Bidding On HUDs
I'm looking to bid on a HUD property, but the listing price seems high for the comps in the area. I've never done this before so I was wondering what the listing price actually means? Can you bid less than the list price and still win the bidding?
That is only an asking price. I know of a few properties that sold 10-20k less that what they where asking. Figure out what its worth to you, and go for it.
Best of luck!
HUD starts at what they think they can get, usually for potential owner-occupants. If the house doesn't sell, they lower the price, I think once a week. At some point, investors are allowed to bid also, and they keep lowering the price each week. I understand that you can go a certain percentage below their asking price, but that's it. You just have to wait for the next price drop. A realtor that works with HUD will be able to give you the specifics.
JohnCl
I have purchased 1 HUD home and every state does things a little different, but I believe that the initial bid is for owner/occuoants only. If it not purchased it becaome available for "Weekly" sale. That is how they do it in Texas. Check out Google and look for the listing in your area. It will plainly state Owner/Occupant or open bidding.
Sometimes you can get a good deal with a HUD, but, buyer beware you are dealing with a government entity. 
After so many days of sale for owner occupied buyers, investors can bid on these properties. You can offer any amount. I've seen listings for 50K and they would sell for 20K. You can track the bidding on the HUD web site. A a couple of good realtors who do these HUD properties and have them show you these properties.
In Minnesota the guideline that realtors use is that 93% of listed price is what HUD will accept initially. If there are no takers they may lower price or take the highest reasonable offer.[ Edited by srj19 on Date 12/03/2004 ]
Hi SRJ19: I have been told that in Mn it is 89%. I have purchased 2 so far at this level, they were both owner occupied, though.
jspeth,
Curious about that 89% figure. Did you buy through a Realtor who did not lower his commission on the contract. That would fit with the % that I had been told.
Yes, I believe my realtor put down the standard commission that Hud allows. People should know, though, that another bidder could always put in a higher bid and end up with the property. I lost one a couple years back...I was $27.00 short. It happened to be a house that I would have paid another $10,000 for...I kick myself every time I think about it...but you can't win them all and you hate to pay any more than you have to.
What the 89% is -- the net to HUD, that's what they really look at.
You can request they pay closing costs, this lowers the net to HUD.
The broker can take up to 5% commision. Find one who will go for a flat $1k fee, and your net to HUD will be higher.
In Florida HUD starts the bidding at what they believe is market value. I have not seem them lower the prices. Owner occupied have first dibs on all properties. A agent decides what commission they get they can get paid up to 5%. HUD will go with the offer where they net the most so keep in mind that two offers for the same amount on the same property will be weighted differently. How much is the agent getting? Is the buyer looking for any closing cost? Good Luck
tbird beat me by 3 seconds LOL