Curious to know everyone's experience with how much HUD homes typically end up selling for in their local market, both for owner/occupants and investors? Are they selling for close to the asking/appraised value? or less or more?
I'm looking at a house that just got listed, I plan to occupy it for the minimum 1 yr, it's listed as IE - Insurable w/ escrow. Have 10 day exclusive period for OO.
Not sure if this is true for your area but I have purchased 3 HUD properties in northeastern Michigan and have found that, especially for properties that have been listed for quite a while, they are at least 50% below the most conservative comparable. That's why I like HUD more than Homepath/Fannie Mae properties which are usually much closer to retail prices. Hope that helps!
90 percent of asking is what I have been getting them. all investor purchased
I agree with George P. We've been able to get offers accepted by HUD that are anywhere from 5-10% below their asking price but I tend to wait until a property I'm targeting has been on the market for a while and has hopefully already been reduced a few times. Otherwise I've seen properties where there is a lot of early interest end up going for above HUDs asking price due to multiple bidders. Of course every market is different in terms of number of investors/owner occupiers bidding for HUDs. Buyers in my market here don't seem to like going for HUD homes (I think all the HUD disclaimers in the listing sound scary to most people) which give me some room to bid low.
Thanks for the information and perspective. I found a website, hudhomevalues, with all the accepted bids, which is very helpful too. Seems to vary from property to property, some go for more than asking, others for much less.
I ended up passing on the particular house in my original post, it had a large foundation crack that need to be addressed along with other major items and I couldn't comfortably get anywhere near the price they were asking. I'll be curious to see what it goes for though.
@Ryan K. Thanks for the website hudhomevalues, I'm just starting and thinking about flips and finding distressed hud properties at cheap prices and that website was very helpful. Still have plenty to read before I get too carried away.
I am a self admitted nerd...
I am also a HUD authorized Brokerage that makes offers on behalf of investors in Florida. To track things I created spreadsheets...
- Asking price here = 90% of market value
- On bids where you have stated you will be a "back-up" bidder, your agent will receive "counterbid" information daily
- Discounts are based upon # of days on market
- The discount is a percentage of the current price
- If you have a Brokerage that is good at it, they will know on what day a discount will happen, and what the new asking price will be.