HUD homes are FHA insured mortgage loans that go into foreclosure. HUD sells these foreclosures in a weekly auction using HUD registered real estate agents. HUD offers huge incentives to sell all HUD homes in their inventory. There is now a program for owner occupants that the down payment is only $100 dollars with some restrictions as per HUD guidelines. There are many other programs available for homeowners and investors. Police officers, teachers, and firefighters get the property at 50% discount in specific Miami real estate areas.

Steps for buying a HUD homes in Miami, Florida

Step 1. Finding a real estate agent ? You must use a HUD registered Miami real estate agent in order to buy a HUD home. HUD uses its own contracts and many different forms, addendums and disclosures that the Miami real estate agent must be familiar with.

Step 2. Finding a house ? HUD offers a weekly list of available homes for sale. All HUD homes are sold in as-is condition with no warranties. The Miami real estate agent will show the property, provide tax roll info and comparables of recent sales. No open houses are permitted.

Step 3. Placing a bid ? You must be pre-qualified and place an earnest money deposit before you can bid on a HUD home. The Miami real estate agent will work with you in preparing all pertinent paperwork in order to help you make your offer. All offers are presented online and are awarded to the highest bidder. HUD will pay up to 3% for closing costs if it is stated in the sales contract. Owner occupants only can bid in the original offer period and then it is opened for investors.

Step 4. Winning the bid ? The Miami real estate agent will inform you whether or not you are the winning bidder next the day. If you are the only bidder you win automatically, assuming your net to HUD is within the acceptable percentage. HUD will not publish their guidelines for the minimum price offers they will accept. All completed contracts and forms must be sent within 42 hours of acceptance. Time is of the essence.

Step 5. Obtaining financing ? The buyer has 45 days to close. Buyer can pay cash for the property or obtain financing thru an FHA or conventional loan. FHA has many incentives to qualified buyers. HUD will cancel the contract after the 45 days are up and you have not closed for whatever reason. An extension to the contract may be granted but it costs $375.00 per 15 days for sale price over $50,000. Usually only one extension is allowed.

Step 6. Closing ? The buyer may choose the bank or mortgage company and title company of their choice. You cannot make any repairs to the property before closing. The title company will notify HUD and buyer of the closing date with at least three days notice. Buyer must bring a cashier's check to the closing as no personal checks are allowed.

Buying a HUD home in the Miami real estate market is a complicated and detailed process. Be sure the agent knows all the procedures and rules of the HUD homes process as any mistakes made in the contract, forms and or deadline missed will cause your bid to be cancelled and given to the next bidder. The inventory of HUD homes has decreased dramatically in recent years since buyers were not getting FHA loans and were opting for conventional products instead. Recently the FHA loans inventory has picked up and the amount of HUD homes available for sale has been increasing. HUD homes are an excellent opportunity for buyers interested in Miami real estate to buy a home at a discounted price.