HUD Home Purchase Nightmare
The First Nightmare
We found a home for sale by HUD that had a price reduced to $88,000. After putting in a few offer on the home and HUD accepted our offer for $69,000. After sending in all of our paper work to the bank and we had a closing date of June 20th it took later and got extended to June 30th.
This home needs a bit of work including a new kitchen floor, cabinets, molding, missing lights, water heater, plumbing, dining room floor repair, carpet missing in two rooms, skylight to nowhere, bathroom remodel, and the list goes on.
After a few week we find out we have to have the power on to get the appraisal done. Let me just remind everyone that HUD will do nothing to sell the home. So I call the electric company up to get the power on and I find out that I cannot get the power on till the county says it is OK because the power has been off for too long. So I call up the county inspector’s office for an inspection. The nice lady asked me how long the power had been off. To which I reply “I have no idea” (I had to say this a lot). The lady call up the electric company and finds out the power had been off for over 2 years. This to me is not good news. Then she tells me I have to get the septic inspected first before they can inspect the electric. Now I don’t know about everyone else but if the electric is somehow tied through the septic we have a very big problem. So I go to the county office to get the septic inspected only to find out I have to go to another office to get some paperwork first. So off we go. We get the paper work and return. “OK that will be $100 sir, call us we you have the lids off” the lady said. Much digging for a few hours trying to find the tank we discovered the tank is 24 inched deep. I will say we were very tired after finding the lids. On that note if you do need to find a tank underground you can drive a bar into the ground and it will make a thump when you hit the tank. If you move around you can find the edges before digging. Because the tank was more than 75% full we had to have it pumped for another $225 out of pocket. The septic inspector calls us and tells us everything looks good. I could not see how anything would be bad. They were only looking at the PVC that was 8 years old and PVC does not rot underground. How do you say money for nothing? Then the inspector asked me where the well was. My Reply” I have no idea, I was hoping you could tell me.” When we opened the tank part of the tank broke. Another repair to add to the list. So we get the tank finished and take the paperwork for it all the way down the hall two doors down from the last office. The lady in this office copies the paper from the last office and tells me it will be $60 plus $3 for using a credit card. I wish they told me in advance, because gas is much cheaper than the credit card fee. The following Monday I get a call telling me everything looked good on the electrical inspection. What were they looking for anyway? The Inspectors office informs me they will send in the papers to the power company that evening.
The next day I call up the electric company and they tell me they have no record of the paperwork from the county inspector’s office. So I think maybe I should try again a little later. A few hours later the power company calls me up and tells me they got the paperwork and will send someone out in the next day or two. The following evening I get a call from the power company and I am informed someone came out and took the meter back with them stating it was unsafe. I then go out to the house to investigate and discover five bee nests in the breaker panel. I go get some bee spray and kill the bees and remove the nests. Next I call the power company and tell them the bees are gone. The following day I get a call from the electric company stating the bees were not the problem. It turns out the installer put in the meter and could not detect voltage coming out of the meter. Back to investigating I went. I open up the bottom of the meter and discover a set of terminals below the meter that were hooked to nothing and a 2nd set behind the meter that connects to the meter. Back to calling the electric company I go. Now keep in mind, the lady on the phone most likely has never seen the inside of a meter hub. I tell the lady on the phone what is going on only to be informed that what I have is not posable, and the power has to come out the bottom and not the lugs in the back. So I explain what I have only to be met with much resistance. Then I am told by the lady that she will have the Foreman call me, to which I replayed, YES PLEASE HAVE HIM CALL ME! She then said she was marking the account as do not turn on till it is fixed. Three hours later I went back and the power was on…. Wonder how that happened. Next I went through the house and checked a few things to make sure the electric was working. Yep, lights work, AC came on. Next I turned the main breaker back off till I am able to fully check the electrical. I did not want to leave the house with the power on when it is posable there could still be a problem inside the home wiring.
Realtor as a Nightmare too
All this time My Realtor is trying to deal with HUD. First we send in a bid and wait... and wait... When we got turned down we put in another bid and wait... and wait... Plan on it taking a week for any reply. After HUD took our offer we had to sign more papers and turn them in. Some of the papers we had to send in a 2nd time. A few day after everything was send in HUD was happy. Then my Realtor got an email saying our contract would be canceled unless the paperwork was send it. So my Realtor send in by the next day. The next day my Realtor got the phone number of the HUD agent and started calling them. The HUD agent checked her email and said, yes we have the paperwork right here and we will continue. A week later my Realtor got another email saying, our contract would be canceled unless the paper work was send in. My Realtor calls HUD again to find out what it happening. Again my Realtor is told, “We have the paperwork right here and we will continue, but you have to send it in again from your personal email address and not your business email address.“ Right here I have to ask, Are the people working for HUD insane? HUD gets the same papers a total of six times through all this before they were happy. Then we have to make a change on the loan end that requires another papers to HUD and another week for them to reply. Then a 2nd change that take another week for HUD to reply.
In the middle of trying to get the power on my Realtor gets a call from the listing Realtor. One of the people living next door called asking about their items in their barn. Their stuff has gone missing. This is the same barn HUD listed for sale with the property. When HUD had the property preservation company clean out the house, HUD had them clean out all of the property including the barn, and here they were trying to sell me someones barn.
The Breaking Point
The property appraiser went out and looked at the house. The good news is the property was worth $125,000 after repairs. The bad news is the house does not qualify for the loan and we have wasted two months trying to buy it. Yes, that is correct an HUD home does not qualify for a HUD backed loan. At this point we have to restart the whole loan process. However HUD will not wait and requires $375 every 15 days to extend the contract and the process will take another 60 days. All because the home needs repairs that I already know about and wanted to do myself. Not to exclude the fact I also already told the bank about the repairs. The new FHA loan will require us to hire a contractor to do all the repairs at four time the cost of doing it myself. At this point we decide to start the process over because the home still has the value to support the repair cost.
The company changed from PEMCO to a new company. We have all the paper work and check shipper to the company the works for HUD. The papers were post marked on the 1st with overnight shipping. The papers were delivered on the 11th and our contract is now dead. All of our time and money wasted because, the shipping company took ten day to deliver an overnight package.
If I every try to buy another HUD home I will pay cash.