Buying a HUD Home in Indianapolis
HUD Homes are a Good Value
HUD homes in Indianapolis generally represent a great value for the home buyer's. Since the inception of the $8000 tax credit for first time home buyers, HUD owned homes have literally been 'flying off the MLS active list', with many being sold in the first ten days. As we near the end of the time frame for first time home buyers to receive the tax credit, REALTORS® in Indianapolis are witnessing a surge in activity and prices of HUD homes.
Why the sudden interest in HUD homes? Although HUD doesn't go in and repair the homes they own, many of their homes are in much better condition than bank owned homes. They do inspect the homes and often offer an insured escrow amount for repairs. There are those which are uninsured and need more work, but for the most part, HUD homes are a good value.
There are a few reasons for the rising interest in HUD homes.
- They are becoming more scarce
- Home buyer's are realizing the value
- HUD appraises their properties before listing them
- HUD homes are priced conservatively
- HUD homes are generally in the lower price range
- First time home buyer credit
Basically, it's the law of supply and demand. Since HUD owned homes are the result of foreclosure on an FHA insured loan, they represent a lower price point, which is attractive to first time home buyers and fits within their budget guidelines. The flood of first time home buyers has quickly depleted the supply of HUD owned homes.
The surge in activity has many Home buyer's in Indianapolis bidding higher on HUD homes hoping their offer will be the one accepted. There are pros and cons to bidding higher than the accepted price, though. As previously mentioned, HUD appraises their homes before listing them, so the price they list at is the highest price they will allow to be financed.
If you over bid on a HUD home, you will be expected to pay the difference between the listed price and the accepted price, or you will have to get a new appraisal for the purchase amount. If you win the bid and get the appraisal, though, you have most likely found a good deal on your home. Another positive result of the interest and over bidding of HUD and bank owned homes is the price point for the neighborhood will increase.
If a buyer offers and pays $105,000 on a home listed at $97,000, the recorded sale price will be the higher amount. This is the type of activity we want to see in the real estate market. I hope it doesn't end when the first time home buyer credit expires.
Copyright © 2009 by Paula Henry, All Rights Reserved. *Buying a HUD Home in Indianapolis*