HUD (the U.S. Department of Housing and Urban Development) has a steady supply of potentially cheap California HUD homes. The way HUD acquires these homes is by bidding on them at California foreclosure auctions. The agency buys these properties after they go into mortgage default on an FHA loan (FHA insures certain home loans throughout California). HUD has no real need to own these homes, so they turn around and sell them to members of the California public.
Those who would like to buy California HUD homes can seek to buy them either to live in them or invest in them for resale purposes. They must first find out how to locate HUD homes in California. After finding the homes, the prospective buyers then use a California real estate agent to place a bid on the desired HUD California homes. When the bid is accepted, the buyer purchases the California foreclosed property by paying off the bid at the home closing.
Step 1:
Nowadays, HUD has made it quite easy to find California HUD properties. All you need to do is go online to hudhomestore.com/HudHome/Index.aspx and look for the map on the home page. From there, you can find all HUD homes in California by clicking on that state in the map. This the best way to start your search.
Step 2:
Once you see the first page of the HUD California listings, you can click on the subsequent page numbers to see more California foreclosures. However, you can greatly narrow your search by using the advanced search features above the listings.
For example, if you want to find Oakland HUD homes that have 4 bedrooms but cost less than $200,000, simply enter that information into the search engine to get a smaller list of HUD homes in California that meet your search criteria.
Step 3:
Make a short list of homes, taking care to jot down the address of the property, home characteristics and listed price. Although you may be able to inspect the home later, you should first at least do a cursory inspection by driving by the home. Sometimes, you might find red flags, such as criminal activity and other problems. This could seriously affect the fair market value of a California HUD home if you are buying it for resale.
Step 4:
The next thing you need to do is contact a local California real estate agent that is approved to place bids on California HUD properties. Buyers cannot directly place bids on HUD homes for sale. Only approved agents may do this on behalf of prospective buyers. You can find a California broker on the same HUD site with the home listings (see above). Click “Find a Broker” from the home page to search for a broker that is approved in each area where you want to purchase a HUD home in California.
Step 5:
Seek financing help for your home. You can contact banks or other mortgage lenders even before you bid to buy a HUD California home. Lenders can give a preliminary preapproval letter that will be used as part of your bidding package when your California agent places a bid on the properties you wish to buy.
You now wait a bit of time to see if California HUD officials accept your bid. If they accept your bid, the agent then proceeds with the paperwork. A closing agent then conducts the closing. By that time, you need to speak to the California lender again to get final approval on your loan.
Step 7:
When you buy a HUD home in California, you should always demand a property deed. A California deed is filed with the recorder in the same California county where the property is located. This recorder is often, but not always, the county clerk. Check with the real estate agent if you do not know the location of the county recorder.
