Buyers in the market for a home can find some smoking deals out there from the government. But those who are not careful could get burned.
When homes go into foreclosure and they are government insured, the government gets them back and sells them at a huge discount.
The Department of Housing and Urban Development or HUD advertises these homes as having "consumer friendly" prices. But buyers are finding the repairs and defects are anything but consumer friendly.
Tiffany Obar beat out 22 other buyers to purchase a North Richland Hills gem. It was appraised at $136,000. The government wanted just $84,000 and since the government's home inspection said everything was functioning properly, she bid $91,000, beating out everyone else.
Obar thought most of the issues with the house were simply cosmetic.
"That is why I bid the way I did. I knew I could come in and do a lot of this on my own," she said.
But when she got her own $300 inspection back, she was floored.
There were major issues involving the roof, appliances and the air conditioning. They were all a mess. The repairs were going to total almost $15,000 just to get the home insured.
But the HUD inspection did not mention any of those issues. And the government does not negotiate. If a buyer backs out, it moves on to the next bidder.
"The process stinks. It just does," Obar said. "I am super disappointed in the government."
"Who is holding HUD accountable? How do we know someone really came out here?" she asked.
A North Texas Realtor showed FOX 4 another home with serious issues. He said it is buyer beware.
"How the inspector missed this is a good question," the Realtor said pointing to a crack in the floor.
He did not want FOX 4 to show his face. He sells government foreclosures and said Obar's case is not unusual.
He said not only did the government's inspector miss a huge crack, there is also termite damage.
"This is what termites leave behind," he said pointing to damage on a wall.
There are water leaks, wood rot and the entire shower is gone. The only issue mentioned in the report concerning the shower said "missing drain."
"Of course, the drain is missing. The entire shower is missing," the Realtor said.
There is no telling what else a thorough inspector might find.
After the house went under contract five times and fell through, the condition report changed, recommending a "foundation inspection."
The Realtor said the government is wasting everyone's time and money and isn't helping to get the housing market turned around.
"By phoning up these reports, ultimately, it causes ripples," he said.
FOX 4 contacted the HUD. A spokesman would not agree to an interview or answer our questions about who is inspecting these homes.
The department issued a statement that read, "HUD homes are sold in "as-is" condition. HUD makes no representations or warranties concerning the condition of the property and HUD does not guarantee or warrant that the property is free of visible or hidden defects or any other condition that may render the property uninhabitable or otherwise unusable and will make no repairs to the property after execution of the sales contract."
Obar said she will never purchase a HUD home again.
"It has disrupted everything in my life," Obar said. "I had to put all my stuff in storage."
She was forced to move in with relatives.
"I am homeless. I don't have a house," she said. "You need extra money, lots of extra money if you are going to buy a HUD home because they don't tell you the truth."
Buyers can get their money back after purchasing a HUD home but they will be out their time and money for the inspection.
KDFW FOX 4
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