Congratulations! You won the bid. Now panic. There are a lot of rules and regulations and all the paperwork must be completed in a timely fashion and completely correctly. This is truly where having a knowledgable real estate agent is going to help you. Find someone who has been through the process more than once or, if you have an agent that you really love, make sure they have someone in their office who can walk them through the process.
After winning the bid you will be required to fill out the purchase contract in full and have it sent back within 48 hours. HUD will then review the contract to ensure you haven't made any mistakes. Make sure that you sign the forms with your full legal name including your middle initial each time you sign. That and remembering the actual date was much more difficult for me than it should have been. In my defense, I have an extra last name that I never use and haven't signed anything other than a receipt in a long time. They get to take as long as they want. This is the hurry up and wait thing I was talking about.
I'm still a little unsure about the accuracy of some of the information I've gotten through our realtor so please make sure that you check with a professional but this is what I've been told. The contract says that you have 45 days from the initial acceptance of your bid but we have been told that we have 45 days from the day we received the signed contract back from them to close on the purchase. Our goal is to close as soon as possible but I'm a little concerned that this question of the date is going to come back to bite us. You are given 15 of those days to do a home inspection and if something comes up on the inspection that you cannot live with you can get your earnest money returned as long as you back out within that 15 days. If you wait too long you will lose your earnest money.
The inspection process for a HUD home is a little more challenging than it is for buying a normal home. HUD homes always have the utilities turned off and they are winterized from October to May. You absolutely must get authorization from them to have the utilities turned on before you schedule the utilities. Then you may schedule the utilities and your inspection. This means you are paying deposits and fees for all utility companies plus the amount you pay for your inspection. Some buyers will choose not to get an inspection but as an owner occupant, I want to know what I'm getting into and am not yet confident enough in my abilities as a do-it-yourselfer to forego a professional inspection. You are buying this home AS IS so don't get in over your head.
We had a small snafu which turned out okay but led to a lot of frustration on my part. We were told by our agent to go ahead and schedule everything. Then we were told at 10 o'clock that night to cancel everything that had been set up for the next day because we didn't have authorization. When I read the authorization form I learned that we could have lost our earnest money by jumping the gun. It was annoying but not the biggest thing in the world. So one day I called and set everything up, the next day I cancelled and we got the authorization, the next day I set everything up again, and today we finally had our inspection.
Thankfully, there were no big things that came up in the inspection that were enough to scare us away. There are so many little things that I can't even remember them all but most of it was stuff we had already seen and we shouldn't need to call in professionals for most of it. I'm so excited to share pictures and plans with you but I don't want to share any photos until we've closed. Stick with me through the rest of the process. We will be contacting our lender tomorrow to get the appraisal scheduled and hopefully they'll help us get closed quickly. We didn't want to pay for the appraisal until we knew for sure that there was nothing on the inspection report that would prevent us from completing the purchase. Ultimately $450 is a drop in the bucket but it's still a lot to shell out if you don't need to.
Okay, next time I'm going to do a quick run through of the inspection and problems we found. Then there shall be a gigantic list of things we want to do with the house. There are so many decor choices that we just don't agree with and I will be so happy when they all get the heave-ho.