First time buyer & Bidding on Hud Home - Posted by Joe

Posted by Mike on July 16, 2001 at 21:27:56:

A rule of thumb I follow is HUD properties don’t make good investment properties. To answer your question:
A bidder can ask for up to 5% closing help from HUD, They BLB usually get 1% or less. Now the RE agent can get up to 5%. So if you make a full price offer (100%)
it is only a 89% NET TO HUD. THis is the figure HUD looks at in picking the winning bid, The Net to HUD.
Or what’s in it for me.
I usually don’t bid on HUD properties for investing because the good ones get over bid and it is hard to find at least 30% equity in them. They do exist but you have to be quick. Now if you wnat to hold onto the house long term like a L/O or something then it might work better for you, but for flipping HUD’s are hard to find, for me at least.
Don’t let the RE agent tell you what to bid!! They have to put in the amount you want and although 89% is usually the lowest HUD likes to take they do go lower and even lower.

Good Luck

First time buyer & Bidding on Hud Home - Posted by Joe

Posted by Joe on July 16, 2001 at 20:51:59:

Im looking into bidding on a HUD home but im not sure on what to offer. The house is $65,000 and ive read, (on CRE news group), that they sometime take 80% of the market value.($52,000)
Well today an agent had signs posted for open house so i stopped to take a look, even though i want to report him to HUD for letting the cat out of the bag and screwing with my soon to be deal but anyhow he told me that the less HUD would take is a 60,000 bid that way his fee plus the broad brokers fee would still be an acceptable net offer to HUD. My question is… does the Realtors fee and the broad brokers fee play a part in the 80% net to HUD or what is a good rule to go by when offering an acceptable bid?