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Disclosure of the Purchase of a HUD Home through Eagle, Realtors

This is a disclosure, intended to disclose some of the facts and conditions that may apply to the process of purchasing a HUD Government Owned Home.  You should also review the HUD sales contract and all of HUD's addendums prior to the purchase of a HUD Owned Home.

    All Agents and Brokers associated with Eagle, Realtors have signed and agreed to abide by the terms and conditions of the VAMA (Voluntary Affirmation Marketing Agreement), and will abide by its rules and regulations. We abide by the Fair Housing Act of 1968 as amended and will not discriminate against or give preference to anyone on the basis of race, color, religion, sex, handicap, familial status or national origin. This law does not allow us to discuss any of the above items with you. Please do not ask us to violate the law, as we will not.

    The seller pays all of the commission on the sale directly to the broker on all HUD Homes. Any Agent and or Broker that is helping you in the purchase of a government home is an agent of the Seller (The Government) unless you have a separate agreement to represent you.  See the Texas Real Estate Commission (TREC) Agency Disclosure Form known as the "Information about Brokerage Services Form" included in the contract package.  We will treat you fairly and honestly in the transaction and assure that the transaction goes smoothly.

    The seller is a Federal Government Agency and according to Federal Attorneys is not required to comply with the State of Texas Disclosure and furnish prospective purchasers with a Seller's Disclosure. A Seller's Disclosure consists of acknowledging defects, certain deaths on the property, previous defects that have been repaired, previous termite treatment, etc. this is normally required to be filled out by the seller, and acknowledged by the buyer before an offer is accepted. HUD doe not provide this disclosure and are not required to by Texas law. In lieu of this they recently started making a Property Condition Report (PCR) available on most HUD homes sold in Texas.  This is not an inspection report prepared by a licensed Real Estate Inspector but instead a report prepared by a contractor working for HUD and their Management and Marketing (M&M) Contractor. Although this is a fairly thorough report you still have the availability to have a separate inspection done by a licensed inspector of your choice. 

    HUD does not have any information that they will disclose to the purchaser or Broker/Agent involved in the transaction as to the previous owner or the reason why the home was foreclosed upon. Typically the reason that a home is foreclosed upon is because payments were not made on the home for some reason, thus causing the foreclosure, or the home was transferred to the Government in lieu of foreclosure. We will supply you a copy of the tax records and other information on the home.

    The buyer is encouraged to have their own termite inspection prior to closing at the purchaser's cost (usually between $60-$100). If the buyer is using FHA financing on a HUD home, HUD will provide a current Wood Destroying insect report and treat the home if necessary at no cost to the buyer.  If you are not using FHA financing or an FHA 203K Loan  this would be at the expense of the buyer.

    The property that is being marketed by HUD may be located within the 100 year Flood Plain, as determined by FEMA (Federal Emergency Management Agency). If purchasing a home that is in the flood plain, your Mortgage Company will require that you obtain Flood Insurance for the home. You should consult your Insurance agent for a quote, if the home was built prior to the 1970's it may qualify for a reduced insurance rate. To get the best possible price on your flood insurance an elevation certificate may be required, this would be the buyer's expense, and could cost between $50 and $500. If the home has previous flood damage, you may be required to get permission to rebuild the home from the city or county. If they do not grant permission the home has little or no value.

    The majority of the land in the Houston area is flat and drainage is very poor, if any area receives a large steady rain, the area is likely to experience flooding. We have links on our website to the FEMA flood map store and we will be glad to print you a copy of the most current map available but even if the home is in or outside the flood plain this is no assurance that the home will or will not flood in the future.

    Government homes are sold by Sealed Electronic Bid, therefore, there is NO possible way that we can accurately predict how many bids there will be on any home or how much any home will sell for. We will only be able to give you the current list price of the property, the tax records that show the previous assessed values of the property, and comparative market values of similar homes in the area. If you request it, we will give you, based on our expertise, our " Best Guess" of what the home will sell for, but the final decision is up to the purchaser. If more than one bid is submitted on the same home through Eagle, Realtors, we are not at liberty to discuss the other bid with you, nor can we discuss your bid with them. Please do not ask us to discuss these other bids with you, as we will not be permitted to do so.

    HUD no longer post the bid results. We will only know if you won the bid or not, usually by 11:00AM to Noon each business day.  We will call you as soon as we know if you are the winner or not. 

