Hud Help

I put a bid on a hud home for $55,000 and they accepted our offer. It was list for $45,000 . I was buying this house for living in. We are using a FHA loan were preapproved for. Now heres were it gets screwed up.

They said back that they couldn't except it know because it was over what they thought it would apraise for. So my lender changed the loan to $46,000 and we resubmited it back. So now their saying we can't change our bid.

And we have to use thefirst bid of $55,000 but we now have to come up with $10,000 to show if it doesn't appraise for the $55,000 to make up the difference. Which we don't have. What I don't get is our lender is the one who does the appraisel on it and I can't believe it won't appraise for that.

Its almost 2000 sqft 4 bedroom 2 full bath 3 car garage and only need scarpet and paint cleaning and thats pretty much it. It sold for $125,000 2 years ago. It,s going to really piss me off if we don't get this house because its a real good deal.

What if anything can I do ? Any suggestions on working with hud? I'm waiting to hear back f rom my lender because he's trying to work it out also.

Edited: 06/26/2010 at 01:09PM

Jon Holdman

Real Estate Investor · Wheat Ridge, Colorado

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Jun 09 '10, 06:35 AM

You should try to get some local advice, because HUD seems to behave differently in different areas.

I'm a bit confused by what you wrote. I think you're saying your lender is coming back saying they won't do a loan based on the $55K price. Unfortunately, that's not unusual these days. HUD is saying they have an accepted contract with you at $55K, which they do.

Did you put a financing contingency in your offer to HUD? Has the loan commitment deadline passed? If you have the financing contingency and the deadline hasn't passed, you should back out using that as your out.

If you don't have the financing contingency or the deadline has passed, you will either have to go through with the deal or you will lose your earnest money. In our area, HUD is strict, and you WOULD NOT get your EM back if you're past the deadline or did not include the contingency.

If FHA does the appraisal and comes up with a lower value, you're going to be stuck. You'll either have to come up with the cash or walk away.

Welcome to the world of real estate in 2010.

Edited: 06/26/2010 at 01:09PM

Jon Holdman, Flying Phoenix LLC

Dwayne Stutzman

Real Estate Investor · Wauseon, Ohio

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Jun 09 '10, 11:02 AM

Thanks. Ihave a contingency for financing. Plus they haven't cashed my earnest check yet the realtor still has it. If it comes down to it I'm just going to back out and say ok fine . Then put it back on the market and I'll just put a bid of $46,000 and hope no one out bids me or bids on it period.

Edited: 06/26/2010 at 01:09PM

Jon K.

Real Estate Investor · Dallas, Texas

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Jun 09 '10, 04:59 PM

Originally posted by Dwayne Stutzman

Thanks. Ihave a contingency for financing. Plus they haven't cashed my earnest check yet the realtor still has it. If it comes down to it I'm just going to back out and say ok fine . Then put it back on the market and I'll just put a bid of $46,000 and hope no one out bids me or bids on it period.

Dwayne, your plan is good and may work. If it does work, then this snafu will save you $9K, plus interest. If you don't get it, keep watching all the HUD auctions, eventually a similar deal will probably come along.

In the past year I bought 3 HUDs that I was out bid on the first time around, but then they fell out of contract and I got a 2nd crack at them, and won. Keep bidding and don't sweat the ones that get away.

Edited: 06/26/2010 at 01:10PM by Jon K.

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Dwayne Stutzman

Real Estate Investor · Wauseon, Ohio

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Jun 10 '10, 11:34 AM

ok I got the money situation taken care of for this deal. But heres a question hud says this property will not appraise for more than what they had it listed for.

which is what they had it appraised at $45,000. now my mortgage broker doesn't seem to think its a problem and I don't either because I think it was appraised real low. This house is worth more than 45,000 as it is.

Are they right or just blowing smoke. Because my bank will do an appraisel on it and decide what its worth.

Edited: 06/26/2010 at 01:10PM

Steve Babiak

Real Estate Investor · Audubon, Pennsylvania

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Jun 10 '10, 12:31 PM

HUD may have already had an FHA appraisal done!

Edited: 06/26/2010 at 01:11PM

Dale Osborn

Mobile Home Investor · Spanaway, Washington

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Jun 10 '10, 12:49 PM

One thing I do not understand is the home was listed for $45K and you agreed to a price of $55K. Sometimes emotions get involved and we agree to things we shouldn't have.

Edited: 06/26/2010 at 01:11PM