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A HUD (Department of Housing and Urban Development) home is a residential property which HUD acquired after a foreclosure on an FHA-insured mortgage. HUD puts the property on sale to recover any loss from the foreclosure. HUD homes may be in need of some repair. Unlike homes for sale by the U.S. Government - which anyone can buy - homes sold by HUD require that you work together with a broker or real estate agent who has an authorisation to sell HUD homes.

In the sale of a HUD home, there is a specified period within which offers are accepted. At the end of this period, the sale is granted to the person with the highest reasonable offer. If the home is not sold within this period, offers will be accepted until a bid is accepted. If you wish to bid on a HUD home, your real estate broker should submit the bid for you. If your bid is accepted, your real estate agent will be notified within 48 hours of its acceptance.

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.

A Real Estate Owned (REO) property, also known as a bank-owned property, is one that reverts to the bank following an unsuccessful auction for foreclosure. Because the amount owed to the bank on the property is usually greater than the equity in it, the bank in most cases will make an effort to get the best price it can for it. Typically, therefore, the bank will make a counter offer to your initial offer.

Bank forclosures are not always the great deal they appear to be. There may be other loans against the property and there is the possibility that there will still be residents on the property after purchase. You should make sure to ask for an inspection period so that you get a chance to investigate for any potential problems as a bank foreclosure will be sold "as is".

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.