There are changes coming to HUD home purchasing in Michigan that both first time home buyers and investors should take note of. Under the current HUD home purchasing procedures, when a new HUD home comes on the market, it is made available to purchasing by owner occupant buyers only for the first ten days.
To qualify as an ‘Owner occupant buyer' one must be willing to occupy the house themselves for at least a year. If they are not going to do that, then they do not qualify in this category of bidding. The owner occupant certification form that a bidder must sign if their offer is accepted reads clearly: "Warning: Falsifying information on this or any other form of the Department of Housing and Urban Development is a felony. It is punishable by a fine not to exceed $250,000 and/or a prison sentence of not more than two years."
During that ten day period, owner occupant buyers can review the property with a Realtor, have it inspected and place a bid. All bids are reviewed on the 11th day, and either a winning bid is selected, or if not, then the home becomes available for investor bidding daily until sold.
The new changes coming to HUD home purchasing in Michigan will be expanding the owner occupant bidding period to 30 days, with all bids reviewed after the 30th day. This change is going to dramatically slow down the sale of HUD homes for all buyers.
Imagine being a buyer interested in a house, and deciding to place a bid on it for full value on the 2nd day of this period, only to find that after waiting the entire 30 day period to find out if your offer was accepted to learn that someone else offered $20 more than your did and got the house. This is the potential heart break that is going to happen with this new system, as it already is going on now with the mere 10 day waiting period.
Buyers competing under the new changes coming to HUD home purchasing in Michigan are going to potentially face more heartbreak than success, and the bitterness will be compounded by the 30 day waiting period.
The 30 day period has an even greater impact on investors with these new changes coming to HUD home purchasing in Michigan. Under the current system, whenever a home price is reduced after not selling in the investor period, it again returns to an owner occupant bidding period for 10 days.
With this new change, it will switch back to a 30 day owner occupant period, which not only require considerably more patience for investors on those properties that overvalued for their actual condition, but also potentially extend the average days on the market for many of these HUD properties.
Other changes coming to HUD home purchasing in Michigan include the ending of the contract with ‘Michaelson, Conner and Boul' (MCB) and the responsibility passes to two separate new service companies for the State. Additionally the standard HUD key system will change to an electronic keybox system, which will offer more security and accountability for those showing the property.
The changes coming to HUD home purchasing in Michigan are scheduled to go into effect at the end of September. Whether these changes will occur as scheduled or be extended for an adjustment period remain to be seen, however, it is advisable for homebuyers that are interested in HUD properties to take advantage of the current system if there is a home they have interest in between now and the end of the month.
As a Realtor in Battle Creek, Michigan I worked with both first time home buyers and investors, and have sold many HUD homes over the years. My company is preparing to adjust to these new changes, and will be ready to help any buyers through the new process. To find out more about HUD properties in Battle Creek or the surrounding areas, contact me at my website: www.michaeldelaware.com
Looking for Southwest Michigan Real Estate? Just Call Michael!
He is your key to the best homes in the region!
2010 'REALTOR OF THE YEAR'
For the Battle Creek Area Association of Realtors
Copyright © Photos and Content by Michael Delaware REALTOR® All Rights Reserved
Read these books written by Michael Delaware:
(Click on these cover images to order!)
"Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover."
- Mark Twain