Are Traditional Foreclosures Or HUD Homes A Better Choice For First Time Homebuyers?

The foreclosure crisis, it should surprise no one to hear, has been a national disaster. However, even disasters often also provide opportunities and the wave of foreclosures which has swept across the country and the corresponding housing slump is definitely no exception. There are an unprecedented number of homes showing up in foreclosure listings as well as federally owned HUD homes which are available to prospective buyers at a significantly lower price than a conventional home purchase, even given the state of the still-recovering housing market.

If you’re considering buying your first home and you've only just begun the process of looking around at your options, it’s understandable if you’re wondering whether HUD homes or the properties you may have seen in foreclosure listings are a good deal for prospective buyers like yourself. As it happens, there is no easy answer to this question. There are many foreclosed homes as well as commercial properties which are an excellent value, as well as those which are in poor condition, although the prices on these properties are generally quite reasonable. By the same token, there are HUD-owned homes which are also great deals; but again, the usual rule of caveat emptor applies.

Actually, HUD homes and foreclosures are not mutually exclusive. As it happens, many of the properties offered for sale by the department of Housing and Urban Development are foreclosed properties which are now owned by HUD. These properties, much like bank-owned REO homes, are available at low prices which are especially favorable to first time home buyers; like banks and other traditional mortgage lenders, HUD doesn’t really stand to gain anything by keeping vacant, unsold homes around. The federal government, in this case, is a motivated seller and that can work to your advantage as a home buyer.

Qualifying to buy HUD homes is relatively easy, with no specialized criteria for buyers. If you can qualify for a traditional mortgage, you can certainly purchase a home from HUD; and you may even qualify for a Federal Housing Administration (FHA) subsidized mortgage in some cases. However, given the enormous inventory of non-HUD foreclosed properties on the market, you may find it easier to find a home which appeals to you by looking at foreclosure listings online.

RealtyStore.com is one website which has an especially large database of foreclosure listings, with foreclosed residential and commercial properties available in virtually every metropolitan area in the country. Along with foreclosed homes, the site also offers a large variety of for sale by owner properties (FSBO), owner financed home sales, rent to own homes and other low cost options which make home ownership increasingly open to first time homebuyers.

Ultimately, the choice of whether to look at HUD homes or to find other foreclosed properties for sale is up to you. There are excellent deals to be had in both, so the choice will more than likely come down to the same criteria that would apply if you were taking the traditional path to home ownership: location, location, location, price and of course, your own personal tastes. There’s never been a better time to be in the market for a home of your own, however, so now is most certainly the time to get started shopping around, whether online or by looking at local advertisements and begin looking for a foreclosed property or a HUD home which meets your requirements and makes you feel like you’ve come home at last.