realestatefla1
03-20-2007, 06:37 PM
For several weeks we`ve been studying the bidding on HUD homes for our clients.My general conclusion is that HUD homes are not intended to help those who it was originally intended to!
I learned the bidding process from a man that was involved in H.U.D. homes for 30 years. I know all about BPO`s, used to do them 10 years ago when I was starting out. As the market in Florida changed so did I.
It`s been years since we started looking at HUD homes and I must admit the system is antiquated and unrealistic. I`m going out on a limb here,most Realtors couldn`t care less about this part of our business, but it does exist!
That being stated, I started looking at HUD Appraisals and realized that there are huge discrepancies between the actual appraised vales vs the actual sales price or worth of the property.I studied several programs and was fascinated with what I read.
I came across the following: "Streamlined (k)" Limited Repair Program which states. Mortgagee Letter 2005-19 (ML 05-19) announced the Streamlined (k) Limited Repair Program to augment FHA's existing Section 203(k) rehabilitation program for less extensive repairs and improvement.
This Mortgagee Letter replaces in its entirety ML 05-19 and is designed to make the program more reflective of the desire of many home buyers and existing homeowners to improve their homes including making them more energy efficient. Increased maximum mortgage amount for repair or rehabilitation costs from $15,000 to $35,000."
All well and good, but if you`re placing these homes in the stratosphere to those who really need them,what`s the point?
I`m not an expert nor do I pretend to be in regards to housing throughout the country,I do know Broward,Miami-Dade,Palm Beach,And Marion Counties well enough to know that the bidding process and the appraisals that are involved are too high!
A home in Fort Lauderdale for example that is being bid today is a prime example. The home is a 2bed,1ba SFH built in 1963 and is 1013 Sf under A/C. The apprised value of the home is $203,000 and so is the bidding price. The major problem with this HUD home is that the actual value in the area is closer to $189,000 based on sales in the area for the last 150 days.
Again, what exactly is the purpose of the bidding process when a person who purchases this home for $203,000 or higher uses the "Limited Repairs" for another $15,000?
For almost the same money you can find a better suited home and in better condition than the HUD home.
How does this program help those who need it the most?
The actual repair reports indicates that there is roof damage and this home isn`t in the best of shape!
Currently,on the MLS there are 36 "Active Properties" in Fort Lauderdale that are priced similar to the HUD home.The square footage is larger the homes are in better condition and already refurbished. Wouldn`t it be more cost effective to FIX these HUD homes before they go out to bid?
How can people help themselves in these programs? Is it time to re-evaluated our HUD programs?
(http://www.floridalistforlessrealty.com)
I learned the bidding process from a man that was involved in H.U.D. homes for 30 years. I know all about BPO`s, used to do them 10 years ago when I was starting out. As the market in Florida changed so did I.
It`s been years since we started looking at HUD homes and I must admit the system is antiquated and unrealistic. I`m going out on a limb here,most Realtors couldn`t care less about this part of our business, but it does exist!
That being stated, I started looking at HUD Appraisals and realized that there are huge discrepancies between the actual appraised vales vs the actual sales price or worth of the property.I studied several programs and was fascinated with what I read.
I came across the following: "Streamlined (k)" Limited Repair Program which states. Mortgagee Letter 2005-19 (ML 05-19) announced the Streamlined (k) Limited Repair Program to augment FHA's existing Section 203(k) rehabilitation program for less extensive repairs and improvement.
This Mortgagee Letter replaces in its entirety ML 05-19 and is designed to make the program more reflective of the desire of many home buyers and existing homeowners to improve their homes including making them more energy efficient. Increased maximum mortgage amount for repair or rehabilitation costs from $15,000 to $35,000."
All well and good, but if you`re placing these homes in the stratosphere to those who really need them,what`s the point?
I`m not an expert nor do I pretend to be in regards to housing throughout the country,I do know Broward,Miami-Dade,Palm Beach,And Marion Counties well enough to know that the bidding process and the appraisals that are involved are too high!
A home in Fort Lauderdale for example that is being bid today is a prime example. The home is a 2bed,1ba SFH built in 1963 and is 1013 Sf under A/C. The apprised value of the home is $203,000 and so is the bidding price. The major problem with this HUD home is that the actual value in the area is closer to $189,000 based on sales in the area for the last 150 days.
Again, what exactly is the purpose of the bidding process when a person who purchases this home for $203,000 or higher uses the "Limited Repairs" for another $15,000?
For almost the same money you can find a better suited home and in better condition than the HUD home.
How does this program help those who need it the most?
The actual repair reports indicates that there is roof damage and this home isn`t in the best of shape!
Currently,on the MLS there are 36 "Active Properties" in Fort Lauderdale that are priced similar to the HUD home.The square footage is larger the homes are in better condition and already refurbished. Wouldn`t it be more cost effective to FIX these HUD homes before they go out to bid?
How can people help themselves in these programs? Is it time to re-evaluated our HUD programs?
(http://www.floridalistforlessrealty.com)