I am about to bid on a HUD property that has a $3,500 city special assessment. HUD lists that they only pay prorated amount of assessments on a property they own. We were considering adding that amount on the bid form under closing costs that we want HUD to pay.
If I bid the minimum that HUD will accept, then add the 3,500 to what I want HUD to pay in closing costs for the assessment, will that then make the bid too low and not get accepted? It affects the net that HUD would get but does it also affect the percentage that would be the lowest accepted?
It's also possible that HUD just will never pay for city assessments(road improvements, sewer, etc.) Does anyone know if it is just prorated and that's it that they pay?
I am not sure what type of assessment you are talking about but I would have you agent cLl the Asset Manager for that property and ask if HUD is aware of it and will be paying for prior to bidding. If you add to closing costs in your bid and it is not allowable you may have to forfeit the closing costs and the price will not be reduced. They are a few ways to spend the closing costs but it would be best to address upfront
The assessment is a road/sewer type of assessment. On the HUD package it mentions that they prorate any assessments. I just either want to confirm that they don't pay or how to address it, other than tomorrow.
I have purchased hundreds of HUDs o the last 20 years and always come across something new that has to be addressed from time to time. If you need answer tonight then you option is to bid on the property with the chance that you may have to pay it or address it with asset manager tomorrow and bid for Friday. The "assessment" that I read that clause to mean is for association dues for an HOA.
Agree with @Greg H.
If there is a road/sewer assessment, how would you pro-rate that anyway?
Another issue is that "usually" (but this may not apply in ALL states) but an municipal assessment is a LIEN against the property and all liens must be paid before the property is transferred, if "good, clear and marketable" title is to be conveyed.
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