IMO the inspection is worth the money and if the $300 is a problem I
don't understand why someone would be buying a house. Not to blow hot
air but I've had to fix almost every part of a house you can fix over
the years and I would still pop for the inspection. I don't know all
the building codes and haven't run into everything like a good
inspector has. In my recent house hunt the inspection found a flue
angled incorrectly, a flue too close to combustible materials, and an
electrical service line that was not at least 10' above the patio. I
never would have found those cause I didn't know they were problems.
That's 2-3 grand worth of repairs that I can go back to the seller on.
Or put another way that's 2-3 grand I'd have to pay 10 or 20 years from
now when I go to sell. My point is that I 'think' I know a lot about
houses but pride has a price, I woulda missed those things so I think
the 3 bills was a good investment.

There are a few twists to this story. On some sales, maybe yours since
it's HUD, they won't respond to the inspection anyway so having the
thing inspected does not offer you a vehicle to back at the seller like
it does in a private transaction.

In a hot market, you may not have time to inspect the house properly
before making a bid; the inspection clause and later followup enables
you to make a bid with at least some comfort that you can adjust the
deal if something is found to be wrong. In that equation, when you're
fighting with the seller, an inspection by a third party carries a lot
more weight than one you do yourself.

In a slow market if you narrow down to one house that you really think
is a winner, it can help to have the house inspected before making a
bid. This will scare the seller a bit, which helps in bargaining. If
you pop for the inspection and it finds a bunch of stuff you can then
work that into your bid, which is easier than making a bid first, then
trying to get the seller to correct a bunch of things. Again the key
in that process is that the inspection is by a 3rd party.

(I do not work for an inspection company ... )