    All HUD homes are sold "AS-IS WITH ALL FAULTS" with NO Repairs of any kind except Termite Treatments or LBP abatement in some specific circumstances. The only exception to this is when the seller has designated certain items to be repaired or replaced by by utilizing the HUD FHA loan with an escrow repair program. This allows the buyer to include the cost of these repairs in his new FHA mortgage and do the repairs after closing.  If HUD determines that you have done or attempted to do any repairs to the home before closing, your contract will be canceled and your earnest money will be forfeited to HUD with no exceptions no matter how small or how urgent the repair. 

  • HUD: Once the contract has been accepted and executed, after we receive written permission from the FSM after paying a fee to have the property re-winterized, HUD will allow you to have utilities turned on for a 48-hour period to have inspections of any item in the home performed. However, they will NOT repair items in the home for you. HUD at their expense performs a complete home inspection prior to placing the home on the market. This is available for your review before bidding on a HUD owned home.  You are still encouraged to have an independent inspection performed by an inspector of your choice.

    To insure your safety in your home YOU are encouraged to install or have inspected the following items to assure your safety in your home. Ground Fault Interrupters (GFI) Electrical Outlets near any water source, such as bathrooms, kitchens, laundry, garage, and outdoors. Install new High pressure Relief Valves on all Hot Water Heaters. Have any furnaces checked by a professional for cracked heat exchangers. Double Wall (Safety) Flues on any gas furnaces or gas water heaters. Carbon Monoxide testers on any gas homes. You should also install NEW Smoke Detectors near each bedroom and on each floor.

    Your interest rate on your loan is subject to change up until the date of closing unless you have a written agreement with the mortgage company or bank.  Neither the agent, broker or lender has any control on the financial markets that control the rates on your loan.  Please discuss this with your lender and receive information about locking in your rate if you desire.    It is dependent on many factors and you should discuss this with your Lender and or Loan officer. You may choose any lender that you wish on the HUD properties, but please be aware that most lenders do not participate in the HUD Sales Program. Typically the interest rate on these HUD loans is slightly above the normal market rates since the lender is not allowed to require certain items such as appraisals, surveys and other lender charges normally allowed. As your "Buyer's Agent" we are allowed to make recommendations to you as to contractors, inspectors, and lenders but you as the buyer always have the ability to chose someone that you wish to use do handle the other parts of your home purchase.

    We encourage you to obtain an Owners Title Policy on your home. We can ask that HUD pays this expense for you, if requested by your agent on the HUD-9548 Sales contract at the time of submitting your bid. A list of these cost is available on our web site at the resource page. This insures you the buyer that there are no outstanding liens on the property and that all-previous tax and assessments have been paid. This policy will also list any easements that are recorded against the property. If you request an Owners Title Policy, the closing agent, will be glad to furnish you with a copy of the Title Commitment prior to closing if requested by you, if not requested you will be supplied one at closing. YOU ARE ENCOURAGED TO HAVE THIS TITLE COMMITMENT EXAMINED BY AN ATTORNEY OF YOUR CHOICE. You can choose any title company to issue the policy that you wish. 

    At the time that we process your bid on the home, we must be in possession of your earnest money check.  All checks need to be certified funds, either a cashiers check or money order. Your earnest money will be deposited with the appropriate government agency upon you winning your bid. If you do not win your bid we will return your check immediately.  HUD requires a $500 earnest Money for bids below $50,000 and $1,000 if bidding above $50,000. The check should be made payable to the "Title Company That You Choose". .  Please check with us for the most current amount required.

    If for some reason, the transaction of purchasing the property is not successfully completed, your earnest money may be forfeited; however, it is the decision of the Government agency that is selling the property as to whether or not the earnest money would be refunded. As the broker in the transaction we have no control of the disposition of these funds. A specific addendum is used to explain this process on the sale of the HUD homes.

  • HUD:
     HUD requires that should you not be approved on your loan we must send a copy of the rejection letter to HUD's Management Office and get a release letter that can then be taken to the HUD closing attorney to allow you to receive a refund. HUD has a very specific policy regarding earnest money dispositions, a copy of this is included in the contract package, and we will cover it in more detail with you.

    The government does not supply, nor require that you purchase a survey on the home. The government assumes that the home is in the same location as when they made the original loan on the home. In a normal loan transaction the lender requires a survey to insure that the home is within the property lines and that there are no encroachments that affect the title to the home. In these transactions, if you use the government sponsored financing, the Lender does not require a survey; however, you are encouraged to order a survey at your expense, through either the lender in the case of a HUD home or through the Title Company. If you use FHA 203 K financing, you will be required to get a survey, at your expense. If you wish to have a survey we must have sufficient notice as soon as possible in order to insure that it is done prior to the closing.

