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A HUD home is a residential property that has been aquired by HUD through a foreclosure on an FHA-insured mortgage. HUD stands for Housing and Urban Development. Once HUD has the property they offer it for sale so that they can recover the loss on the foreclosure. HUD properties normally need some repair. Anyone can purchase a HUD home that is for sale by the U.S. Government but you must go through a broker or a real estate agent that is authorized to sell the HUD properties.

When you find a HUD home which you wish to acquire, your real estate broker submits a bid or an offer. There are offer periods in which HUD homes are normally sold, and at the end of this period all accepted offers are evalutated and the house is sold to the highest - within reason - bidder. Should occur that the home is not sold in the initial time, you can submit a bid before the home is sold, any day of the week will do, including holidays and weekends. After a bid is accepted, the real estate agent will be contacted in the next 2 days.

The Department of Veterans' Affairs (VA) acquires properties as a result of foreclosures on VA-guaranteed and VA-financed loans. For VA homes, you should have a real estate agent prepare the Offer to Purchase And Contract of Sale VA form. Your agent will submit your offer through the listing broker for approval.

A Real Estate Owned (REO) or a bank owned property is one that returns to the bank after an unsuccessful foreclosure auction. Usually, the amount of money owed to the bank is higher than the equity in that property. The bank will usually try to sell the property at the higher possible price, and will most often counter your starting offer.

Bank forclosures are not always the great deal they appear to be. There may be other loans against the property and there is the possibility that there will still be residents on the property after purchase. You should make sure to ask for an inspection period so that you get a chance to investigate for any potential problems as a bank foreclosure will be sold "as is".

Any offer you make should be based on sound facts. For example, compare the prices of other similar homes in the same area, and also take account of any renovation costs you anticipate. But avoid a "bidding war" since you may well end up paying more than the true market value. Finally, inspect the property and before you commit to any deal make sure the bank takes responsibility for any needed repairs.