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A HUD home is a residential property that has been aquired by HUD through a foreclosure on an FHA-insured mortgage. HUD stands for Housing and Urban Development. Once HUD has the property they offer it for sale so that they can recover the loss on the foreclosure. HUD properties normally need some repair. Anyone can purchase a HUD home that is for sale by the U.S. Government but you must go through a broker or a real estate agent that is authorized to sell the HUD properties.

If you find a HUD home that you want to buy, your real estate broker will submit an offer or bid. HUD homes are usually sold in an offer period, at the end of which all offers accepted and sale goes to the highest (reasonable) bidder. If the home isn't sold in the initial period, you can submit a bid until the home is sold, any day of the week, even on weekends and holidays. Once a bid is accepted, your real estate agent will be contacted within 48 hours.

The Department of Veterans' Affairs (VA) acquires properties as a result of foreclosures on VA-guaranteed and VA-financed loans. For VA homes, you should have a real estate agent prepare the Offer to Purchase And Contract of Sale VA form. Your agent will submit your offer through the listing broker for approval.

After a bank fails at auctioning a bank owned or Real Estate Owned (REO) home, it will try other means to get the best price possible for the property. It is unlikely that they will recover their losses in the property, as what is owed to the bank is usually greater than the property equity. They will typically not accept your first offer, but will counter it with a higher price.

Keep in mind that bank foreclosures are not always a bargain. There may be liens against the property and there may be someone still living in the property. Banks always sell a property in "as is" condition so your offer should include an inspection contingency period in case the inspections reveal problems that the bank won't repair.

Any offer you make should be based on sound facts. For example, compare the prices of other similar homes in the same area, and also take account of any renovation costs you anticipate. But avoid a "bidding war" since you may well end up paying more than the true market value. Finally, inspect the property and before you commit to any deal make sure the bank takes responsibility for any needed repairs.