need some repairs done. Some homes are like this moldy mess and other's are actually in very good condition, needing only paint or a good cleaning. However, it's probably best to budget for having to do some repairs, paint, and replace appliances/mechanicals. If you think about it, the previous owner was no longer able to stay current on their mortgage, which means that they probably didn't maintain the property as well as they should have done.
Other things to know about buying a HUD home
The buying process for HUD homes is a little different than buying a traditional home in Wisconsin. First of all, the contracts are different than the normal state approved forms. This means that even savy home buyers may want to bring the contract to an attorney to review. In fact, all Realtors in Wisconsin use state approved forms and may not be familiar with HUD forms. Since these contracts are different, it takes a little more thought and attention to detail. Hence this is one reason that HUD requires that all bids for a HUD home MUST go through a HUD registered broker. And yes, Josh Lavik & Associates at Keller Williams Realty is a HUD registered broker. We have helped numerous clients with HUD homes. Let us know if we can help you!