HUD canceling my bid

31 posts by 22 users

Medium 1399495417 avatar mmcrae Mary M.
Real Estate Investor from Seattle, WA
31 Posts
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Mary M.

Real Estate Investor from Seattle, Washington

Jan 08 '11, 12:59 AM


Two days ago I put in an offer on a REO owned by HUD. My agent went to check on status of offer yesterday and said HUD had canceled my offer with no explanation. Can someone shed some light on why this may have been the case? Here are the details:

Asking $75K
My Offer $50K cash, close in 5 days (contingent on inspection)
Est Cost Repairs: $35K
ARV around 160K

Also, when my agent submitted offer she had said the website said there was only 6 hours left to bid on the property, but she didn't know for sure. I'm not sure if my agent is just not on the ball or perhaps inexperienced with HUD, or is HUD just 'like this'. I feel she should be guiding me through this process. Am I wrong?



Medium 1399320400 avatar lex Chris L.
Investor from Fort Wayne, IN
381 Posts
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Chris L.

Investor from Fort Wayne, Indiana

Jan 08 '11, 01:03 AM
2 votes


Mary,
I actually had an accepted offer by HUD that was canceled because I had the quick close option in the bid.
I was told that HUD closes in 45 days. Because our bid said that we would close in 15 days, they canceled our accepted agreement and put the property back on the market.
You might check and see if this is the issue in your case.
Good Luck
Chris



Medium 1398784765 avatar wheatie Jon Holdman
Investor from Wheat Ridge, CO
20931 Posts
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Jon Holdman Moderator

Investor from Wheat Ridge, Colorado

Jan 08 '11, 01:13 AM
1 vote


HUD also seems to have a guideline for the lowest offer they will accept vs. the listed price. At 66% of listing price, you are probably below such a guideline, if it exists.



Jon Holdman, Flying Phoenix LLC


Mary M.

Real Estate Investor from Seattle, Washington

Jan 08 '11, 01:17 AM


Both great responses! They definitely have their own set of rules. I'll let me agent know....



Medium 1399315588 avatar jonk Jon Klaus
Investor from Garland, TX
8545 Posts
3566 Votes
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Jon Klaus Verified Moderator Donor

Investor from Garland, Texas

Jan 08 '11, 01:20 AM


It could also be that the home wasn't yet eligible for investor bids. They give OO's first chance on many homes.



Jon Klaus, SellPropertyFast
E-Mail: [email protected]
Telephone: 214-929-6545


Medium 1399323558 avatar justdon Just Don
499 Posts
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Medium 1399404583 avatar planeguy67 Mitch Kronowit
SFR Investor from Orange County, CA
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Mitch Kronowit Donor

SFR Investor from Orange County, California

Jan 08 '11, 02:32 AM


Originally posted by Mary M.:
Asking $75K
My Offer $50K cash, close in 5 days (contingent on inspection)
Est Cost Repairs: $35K
ARV around 160K

My guess is the government knob only saw the offer price of $50k and chucked it. The words "cash" and "close in 5 days" only confused them. :crazed:



Mary M.

Real Estate Investor from Seattle, Washington

Jan 08 '11, 06:50 AM


My agent is saying that HUD only entertains prices within 85% of asking price. Is this consistent with what everyone has experienced? I am going to resubmit an offer and leave off the quick close. I'll let you guys know what happens!



Medium 1399491314 avatar graymack Mike Grayford
Rehabber / Flipper from Simi Valley, CA
596 Posts
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Mike Grayford

Rehabber / Flipper from Simi Valley, California

Jan 08 '11, 10:29 AM
1 vote


I have read that the magic percentage for a minimum bid on a HUD offer is 82%. Don't know if that's still the case, but it sounds similar to what your agent said. If you're comfortable with the 85% bid, I'd say go with that.



Jon Klaus Verified Moderator Donor

Investor from Garland, Texas

Jan 08 '11, 10:51 AM
1 vote


Originally posted by Mary M.:
My agent is saying that HUD only entertains prices within 85% of asking price. Is this consistent with what everyone has experienced? I am going to resubmit an offer and leave off the quick close. I'll let you guys know what happens!

I've won several bids at less than 85% of asking and 2 at less than 70% in the past 2 years.. However, I understand they've revamped their process over the past few months.



Jon Klaus, SellPropertyFast
E-Mail: [email protected]
Telephone: 214-929-6545


Mary M.

Real Estate Investor from Seattle, Washington

Jan 08 '11, 11:30 AM


Thanks Mike and Jon for your experiences. I think I might shoot for 80% and see what I come up with. They seem to get back to you the next business day. :D



Medium 1399374529 avatar alag Uwe S.
Property Manager from Dublin, OH
1557 Posts
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Uwe S.

