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A Department of Housing and Urban Development (HUD) home is a residential property acquired by HUD due to a foreclosure on an FHA-insured mortgage. HUD offers the property for sale in order to recover the loss on the foreclosure. HUD homes will need some level of repair. While anyone can buy a home for sale by the U.S. Government you must work with a real estate agent or broker who is authorized to sell HUD homes.

When you find a HUD home you want to buy, you will need a real estate broker to submit an offer or bid. HUD homes are normally sold within on offer period. At the end of this period, the sale goes to the highest reasonable bidder. If the home can't be sold in the initial period, you can submit a bid until it is sold. Bids are accepted any day of the week, even weekends and holidays. When your bid is accepted, your real estate agent will be contacted within 2 days

The Department of Veterans' Affairs (VA) buys properties from foreclosures of loans they guarantee or finance. For such homes, please have your real estate agent complete the Offer to Purchase And Contract of Sale VA form, which should be submitted for approval with your offer, through the listing broker.

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.

Be forewarned that bank foreclosures are not always a great deal. Some properties have liens against them. Some have people still living in them. Bank owned properties always sell in "as is" condition so your offer must include an inspection contingency period. This gives you an out in case the inspections bring to light problems that the bank won't pay to repair.

Do your homework before ever making an offer. Look at other homes to find out if they are comparably priced. Make a calculation of the costs of renovation, and be careful not to get caught in a 'bidding war' as this can easily lead to make an offer higher than market value. Make sure to get the property inspected and have the bank make any repairs before committing to the deal.