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I posted this in the general real estate forum by accident; it's obviously more appropriate to ask here.
My husband and I are interested in purchasing a HUD foreclosure to rehabilitate and live in. We are not represented by a real estate agent but I called the listing agent on a whim to show us the house, and after the walk through we are seriously considering bidding on it. Is there any reason to hire a buyer's agent at this point? The listing agent is able to submit bids on our behalf, and since there is no real "negotiation" when it comes to buying a HUD home, I'm not sure what a buyer's agent's role would be in this kind of transaction.
I'm also interested in whether not having a buyer's agent will result in HUD accepting a lower bid, given the fact that the only real estate commission will be to the listing agent. If I'm understanding this process correctly, that means any given bid will give a higher net-to-HUD than it would if we had an agent needing to be paid commission. Do I have my facts straight?
My wife and I bought one back in Jan 10, we had a buyers agent, because we were looking at everything in the beginning...but found a sweet deal on a 5 br 3 bth HUD home, so we placed the bid lost, listed as a backup, the winner didnt submit the final paper work...and were the proud owners of a like new home... In your case I don't see how it would hurt ( using the listing agent to place bids) , if thats all your looking at are HUD homes..
It may be too late to get a buyers agent on this particular home since the selling agent may now have "procuring cause". The sale of HUD homes is based upon net and while there may be no negotiation as compared to a straight resale or REO transaction, a good buyers agent can structure the offer to best accommodate the buyer. The listing agent is representing the HUD management company. It is always best to have good representation of your own in any real estate transaction.
If I would be you, I would be checking EVERYTHING.. You're talking about re-habbing, do you live in this community? are you familiar with this particular municipalities zoning codes? Meet and Talk to the Inspector before you bid.. how much re-hab does it need? can you do it yourself?? Buying a foreclosure is different than a regular house.. Remember, Once you buy it,, You own it.. 1 thing more, Have a GOOD Attorney read your papers. Never Trust a Real Eestate Agent. They are not your friend, they take credit for what goes right, but if a problem comes around,, watch them scatter like **** roaches.. I have bought 6 foreclosures,, I use Agents,, and I have more problems than if i did it all myself.. The problem is I can't get the listings on my own.. Do Not forget... Real Estate Agents Are Not Your Friend !!!
I am in the process of purchasing a HUD home, and it has been a nightmare due to my supposedly "buyers" agent. She made a typo on the initial bid, told me it would be corrected, but never did anything. Now, the loan docs have been ready for over a week EXCEPT they can't get a corrected prelim report from title because of this error that was never corrected. This agent has no HUD experience, my fault for not being aware that agents could have no experience in something like that after 9 years. She has offered no guidance, I had to google it all myself. I dearly wish I had just gone thru the listing agent, who offers HUD training to agents and has knowledge. The buyers agent has already cost me hundreds in extensions, and is very rude an unresponsive to boot. Sorry for the rant, I am so frustrated, and wish I could go back in time and not have used her. So, in my opinion, don't bother unless you have someone very experienced that you are sure will help you. If that exists. Good luck.
You are correct in assuming that a buyers agent does lower the value of your bid. I think it goes roughly like this:
Listing agent: gets about 3%
Buyers agent: gets about 3%
Listing agent sells with no buyers agent involved: gets about 4%. Which means about 2% more cash to the offer. I may be wrong on this one.
These figures are rough.
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Bad agent