Property Manager from Dublin, Ohio

Jan 08 '11, 06:41 PM


I think its depending on propertie list time, if you have an propertie listed since 21 days they will not sale for less than 85% but if you have interest on an propertie listed since 120 days with several price reductions you can try at or under 50%.
Check zillow for listing time.

-Uwe



Medium 1399289709 avatar blackhawk99 Mark Yuschak
Residential Real Estate Broker from Grand Blanc, MI
881 Posts
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Mark Yuschak

Residential Real Estate Broker from Grand Blanc, Michigan

Jan 08 '11, 10:03 PM


I've won HUD properites at half of asking price.

They use a combination of days on market, offer amount, property condition, and buyer type (OO vs investor). There's no set percentage that they will or will not take.



Medium 1448323178 avatar blackbelt Joel Owens
Commercial Real Estate Broker from Canton, GA
10247 Posts
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Joel Owens Verified Video Moderator

Commercial Real Estate Broker from Canton, Georgia

Jan 09 '11, 01:40 AM
1 vote


Recently because of Obama and bigger government HUD has undergone many changes.

There are now multiple MMR companies handling different parts of the country with their own set of rules.

On an broker/agent forum I frequent the new system is absolute insanity.It's like coming out with a new computer operating system that has 1,000 bugs in it when the old one was streaming along perfectly.

The brokers and agents are having fits with the new system not recognizing their offers,canceling them,showing active when pending,getting assignments when they are already assigned etc.

All I can tell you is these types of items are simply out of the brokers/agents control.HUD does have owner occupied periods but as an investor you can still submit your offer but it won't be considered until after that time.

Just submit it again.



Medium allworldrealtyJoel Owens, All World Realty
E-Mail: [email protected]
Telephone: 678-779-2798
Website: http://www.AWcommercial.com


Mary M.

Real Estate Investor from Seattle, Washington

Jan 09 '11, 01:50 AM


The property has been listed 24 days as of today, but I placed my offer probably on the 21st day. All of your insights are very helpful.

Great to hear from the broker perspective, Joel! It seems like a continual changing game for you guys.



Medium 1399496694 avatar stevecrawford Steve Crawford
Real Estate Attorney from Republic, MO
57 Posts
63 Votes
2 Awards

Steve Crawford

Real Estate Attorney from Republic, Missouri

Jan 09 '11, 09:15 AM
2 votes


I have done quite a few with HUD. This recent change Joel refers to is real and it is a mess. I think they are really starting to backlog inventory.

I have heard 85 -90% and that is usually where I go in, unless the DOM exceeds 60, then I drop down.

Always remember. First they want Owner Occupants (as well they should). Then they want (despite appearances), simplicity.

I usually tell them my price/offer, no contingencies, and close whenever they want.

If their price is too high and the DOM on too short, I wait. If someone buys it, it was either a good deal for an owner occupant or a bad deal for an investor. Either way, ok with me. I wait for that price drop, then i kick in at the 85-90 % mark.

Good luck.



Medium 1399366807 avatar memphis James Martin
Property Manager from Memphis, Memphis, TN
409 Posts
117 Votes
4 Awards

James Martin

Property Manager from Memphis, Memphis, TN

Jan 10 '11, 08:29 AM


A investor can bid when it is in extended round. I once put a bid in for over the asking price but lost the bid to an owner occupant. From my experience, they may have canceled because of the quick close option. I would use a reo agent that has the listing, they can tell you what to bid and they will not have to share the commission.



Mary M.

Real Estate Investor from Seattle, Washington

Jan 13 '11, 07:38 AM


Thanks, Steve and James. They denied my 2nd offer at 60K so I think I'll wait to see if it can accumulate more DOM, then revisit this one.



Medium 1400879112 avatar realestatestan Stan Jackson
Real Estate Broker from Fort Pierce, FL
221 Posts
90 Votes
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Stan Jackson

Real Estate Broker from Fort Pierce, Florida

Jan 14 '11, 03:44 AM


Mary, when you say "my agent" is this the listing agent or HUD approved selling agent?

The reason I ask is, HUD, like any other seller does listen to the advice of the listing agent.

If your agent is just the selling agent, HUD could be trying to wait for an even higher offer from you,imo!



Mary M.

Real Estate Investor from Seattle, Washington

Jan 20 '11, 04:04 AM


Hi Stan,

She is the selling agent, not the listing agent. I am watching this one to have it accumulate more days on market. Thanks for your advice!



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