Buying a HUD or Foreclosure Home in Pittsboro, Chatham County, or the NC Triangle

If you're considering buying a HUD-owned home or a foreclosure property in Pittsboro, Chatham County, or the Triangle, here are some things you should know.

A foreclosure property is a home that has been repossessed by the lender because the owners failed to pay the mortgage. Thousands of homes end up in foreclosure every year. Economic conditions affect the number of foreclosures, too. Many people lose their homes due to job loss, credit problems, unexpected expenses, death, divorce, or illness.

It is wise to be cautious when considering a foreclosure. Many experts advise inexperienced buyers to hire a real estate agent to take them through the process. 

You can only purchase a U.S. Department of Housing and Urban Development (HUD) property through a licensed real estate agent. HUD will pay the real estate agent's commission up to 6% of the sales price.

HUD homes are sold "as-is", meaning limited repairs (or no repairs) have been made, but no structural or mechanical warranties are implied. It is important to have the house thoroughly inspected and to be sure than any liens, undisclosed mortgages or court judgments are cleared. Cindy Brudvik Davis is experienced in helping buyers purchase HUD homes and real estate, and can assist and advise you through the process.

There are two main avenues of foreclosure:

• Judicial foreclosure action is a proceeding in which a mortgagee, a trustee, or another lien holder on property requests a court-supervised sale of the property to cover the unpaid balance of a delinquent debt.
• Nonjudicial foreclosure is the process of selling real property under a power of sale in a mortgage or deed of trust that is in default. In such a foreclosure, however, the lender is unable to obtain a deficiency judgment, which makes some title insurance companies reluctant to issue a policy.

The U.S. Department of Housing and Urban Development (HUD) acquires properties from lenders who foreclose on mortgages insured by HUD. These properties are available for sale to both potential homeowner-occupants and investors. You can only purchase HUD-owned properties through a licensed real estate agent. Contact Cindy Brudvik Davis to find out if there are HUD-owned homes available in Pittsboro, Chatham County, or the Triangle, and for assistance in the purchase process.

If the property is eligible for FHA insurance, you may be able to purchase it for as little as $100 down. If it is not eligible for FHA insurance, the down payment on a HUD home is the same as the conventional market's, and can range from 5% - 20% of the purchase price.

Each offer to purchase a HUD property must be accompanied by an earnest money deposit equal to 5% of the bid price, not to exceed $2,000 but not less than $500.

The U.S. Department of Veterans Affairs (VA) also offers foreclosure properties which can be purchased directly from the VA often well below market value. This is because the VA guarantees home loans and often ends up owning the property if the veteran defaults. A VA-owned home may be purchased with a down payment amount as low as 2% for buyers who will occupy the home. Investors may be required to pay up to 10% of the purchase price as a down payment.

If you are interested in purchasing a VA foreclosure, contact Cindy Brudvik Davis to request a current listing. About 100 new properties nationally are listed every two weeks.

Be aware that VA foreclosures are also sold "as-is", meaning limited repairs (or no repairs) have been made but no structural or mechanical warranties are implied.

Trustee sales are advertised in advance and require an all-cash bid. The sale is usually conducted by a sheriff, a constable, or lawyer acting as trustee. This kind of sale can be very attractive to experienced investors.

Buying directly at a legal foreclosure sale is risky. It is strictly caveat emptor ("Let the buyer beware"). There is no financing; you need adequate cash. The title should be checked by a real estate attorney before the purchase, or the buyer could buy a seriously deficient title. The property's condition is usually not well known and an interior inspection of the property may or may not be possible before the sale. 

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Cindy Brudvik Davis, RE/MAX Southern Advantage, a full service real estate agent in Pittsboro, Chatham County, will work on your behalf to actualize your real estate and home ownership goals in the following NC Triangle towns and communities:

Apex (Chatham and Wake Counties)

Carrboro (Orange County)

Cary (Chatham and Wake Counties)

Chapel Hill (Chatham and Orange Counties)

Fearrington Village (Pittsboro in NE Chatham County)

Governor's Club (Chapel Hill, Chatham County)

Graham (Southern Alamance County)

Holly Springs (Wake County)

Morrisville (Wake County)

Pittsboro (Chatham County)

Raleigh and North Raleigh (Wake County)

RTP (Research Triangle Park)

Siler City (Chatham County)

Silk Hope (Pittsboro and Siler City in Chatham County)

Snow Camp (Southern Alamance County)

Southwest Durham County (near Duke University and the Streets at Southpoint)

UNC (Chapel Hill, Orange County) 

Cindy Brudvik Davis, Real Estate Broker/REALTOR

RE/MAX Southern Advantage

288 East Street Pittsboro, NC 27312

cindydavis@remax.net

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