Here at D&D Property Solutions we occasionally get questions about dollar homes for sale in Philadelphia.
Houses for $1 sound like some sort of scam or too good to be true. So, what’s the deal with $1 houses? Let’s dive in and find out!
The first thing you need to know is that there are two kinds of dollar homes out there.
One is the kind you will see every now and then in standard listings like you’d find on your favorite real estate site. These are often gimmick prices meant to drum up traffic on a listing that isn’t getting much love at its real price. Most reputable brokers and agents wouldn’t pull a stunt like this, so not only are you not going to get a house for $1 but you’re dealing with someone who probably isn’t the best agent out there.
Of course, there can always be errors on the listing site. Software and software programmers can make mistakes too and sometimes you’ll get a rogue listing. These are usually fixed very quickly since the listing agent or a potential buyer will usually report the error to the website.
The other kind of dollar home is actually a real home that can be purchased for $1. The Department of Housing and Urban Development (HUD) has a program called Dollar Homes that does actually sell homes for one George Washington.
Many home loans are backed by the Federal Housing Administration (FHA). Lenders are more likely to lend money to someone knowing the United States government is standing behind a portion of the loan.
When a loan with a FHA mortgage goes into foreclosure the bank will do their best to recoup their portion of the loan. However, many of these homes are eventually turned back over to HUD, which will retain ownership of them.
HUD then attempts to sell these foreclosures at drastically reduced prices through their website platform called Homestore. If a home sits on HUD Homestore for more than six months without being sold and the original list price was $25,000 or less, it will then become a Dollar Home.
Dollar Homes are offered to local governments for only $1 plus any close costs needed. The idea is that HUD can finally cut their losses and a local government can rehab the house in conjunction with local groups. These houses are usually used for low income housing.
So, not only does the local government get rid of a vacant eye sore, they can also help out a low income family looking for a good home.
The good thing is that dollar homes do exist and they can help out all involved when the process goes as plan. The bad thing is that you personally cannot buy a $1 home.
However, if you’re looking for a great deal on a house and can stomach some rehab work, the HUD Homestore might be a great place to look.
Here at D&D Property Solutions we’ve dealt with a lot of different real estate issues and if you’re interested in dollar homes for sale in Philadelphia we can answer your questions.
Give us a call at (267) 888-8987 today or contact us here now and we’d be happy to help you.