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HUD Fun

I was reminising about one of my favorite real estate transactions this morning. A dear friend's young adult daughter wanted to make the jump into home ownership and came to me for help. I connected her with a reliable lender and showed her the advantages and disadvantages of a few different homes. She chose a "HUD home," which is a home that had FHA financing that went into foreclosure. My first home was also a HUD home and was purchased for $56K and now has a market value of $325K.  It is not for everyone! Like any great investment, it involves risk. A home is like a spouse: "for better or for worse." Sometimes a foreclosure can be a great opportunity to update an under market value property and sometimes it can involve great unforeseen and unFUN expenses.  And the bidding is exciting and a waiting game. In this situation, I entered her bid to the HUD system, because I have the Registered Hud Selling Broker credentials. We then await a response. She was not the highest bidder, but we agreed to be a Back Up Bidder in case that buyer were to fall through. Because the HUD system is not fool-proof, I have to check the site regularly to see if there has been any change in the status, which would mean we might get accepted, at which time a very short time frame is provided to get ink signatures! 

As it turns out, that day came. I received an email at 8:04AM FOUR MONTHS LATER while in another state sitting at my grandmother's dining room table. My hands started shaking and my eyes got big. "Mamaw!! She got the property!! I can't believe it!!" And as my grandmother looked at me with no concept of the delirium that was setting in, I started making arrangements on getting the contract signed from two states away.  Fortunately, I had pre-written purchase agreement with tabs marking where the signatures were to go. I have never been that organized for an unexpected event in my life.  I directed my self-less Mother-in-Law where to go in my filing cabinet and coordianted a meeting with the buyer.  Certified funds for the Earnest Money Deposit were delivered and signatures obtained. Home inspections were scheduled. And the lender took it from there.  It was my first closing of the year and at $40K purchase price, to date remains one of the most rewarding of my career. To see my friend's child score such an incredible deal, accept the responsibilities of home ownership at such a young age, and to start building equity on the day of closing. The value of her home has quadrupled since then; she has married and had a child. Mamaw has passed on to heaven. And my first HUD bid for this year is four times the value of that one and has investors clamouring for it. At that dining room table, my grandmother just couldn't understand why I was so ecstatic. But I intend to never forget that moment. 

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