I've been reading a lot on the forums about how to bid on HUD properties, but I am still confused about how to approach a property that has had a first, and then a second, price reduction. Does the 88% net HUD rule still apply in each instance, or will the typically acceptable percentage drop on each price reduction? Any help would be greatly appreciated.
Have you made a bid or have you just been watching it go down? There is no real how-to for HUD properties because it can be market-specific and agent response related sometimes. If they've reduced twice, I would only expect to be bidding 10 percent under the new list price to have any success.
@Jonathan Greene I have not yet made a bid on the property. I read elsewhere on the forums that HUD will (always?) accept 70% net HUD on properties with a second price reduction. I'm wanting to verify that information. or perhaps it is market specific, as you suggest.
HI @Hans M.
My recommendation is to put the bid that you will take the property at in and leave it there. Choose the "Use as backup bid" button and it will hang out till it gets to the price you will take it at.The form takes less than 15 minutes (That's actually the time limit to fill it out). So just put your price and wait till it gets to you. I have bid for clients at less than 50% figuring it was a waste. A month later auto emails start flying in. We "put in a new bid of a token $500 more and it was accepted. It's happened more than once.
"I read elsewhere on the forums that HUD will (always?) accept 70% net HUD on properties with a second price reduction"
I would find that hard to believe. The way that has worked for me is 82% Net to HUD (The computer will accept and get the ball rolling). It appears to me that once it has been on the site long enough a human looks at the bids and picks one or initiates the counter offer process with all bidders.
There are no longer any absolutes as to what HUD will take after price reductions. At some point a lower offer in the 70% range might be accepted. Hud will typically manually review bids after a week or 2 when the property has received multiple reductions. Keep in mind, if someone nets HUD $1 more you are out
@Greg H. Thanks, good to know.