HUD canceling my bid

REOs 14.4K Posts 1.7K Discussions

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?

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

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

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

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 | [email protected] | 214‑929‑6545

could be as simple as a typo or wrong numbers submitted.

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:

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 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.

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 | [email protected] | 214‑929‑6545

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

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

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.

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 | [email protected] | 678‑779‑2798 | http://www.AWcommercial.com

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.

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.

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.

Medium imageJames Martin, JK Homes | [email protected] | 901‑352‑1345 | http://www.jkrealtyservices.com | TN Agent # 320422

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.

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!

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!

Im not sure what the deal with hud is but the same thing happend to me today,we posted a bid last night asking price was 13k i offered 12k my realtor seams to think since its a fairly new lising that hud wants to keep it on in hopes of getting over the asking..ive been trying to bid on houses for the last 2mths and ive been getting out bid now i find 1 cheap thinking im definately getting it but no i get canceled..so now im on the internet trying to find answers

HUD doesn't allow an inspection contingency. Additionally, they have their own guidelines for closing. I have found that the minimum acceptable bid (at least for the properties I have bid on) is 88% and then drops after 60 DOM. Also, bidding technically ends everyday at midnight so when it says 6 hours left it just means for that days bidding, which resets the next day if no acceptable offers are received. I would try to get a hold of a real person to discuss the bid, as HUD does some weird things and this can be helpful. I had an acceptable bid being held as a backup offer on a property and a month later found the property on the MLS relisted. My broker called HUD and was able to get them to take the property off the market and award it to me since my bid was previously deemed acceptable.

It is critical to work with a licensed and "experienced" HUD agent that has had previous bids accepted on other properties. HUD is very particular when it comes to rules, ie: sign paperwork in blue ink only

HUD accepts all ranges of bid amounts as a percentage of list price.
I would say getting 49% is rare.

My best advice is buy a HUD Bid report for your HUD house's Zip Code.

best of luck...

We had a couple fall through
We had given good size earnest $ deposits.
But apparently HUD had a problem getting clean title so cancelled the deals returning our $.
Several months later the properties came back up but we had moved on.

I've had several counter offers from HUD and it always seems that their bottom line is 82% net to HUD.

In the past, they would take less. There was a time in 2009-2010 that certain house said "any and all offers considered". I was able to get a couple house for 25% of asking.

For about the last year, 82% seems to be their bottom line. That is after commissions are paid, so you need to add commissions on top of the 82%.