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If anyone has experience with this topic, I'd appreciate any info that you can give.
I was told that you only get to bid once on a HUD house, yet when I looked at the HUD website, it read that you can make an offer then make a higher offer (unless they meant when buying any house in general, which then should not be discussed on their website).
I looked at a house Saturday and am interested in putting in an offer, but my real estate agent said that HUD will likely get bids that are anywhere from $5K - $10K higher than the list price. If I really do only get one shot at a bid, is there any way to make a bid that is reasonable for me but is more attractive to HUD and has more potential to be awarded?
I was told that the bids go in, then if a person is awarded the house, then there is an inspection. Why wouldn't HUD do an inspection so that everyone would know the issues and then could bid on those conditions? That seems like it would make more sense and streamline the process.
Yes you can only bid on the house once. HUD will review the offers and take what they think is the best and work with that offer. They are not going to inspect the property for deficiencies as they are a seller and would have to disclose such things and as with any seller they do not want to have knowledge of something being wrong. It is up to the buyer to do their due diligence just as in any other sale. You can always inspect the house before putting in an offer. Of course the best offer for them would be a cash offer with a quick closing and no inspections.
I was under the impression that a seller had to have a disclosure for major issues. Is that just for hazards like lead paint or mold? So, if a regular joe has to have a disclosure why not HUD?
I haven't placed a HUD bid since they changed their website/bid submission etc... but if things are similar to how they were before, all HUD cares about is the NET to them, not particularly the type of financing and/or exclusion of any/all contingencies.
as a buyer, whether you choose to do an inspection is up to you. just know that HUD will do no repairs at all. they complete an FHA appraisal before putting the home on the market, and at times, will catch things that may be an issue for your lender so keep that in mind (as a poor conditioned property may hold you back from obtaining financing)
what type of financing will you be utilizing? if FHA, your lender may be bound to the appraisal that HUD completed. should you choose to go above the asking price to try and make your offer stronger, you may have to come up with that difference in money on your own..
Thanks for your help. As I said, my real estate agent thinks that the house will be bid up, which makes me wonder why, if I can't come up with another $10K, I would bother bidding on it. Other than there is a slim chance that it won't happen that way. It's a 2 bedroom (rather than 3) and my agent thinks that may make some people reconsider an offer altogether.
There should be a property inspection report under the property in hudhomestore.com. There may be more issues than reported. You can change your bid, or submit a bid if the one you made wasn't sufficient enough for HUD.
The best advice I can give you is - make an offer you can live in it or live without it.
I was under the impression that a seller had to have a disclosure for major issues. Is that just for hazards like lead paint or mold? So, if a regular joe has to have a disclosure why not HUD?
Because HUD did not live in the property and sell as is where is. They do not know if the heater went, if there was a roof leak and are not going to look. They have an appraiser go out and appraise it and will note a current leak or missing pipes but not much more.
I am going to close on a HUD home next week. And some of the advice is true the worst part I found was there is no how to guide, and I would hear different views on almost all of it. One thing I do know due to the law if lead base paint is found after they accept your bid then HUD does pay for the repairs. At least with fha loans and going with the 203k streamline is a pretty good deal. It's like a home improvement loan with low rate and you can get a lot fixed or new appliances maybe do some reading on it. The best advice I could give is find a realtor that knows HUD. And have your financing in place when you bid, because if it is accepted then the clock starts and banks will take 60 days for a 203k loan, HUD will give you a 45 or 60 day close. And if you don't get the one you want I found there will be a much better one listed the next day. So take your time and be ready ask a lot of people and it will pay off. HUD is a very good deal if you can wait. It goes fast. Good bid what it is listed for and take your chances the bank will not finance over that amount unless it is for repairs.
Thanks for the advice and input. I now have two HUD homes that I am interested in. One I have already walked through and the other I will walk through Monday evening.
I just won a bid for a HUD home after 12 moths of bidding. Our agent brought us the all the paperwork to complete and she hand delivered it with the earnest money of $1000 so as not to miss the 48 hour deadline. But 2 later, our agent called me to say that she got a call from the Asset Manager saying that although the house was listed for $90k and our bid was $91k, the actual appraised value for the house is $83k and we will have to come up with the difference ($7k) in order to proceed further. Well, i am Livid. This sounds fraudlent to me. My question is, Can HUD list a home for more than it's appraised value without disclosing this? I am so disgusted and i want to also know if i will get my earnest money back.
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