    Any Government home may be located in a subdivision that has a mandatory homeowners association, subject to an annual maintenance fee. This property may be subject to Deed Restrictions that limit the use of the home in certain ways. You should contact the subdivision or Title Company to obtain a copy of the deed restrictions prior to closing. It is strongly recommended that you investigate the financial status of the Homeowners Association, and determine if there are any current or past violations that may affect the property that you are purchasing

    We may have supplied you with information that we have obtained from various sources that we believe to be accurate. Some of these sources are, but not limited to: County Clerk Records, HUD Listing Data, HUD's Property Condition Reports, VA Listing Data, PropertyInfo.com and a Tax Data Base Service and a division of Stewart Title Company,  Houston Association of Realtors MLS (Multiple Listing Service Data Base), flood maps from FEMA and other agencies, hazardous material information from EPA, and other sources on local or governmental information  We believe this information to be accurate but we cannot guarantee the accuracy of these sources. If you are relying on information from these sources in making a decision to purchase the home, you should take it upon yourself to verify the accuracy of the information.

    The purchaser is not allowed to take possession of, or place any possessions in the home until after the closing. The purchaser is NOT allowed to do any repairs to the home prior to closing or to turn on utilities until after closing (except on HUD transactions. On HUD homes the buyer is allowed with permission to turn on utilities for a 48 hour period to allow the home to be inspected with written permission. Please see the Home Inspection Policy addendum, please ask for details).

    We do not have any knowledge as to if any previous owner or occupant has been involved in any illegal activity in the use of the home or if there has been any previous deaths in the home, unless noted below. We do not have any knowledge of any Ghost or spiritual entity in the home. The next-door neighbors and local Police are the best source of this type of information.

    You should seek the advice of a professional insurance agent for information on the different types of coverage available on your home. The Mortgage Company requires only that the home be insured with a minimum of a Fire & EC policy. These policies do not include theft or liability insurance coverage. The homeowner's policies do have coverage for theft and liability. FLOOD INSURANCE is a separate policy and is NOT included in any of the above. See above for more information on Flooding and Flood Insurance.

    The insurance industry maintains a database of claims by individuals and companies that have filed or asked about filing claims on properties.  This is know as the CLUE database and they will use a report generated by this system to rate your cost of insurance.  You should ask your agent to pull this report for you before he quotes your estimated premium on the home. 


    It is recommended that you obtain a report from a natural resource professional to determine if there are any threatened or endangered species, or their habitats located on or near the home that you are purchasing.

    The Buyer, at the Buyer's expense, is encouraged to obtain a report from an environmental specialist to determine if there are Wetlands, as defined by Federal or State Laws or regulation, located on or near the home that you are purchasing.

    If the property is located in a Water or Utility District you are required to sign an acknowledgment of that fact that shows the tax rate and bonds issued. You should investigate whether the district is financially viable, under capitalized, or under protection of bankruptcy. You should also contact the Texas Department of Health or Local City or county Health Department as to current test results on the district or city's water supply.

    Homebuyers today need to be concerned about many environmental items that can affect a home. You are encouraged to investigate on your own or hire an expert to determine whether the home you are purchasing has any of the following items of concern: Mold, Mildew, Radon Gas, possible allergens, Lead Based Paint (see separate Lead based paint disclosure forms), Lead Contaminated Mini-Blinds, Contaminated water and or plumbing fixtures, Asbestos (Insulation - Siding - Tile, etc.), UFFI (Urea-Formaldehyde foam Insulation), Formaldehyde Gas / Radon Gas, Biological pollutants such as bacteria, viruses and fungi, Volatile compounds found in cleaning and repair work, Tobacco smoke, Mold and Mildew due to water leaks or flooding, Combustion by-products from wood, coal or oil, Poly Buteline Plumbing, Defective galvanized plumbing pipes, Pesticides (including but not limited to Chlordane, DDT etc.), PCB's (Polychlorinated Biphenyl), Aluminum Wiring / defective wiring, Water Well and Septic Systems, and Any other items contained in - on - under - or above the house or property that you are considering purchasing. The Buyer at Buyer's expense is encouraged to obtain an Environmental Assessment Report prepared by an environmental specialist.

  • HUD 203 K Loans
    HUD 203K LOANS are very complicated. If you are a novice home-buyer you may wish to seek advice from the loan officer before purchasing a home with this program. We will be glad to give you a HUD booklet on this program and we will supply you with a copy of the actual HUD manual on this loan type should you wish to purchase a home with this loan.

    , and applies to the purchase of HUD Owned Homes.


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