Hubzu Process on Traditional Sales (2014, auction, foreclosed, 5%)

[pickles4u]

I have an offer on Hubzu for a foreclosed property. It is a traditional sale. Hubzu's minimum bid was some $73,000 where my offer exceeded that. They countered some $3,500 less than their asking price. This has been going on now for several weeks, where each time I place an offer, they come back to counter with the same counter offer everytime. I increase my offer minimally each time, and they continue to counter at the same price. This is now the third time I keep getting the same counter offer from them.
The question I have for those who are experienced with Hubzu is : does my continued offering negate Hubzu's decrease in their asking price.? Since Oct 2014, the asking price had decreased by $10k every month. Does my offer stall this process?

If I allow my offer to expire, does Hubzu continue to decrease the asking price? Is Hubzu an automated process or is there a real person handling these counter offers?

[BrokerHarry]

Originally Posted by pickles4u

...each time I place an offer, they come back to counter with the same counter offer everytime. I increase my offer minimally each time, and they continue to counter at the same price. This is now the third time I keep getting the same counter offer from them.

I think they're trying to tell you something.

If you don't want to meet their price, it may be time to move on to another property.

PS

I closed the deal on a Hubzu foreclosure auction house that I wanted as a personal investment rental property last September.

I paid cash, & thoroughly rehabbed it, & I'm now pulling about an 8% cap rate after all expenses are taken into account, including rehab, taxes, insurance, HOA, & landscape maintenance, etc.

In my area of Central Florida, quick flips are now a lot harder to find. The banks are holding out for higher dollar on their REOs. There's no more fire-sale prices. But good buy, hold & rent deals are still out there, especially if you have cash.

[pickles4u]

BrokerHarry - Is Hubzu an automated process, or are there people actually looking at offers..etc.? Do you know who makes asking price reductions/ the seller or hubzu?

Yes, they could be telling me something, or they could be trying to get the greatest price they can. My job would be to get the lowest price I can. Would you be suggesting that there exists a conflict, where Hubzu is unwilling to negotiate a lower counter offer?

[BrokerHarry]

Originally Posted by pickles4u

BrokerHarry - Is Hubzu an automated process, or are there people actually looking at offers..etc.? Do you know who makes asking price reductions/ the seller or hubzu?

Yes, they could be telling me something, or they could be trying to get the greatest price they can. My job would be to get the lowest price I can. Would you be suggesting that there exists a conflict, where Hubzu is unwilling to negotiate a lower counter offer?

I can't tell you exactly how automated the process is, but I believe somewhere, someone is making some hard decisions.

Hubzu doesn't own the property you're interested in buying; they're simply the on-line venue that the investor behind the loan is utilizing to minimize their losses, & be seen by the most potential buyers.

Hubzu isn't calling the shots; the investor who owns the loan is the entity making the final sales decision. The investor probably established a minimum reserve that has to be hit, or no deal.

Hubzu makes their 5% when the sale closes. I'd imagine they'd just as soon as be done with it. But the investor must think they can ultimately do better than what you're offering. They may be right.

In my case, the property had gone back to FreddieMac, a quasi government entity. The property languished on the MLS for a number of months, with broken windows boarded up. So they stopped taking offers off the local MLS, & put it up for auction on Hubzu.

But the house was only 8 years old, & had all tile floors throughout, & had a very nice fenced yard. It was worth rehabbing...but the typical owner-occupied buyers in this area don't often have the funds to rehab. I do.

I don't blame FreddieMac for trying to mitigate their losses. After all, ultimately the bill falls back on the taxpayers. FreddieMac knows houses are appreciating again. If you don't like their price now...they're betting they can wait 6 months, & quite likely pull more.

As an investor, I make the best deal I can, & then I close that deal, so I can start earning a return on that investment asap. Why quibble over a few points now, if you can make it back quickly?

Anyway...I don't know the details of your transaction, or what prices are being bandied about.

But after 3 counters that have gone absolutely no where...I'd suggest you may have to come up, or you may as well start looking elsewhere.