Q:

How can you buy government foreclosures?

A:

Quick Answer

To purchase a government foreclosure, buyers need to contact a HUD real-estate broker with experience in brokering property sales with the Federal Housing Administration, Veterans Administration and Housing and Urban Development. These agencies only accept bids from buyers represented by a HUD real-estate broker.

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Full Answer

Real-estate brokers approved by HUD advertise their services online and in local newspapers. These brokers have access to local Multiple Listing Services that advertise government foreclosures. Buyers should carefully research available properties and surrounding neighborhoods before submitting any offers. Property-listing prices are determined by the current fair-market value and are non-negotiable. Also, these properties are sold "as is," which means buyers cannot ask for a price reduction for existing damage or to cover the costs for repair. Buyers are encouraged to pay for a home inspection prior to purchasing the property to get a better idea of potential repair and maintenance costs. When submitting an offer, buyers can request that the government agency overseeing the property pay all closing costs and broker commissions.

Buyers must show proof of mortgage pre-approval or the ability to pay cash when submitting a bid. The approval-process time varies based on the number of bids presented. Upon acceptance of an offer, foreclosed properties remain in escrow between 30 to 60 days.

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