A little over a week ago I asked the readers of my newsletter to answer 5 short questions. I wanted to find out what reputation HUD homes have among our readers, and how they compared to other foreclosed properties, such as Fannie Mae, Freddie Mac, VA and regular bank-owned homes.
I launched the survey after several discussions with HUD asset managers and their desire to market HUD homes just like any other property. HUD has requested that listing brokers do not mention HUD home in their public advertisements and not to imply that they are distress sales.
Obviously, any buyer would figure out that they are buying a HUD home very quickly by the notes posted in the windows and by the way how offers have to be submitted at the HUD home store.
Personally, I never felt that HUD homes are inferior to any other property. Just the opposite is the case. HUD homes are excellent deals. At least 50% of them are located in the suburbs and need little or no repairs. I know this from experience. If you are a subscriber to our email newsletter you know that this is the case, as well.
Let’s look at what people think about HUD homes
Below are the 5 questions of the survey. I show the results in the form of charts. If you would like to see the data behind the charts, click on the table link at the end of each question.
HUD has asked its listing brokers to market their properties as regular listings. What do you think? [Table]
Is it a good idea not to mention the term HUD home?
92% say it is not a good idea
Should they disclose that it is a “foreclosure”?
92% say that HUD should disclose that it is a foreclosure
Are you more likely to look at a house not labeled as a HUD home?
only 7% are more likely to look at a house not labeled as a HUD home
What comes to mind, if you find any of the following designations in a listing? [Table]
HUD homes are labeled dark blue – 61% of respondents think a HUD home needs work
Please rank which type of home is the best value for your money! (1 – Best Value … 5 – Worst Value) [Table]
How would you rank the quality of the following types of homes ? (1 – Best Quality … 5 – Worst) [Table]
Please rank how cheap or expensive the following types of homes are (in your opinion.) (1 – Cheap … 5 – Expensive) [Table]
This chart shows that on a scale of 1 to 5 readers say that HUD homes are cheap (1.97 out of 5), they are a good value (1.79 out of 5), however, the quality of the homes is lower than the other homes listed in the chart.
In addition to the answers to these questions, we asked participants to write a comment related to the first question – whether to clearly identify a house as a HUD home in advertisements or not.
Below are 4 statements that reflect the feelings of our readers. You can read all 22 answers here!
“You have to be kidding me…then again, that’s the government for you: trying to deceive all of us.”
“As an investor I want to know up front if a listing is a HUD. There’s no reason for me to waste time on a new HUD listing if I can’t bid on it for 30 days. So finding out later is irritating.”
“Sometimes when people mention HUD home, they think “low income housing” but in today’s market, there is much more variety and this is a matter of just educating the public.”
“I believe that it should be disclosed. If they don’t want to disclose they should stop selling “as-is” and start taking care of those distressed properties.”
Read all 20 statements and let us know, if you agree by leaving a comment below this post.
Thanks for reading the susannenovak.com Blog!
Posted by: Susanne Novak, ABR, FIS, GRI
Columbus Real Estate Agent helping First Time Buyers.