What is earnest money and contingencies on HUD homes?
The earnest money requirements are usually lower than a typical purchase (usually $500-$1000 depending on price), but there’s a greater risk of losing the money. If you’re an owner-occupant, you can get 100% of the money back for specific reasons with adequate documentation (i.e. unable to obtain financing despite good faith efforts).
Investors should be more cautious. If your an investor and they accept your bid/contract and you decide not to close, you’ll lose all of the earnest money regardless of reason. One exception, if the house is “insurable” and HUD determines you’re an “unacceptable” buyer, then you’ll lose 50% of the EM. Unacceptable means that your lender refuses the loan if financing.
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This entry was posted on June 3, 2011 at 3:32 pm and is filed under HUD Foreclosures, Real Estate. You can subscribe via RSS 2.0 feed to this post's comments.
Tags: Buying A Home, contingencies, earnest money, Escrow, First Time HomeBuyers, Foreclosure, HUD
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