Owner occupant HUD bidding

12 Replies

I found a HUD I wouldn't mind living in after doing a complete rehab. Does anyone have experience with bidding in the OO period? Will they accept lower than asking prices, or just wait until the invested period hoping for higher bids? Any recommendations would be appreciated.

Cheers, lex

Hud is a bid process that depending on demand might take higher or lower prices . It is up to you and your agent to determine a price /

Right but exclusively during the owner occupant period does HUD accept below asking or would they just wait til the open bid period I think Alex is asking here. I'm not sure how "internal guidelines" are found but here's some info regarding the hud process:

HUD will review all offers received from owner/occupant bidders during the priority period. If HUD does not receive an offer meeting internal guidelines the listing opens up for bidding to any qualified buyer, including owner occupants and investors. Bid Deadline is DAILY at midnight.

PRICE REDUCTIONS – Owner Occupants First for 5 Days

Sometimes a property does not sell during the open listing period. After several weeks HUD will reduce the price on this property and publish the re-listed property on a Friday. The first 5 days following a price reduction the property is available to owner occupants only. This shortened priority period ends the following Tuesday at midnight. From time to time HUD listings experience several consecutive price reductions.

OPEN PRICE REDUCTIONS – All Bidders DAILY

Should the property still not sell during the shortened priority period, it then becomes available for bidding to all qualified buyers again. Deadline for bidding is DAILY at midnight.

RE-LISTINGS – Owner Occupants First for 5 Days

Occasionally a property that was already in contract falls out of contract. In that case HUD will offer the property for sale again and re-post the listing. The price may be the same as before or reduced. A re-listed property is available for owner occupants only during the first 5 days. These bidding deadlines fall on a TUESDAY at midnight.

Open RE-LISTINGS – All Bidders DAILY

If the property does not sell during the priority period for owner occupants, the listing will open up to all bidders with a daily deadline at midnight.

Originally posted by @John T. :

Right but exclusively during the owner occupant period does HUD accept below asking or would they just wait til the open bid period I think Alex is asking here. I'm not sure how "internal guidelines" are found but here's some info regarding the hud process:

HUD will review all offers received from owner/occupant bidders during the priority period. If HUD does not receive an offer meeting internal guidelines the listing opens up for bidding to any qualified buyer, including owner occupants and investors. Bid Deadline is DAILY at midnight.

PRICE REDUCTIONS – Owner Occupants First for 5 Days

Sometimes a property does not sell during the open listing period. After several weeks HUD will reduce the price on this property and publish the re-listed property on a Friday. The first 5 days following a price reduction the property is available to owner occupants only. This shortened priority period ends the following Tuesday at midnight. From time to time HUD listings experience several consecutive price reductions.

OPEN PRICE REDUCTIONS – All Bidders DAILY

Should the property still not sell during the shortened priority period, it then becomes available for bidding to all qualified buyers again. Deadline for bidding is DAILY at midnight.

RE-LISTINGS – Owner Occupants First for 5 Days

Occasionally a property that was already in contract falls out of contract. In that case HUD will offer the property for sale again and re-post the listing. The price may be the same as before or reduced. A re-listed property is available for owner occupants only during the first 5 days. These bidding deadlines fall on a TUESDAY at midnight.

Open RE-LISTINGS – All Bidders DAILY

If the property does not sell during the priority period for owner occupants, the listing will open up to all bidders with a daily deadline at midnight.

 I have seen several threads where people have talked about different rules of thumbs of a percentage to start below listing for the bidding process. Would the smart bet be to follow your realtor's lead on the starting bid? One thing that I have seen a lot are people saying that you can never start bidding too low, as you can simply just rebid. 

i think the risk is if you bid too low you can rebid but the owner occupant period will pas and now you'll have investors as competition.  So alot of guisance out there about bidding during investor period below asking price but I haven't been able to find any about bidding under asking price during the owner occupant theory 

Thanks all for commenting, it sounds like there is no one out there with experience bidding in the owner-occupant period.  I'll give it a try and let you know how it goes.

@Alex Gruenther  

Typically in the owner occupant bidding period you are going to have to NET HUD 87-89% of the list price. The lowest I have heard is 85% and the highest is 91%. Again that is net which includes all commissions and closing costs requested

I actually list and sell HUD owned homes in West Michigan. Me and my associates have listed and sold more than one hundred HUD properties over the past couple of years and have learned a lot. I'm not sure there is any particular "rule of thumb" nationwide but from what I've seen Greg H is pretty on the mark. My rule of thumb has always been the bid should be 90% of what they are asking. Some say net to HUD has to be 80% of what they are asking.

Work with someone that knows values in the area. Most of the time HUD prices their homes pretty in line with the market but there are the exceptions. I have seen them under price homes on occassion and quite frankly currently have one listed for them they stuck a price tag on that's about twice the market value for the area. It is also extremely important that you are workng with a Realtor that knows how to deal with HUD. I have seen too many nightmares of people working with an agent that just isn't familiar with how HUD works. It can slow the process down and sometimes make you lose the deal. I suppose that would be true for any bank owned home as well.

   

Robert Breen, Real Estate Agent in MI (#6502376288)

I couldn't make the numbers work so I went for a bid at 81% of list. I knew that I wasn't going to get the property when I was bid #32, and that is the case.  Back to looking for a property...

Check out www.hudhomevalue.com for your area. It shows trends and statistics about the accepted price vs list. Usually what I have seen is between 95 - 105% of list in the OO status. That doesn't account for properties needing rehab work though. The longer they are on the market the less they will take, sometimes well below 45% of original list. There are some great deals there if you are patient, also a little hint, bid daily don't wait to hear back.

Originally posted by @Christopher Goldie :

Check out www.hudhomevalue.com for your area. It shows trends and statistics about the accepted price vs list. Usually what I have seen is between 95 - 105% of list in the OO status. That doesn't account for properties needing rehab work though. The longer they are on the market the less they will take, sometimes well below 45% of original list. There are some great deals there if you are patient, also a little hint, bid daily don't wait to hear back.

I haven't ran across this site before, this looks like a great way to do some historical homework on the HUD sales. Thanks!

@Alex Gruenther

If you are going to owner occupied you have an advantage to bid before any investors can bid.  The lowest bid doesn't always get he property, sometimes the bids are for more than asking price.  I've successfully gotten many house for myself and others.  The last one I got at 56% of asking price, but it had been on the market for 100 days.  They are much more flexible on price as time goes by.  On the other hand on one house I bid $30,000 OVER asking price and didn't get it.

Yeah the HUD asset managers are funny. I picked up a house a few weeks ago for $140,000. Turns out I'm now selling to a guy who bid $165,000 a week or so prior for $155,000. Absolutely no reasoning why HUD took my lower offer over his higher one, but I'm glad they did! And his agent even checked the hold as a backup offer, both were done as cash sales, go figure? He's happy, I'm happy, win - win. Close Tuesday next week.