I generally do not sell/buy foreclosure properties.   Luckily, I work with clients and in areas that have very little of these types of properties for sale.   As a control freak agent the normal type of sale that I deal with allows me a lot of involvement in the process and a lot of control over it.   The best thing about having a real estate agent – and the biggest thing your commissions pay for is having someone knowledgeable managing the process for a buyer or a seller.   We know the deadlines for inspection, for negotiating, for survey and loan commitment.   We lose sleep over these much of the time.   But in the end we can call and get answers on any issue we face fairly quickly when we need them.   If we need an amendment to extend a deadline or change the contract in some way, we fill out the proper form and send it to our clients for signature – DONE!

Not so with the HUD foreclosed property.   This is the foreclosure that was probably an FHA loan at one time and the owner was unable to keep up payments etc.   Thus the federal government owns the property.    When it’s time for these properties to go onto the market, an agent/broker does list it on the MLS on behalf of the “owner.”   So when my client wants to see one of these properties and/or purchase one the real fun begins.

First, one must bid on the property via the HUDHOMES website.   Then, if you are lucky enough to win the bid you have 2 days to produce all the mountains of paperwork required to make the bid an actual contract for purchase.   No electronic signatures are allowed.  So there is a race to understand the paperwork, as well as meeting with clients to get “wet signatures” as they are referred to and submit to the agency managing the contract – which of course is different than the broker who put the property on the MLS and different from HUD itself.   So at this point you are dealing with three entities.   HUD, the agency hired by HUD to oversee the contract process and the listing broker.   Once the contract is received and ratified then the buyer has 15 days to get inspections and decide if they want to proceed at all.   Heaven help you if you have a question or need an amendment or any change to the contract!   You have to divine who to call to ask and in order for any changes to be made, an act of Congress is required.  For a control freak agent like me, this is a huge problem.    In the end, those who remain calm and persevere will win out on these properties.   They can be a great opportunity to buy low and realize instant equity after work on a property is completed.

I am writing about this because as I have recently gone through and am still in process with such a property.   I have been faced with the  reality of government involvement in any area is a problem.   Why so many people involved?   When I needed an amendment for Lead Paint Credit, one person sent me the form, but it needed to be sent to another person once filled out.  No one communicates unless you bother them.

To find out if an extra vacant lot was included in our purchase, I actually called HUD in Washington DC.  No one could tell me if it was locally….someone at the managing company finally produced the paperwork showing the extra lot was included.   Why was this not listed as part of the sale by the local broker?   Title shows the property as  separate address…Title needed it to be included …another amendment was needed for that.   We are getting through it.   But it’s so cumbersome and convoluted that it is maddening.

All I have been able to think about through this process is – why on God’s green earth would anyone want their health care managed in this way?   Why does anyone think this is a good idea?    Why do we want our health managed like the DMV?   Or HUD?   Our tax dollars pay for jobs within these agencies that are over lapping and seemingly not necessary.   It’s wasteful and appalling and it has driven the point home to me that private market entities are SO much better.  If a private company did its business like the government, it would be out of business in a year.  Or less.    Private markets might have their issues but at least the consumer as recourse if they have an issue.   Okay, I’m done ranting now.

I told my sweet client who is trying to purchase this property that we just need copious amounts of alcohol.   It will keep us calm and philosophical on the whole thing.    And at this point it’s my competitive streak that makes me so want this to work for my client and his family but also so I can say “We survived a HUD deal!”   We will drink to celebrate and I will have T-shirts made.  🙂