Wholesaler · Crosby, TX · Member since 2013 · 10 posts · 1 vote
Hello everybody. I am considering putting an offer in on a HUD home in the Houston area. It's a 4 bedroom 2 bath, about 2500 square feet with a pool and spa. Really nice home. It's been inspected by HUD and everything checked out. Good roof, foundation, and A/C. I walked through the house and it seemed that the only repairs needed was paint, flooring, appliances and a good pool cleaning. Fixed up the home is worth about $180,000 and the asking price is 94,000. I'm buying it for my primary residence. I'm looking for any good advice before I place my offer. Thanks
I've bought about 7 HUD homes in the Houston area, I've been told by HUD brokers that you can offer about 5% less than offer price and your bid will get accepted and I have found this to be true, as long as no one else bids higher. As an owner occupant, you definitely have a better chance of getting the property
As a owner occupant your bid will leap frog all investor bids. Check and see how many days on market this property has been active for. HUD drops the price around 60 days and again around the 80 day mark.
The longer the property has been on the market the better chance a lower bid will be accosted.
I have flipped around 10-12 HUD'S as an investor and that seems to be the breakpoint at least in my area. But it could be different where you are.
I've bought about 7 HUD homes in the Houston area, I've been told by HUD brokers that you can offer about 5% less than offer price and your bid will get accepted and I have found this to be true, as long as no one else bids higher. As an owner occupant, you definitely have a better chance of getting the property
So I guess I wouldn't have to bid over asking price? My lender already said that they would not finance more than HUD appraisal. I was going to ask a little over just to make sure I get it. My main concern was closing on the house. I heard that it is a lot of paperwork and takes longer to close. Is that correct?
HUD changes prices every 35-45 days the house is active on the market. I it goes under contract that time is paused.
They lower the price about 11% on their price changes.
The asset management companies for HUD are allowed to accept about 5% less than ask price assuming commissions for buyers agent is 3%. If a property is in the market(active the whole time) for more than 60 days the asset management company can ask for special approval on low bids.
HUD takes the highest bet bid to them, if someone bids higher than you, HUD will accept that bid regardless of financing type.
The original list price is based off an FHA appraisal. If you bid more than the original list price then an FHA loan can only be based off the appraisal already done. You will have to bring difference in cash between bid amount and list price. If you go conventional you can bid higher and get a new appraisal.
Thanks for the info. My wife and I really like the house and don't mind paying the asking price for it. We just didn't know anything about HUD homes and how they were appraised. Any idea on why this home is appraised so low? It's been inspected by HUD and the inspection showed everything good and functional. I've walked through the house myself twice and it seems all it needs is new flooring, paint, appliances and pool service. At the time it was forclosed on the house was valued at around $180,000 but they are only asking 94,000.
Sometimes HUD appraisers come in really low. Who knows what they are doing. Don't count on the HUD inspection to be accurate. Most of the time the utilities are not on when try do the inspection.