How HUD process offers? Automatic responses or human review?

4 Replies

I came across this property in the MLS Link, and the realtor said that the HUD computer analyzes offers and automatically rejects offers less than 89% of the asking price. I viewed the property and I estimated $16k in repairs. Based on the asking price and repairs, I was wondering how much would be a reasonable offer? Realtor sent 4 comps averaging $137K with a small SD.

I'd say ARV = 137k x 0.7 = 95.9K

95.9k - 16k (repairs) -10k(closing, commisions) = 69.9K

Anyone with expertise in HUDs that can give me advise? 

Thank you, Javier

When you bid against HUD, you bid against a computer. So if your realtor says 89%, he/she is probably right. There's no reason when it comes to bidding with HUD... it's only math. But the good news is, if your offer is rejected today, you can just bid again tomorrow.

Also it looks like you have to owner occupy for the first year on that ("OK to lease after 1st year of ownership.")   I would advise you to consider that along with the condo fees.

Happy bidding!

The minimum for automatic(computer) acceptance is a net to HUD of 87-88%. At some point, usually 60+ days on the market, lower bids may be manually reviewed for acceptance. Currently, your bid would be less than 70% which with no apparent price reductions that I can see, has no chance of being accepted

Originally posted by @Javier G. :

@Noreen Eddy Thank you! I forgot to mention about 1 yr ownership requirement. 

@Greg H. Thank you! The property has 85 days on market already. I suspect my numbers are very close and offers are being rejected, so basically the asking is way off. 

 Unless its an owner occupant who would take the AVR and subtract the repair cost and be very happy!

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