Hey guys, Sandy Curtis here with Berkshire Hathaway Bowen Realty in Hagerstown Maryland.

How are you doing today today?


Today I wanted to continue the discussion on HUD properties.

And what today's discussion is going to be is about understanding what their as-is means.


When HUD sells the property they don't repair them. Fannie Mae sometimes will go in and do a complete overhaul, they'll do what they need to do to get through an FHA loan type, but HUD doesn't do any of that.

HUDs properties come in a variety of conditions some are insurable. We'll discuss that at a later time, but with HUD they don't repair so they don't want anybody to repair the properties. There's a liability issue with it. So their properties are sold as is.

All right so what does that mean to you as a buyer or a buyer agent?

As is means, yeah, sure you can do the inspection and this is what we've done up to this point; so we know this is

wrong, ie the plumbing; but .... you can't repair the plumbing to do your home inspection.


So does that make sense? 

Basically you're not even allowed to scrape paint off of the wall. You're not allowed to paint a wall, you're not allowed to change the locks, you're not allowed to do anything physically that changes the property in any way.

There's no moving your clients items into the property before closing. Because they technically don't own the property. 

The buyers are allowed to do those home inspections because if you are able to get the electric on or the gas on or the

plumbing on, then you can do a more extensive search.

Homes that already have some damage to them and they're aware of it, you're disclosed up front. Those can go through special loan types like an FHA 203b or 203k depending on the amount of work that needs to be done to the property.

So I hope that explains a little bit more about what as is it is, because you  as a realtor could lose the ability to

sell a HUD property if you or your client goes into a property and alters it in any way. And that includes having

the gas company come back to the property and install a gas meter on the outside.

You and I probably wouldn't think that that is a physical alteration of the property but it is, it is a change. They moved the meter off before I  got the property so there was no meter.

When they called in for their inspections they physically install the meter. Can't do it.

So it can result and your buyer losing their earnest money deposit, don't want to do that. You don't want to do that a week before closing.

Certainly by any means if your client is trying to have a utilities turned on and your contract got extended but the client didn't call the utility company to say "hey don't turn the utilities on I didn't close on the house yet. It's not mine" Wait a week because, they go in they change it, the field services company or the agent goes through the property and does a final walk through for the client and they see somebody altered the house they have to report it and HUD can come after your buyer, cancel the contract and keep the earnest money.

Don't want to do that.

So you as a buyer don't want to do that. So don't do it !

Just don't go into somebody else's house and alter it without something in writing saying "hey you're allowed to go and it change my house."

Buyers don't start any repairs and please don't try to move into the house before you own it. It's not yours.

Agents you have to err.., accompany ,excuse me, agents you have to accompany your inspections. You have to be there. You have to be there for your buyers.

You can't just give the code out to your buyers and let them go walk around willy-nilly.

It's not your property, is it? You're not paying for insurance are you? Just keep that level head, common sense guys and you'll be good.

So HUD properties are awesome purchase.

It can be, depending on the amount of work that's needing they've done the property and whether that's what you're looking for. Or whether it's move-in-ready.

There's just so many options. Thanks for watching again, hopefully I covered something that you got a little bit of knowledge from or a nugget. Please comment, like, share, suggest items that I should be talking about.

Sandy Curtis, Berkshire Hathaway Bowen Realty, have a great day!