Investor · Guttenberg, NJ · Member since 2013 · 29 posts · 6 votes
I have been researching HUD homes in my region and have found a few I am willing to put an offer in on. I recall in podcast 38 Travis saying he would put in hundreds of offers on homes through a virtual assistant and if he wasn't interested not interested in that property he would not send in the earnest money. How can you (or your VA) make legitimate offers without EMD? Do you email the listing agent? Call them?
Investor · Madison, AL · Member since 2013 · 93 posts · 28 votes
12y
I have bought several HUDs this year. My wife is a realtor, so it makes the process easier. One thing that I did not know until a few days ago, HUD lists the last 14 days sales activity (click on Bid Results at the top of HUD Home Store). The dates, net to HUD price and the selling Broker are listed. You can create a spread sheet and all kind of good stuff surfaces.
Investor · Roswell, GA · Member since 2008 · 231 posts · 104 votes
12y
@Mark Ferguson is the guru in this area, but I will shed some light.
HUD bids are placed online and evaluated and accepted by the Asset Manager, so you do not need to email the Listing Agent. Once the contract is accepted, you have 2 business days to get the EMD check and paperwork submitted.
Rockford, IL · Member since 2013 · 330 posts · 62 votes
12y
My understanding is that The paperwork must be received by the HUD Asset Manager within 2 days. Since the Asset Manager usually is not local that means the paperwork has to be sent via overnight delivery. So instead of the 2 days everybody quotes and since HUD usually responds to winning bids in the afternoon, you really have one day to handle the paperwork and submit the earnest money.
Investor · Guttenberg, NJ · Member since 2013 · 29 posts · 6 votes
12y
@Mark Ferguson thanks, makes sense. How about a situation like Travis Daggett explained in podcast 38 - what happens if you have more then one bid out and they are both accepted?
@Stan Butler I know my broker is currently HUD authorized. I just got my real estate license this past week and plan on bidding on properties for myself. Is this kosher Mark?
@Edward Burns thanks for the heads up I'll make sure I have the time in advance to complete all documents.
@Robert Brubaker I do have any necessary cash required on hand so that's not an issue. If the documents are not submitted timely what do you mean they request the deposit? What would the deposit be for? I'm certainly not taking the situation lightly which is why I'm on biggerpockets!!!
Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
12y
If you have an accepted bid by HUD, they do not consider it under contract until you send in signed docs with earnest money and HUD signs. If you have an accepted bid and don't want the property, tell HUD you don't want it. Happens all the time and HUD will not punish you.
If your broker has a valid NAID number and you hang your license with him, you can bid all you want as long as he is not a listing broker for HUD. It takes about 5 minutes to register as an agent and you can start bidding immediately.
I am not sure what Robert meant, by HUDs request for deposit. You don't give anything to HUD phyisically until your bid si accepted and if you don't have the required paperwork they won't take your earnest money. If you send them everything correctly and they sign the contract and then you back out, then they will take your deposit.
Investor · Miami, FL · Member since 2012 · 136 posts · 5 votes
12y
So can you place bids as an investor with the listing agent directly so you do not need a "hud registered" agent representing you as a buyer? im reading some conflicting posts on this. I personally want to start making HUD offers, can I have the listing agent be my "hud registered" agent? or do I have to find a buyers agent to submit all these bids for me?
Some listing agents will require you to use a different agent while some will not. While if you negotiate a different amount for the commission it might may a slight difference, but realistically HUD pays the agents so using the listing agent versus a different agent will probably have no affect.
Investor · Miami, FL · Member since 2012 · 136 posts · 5 votes
12y
Does HUD have a maximum commission they pay the listing agent? if so, they would net more if no buyers agent was used. Which Im under the impression they only care about what they net from the sale. I guess what I really want to know is do I need to find an agent to is willing to put in 100s of offers for me a week?
You should ask yourself if an agent submitted 100 for you and let's say HUD accept 50 do you have the cash to close if not you burnt the bridge with the realtor and news travel fast among realtors say don't trust so, and so he has no funds to close.You should do your due diligence before you submit offer.
Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
12y
@Mike Nelson the listing agent gets 3% every sale. (Assuming its not good neighbor a government agency or non profit buying ). If you want an agent submitting a ton of offers, your going to need to pay them the full 3% on the buyers side.
Investor · Miami, FL · Member since 2012 · 136 posts · 5 votes
12y
Wouldn't it be better to have the listing agent submit the offer so HUD nets more? Vs having a commission paid out to two agents and HUD nets less?
Seems to me Ive heard other investors make multiple offers on HUD homes simultaneously, also as Mark stated above if you dont sign an accepted offer and send in the EMD you are not bound to buy the house.
So I guess to answer my question, as an investor who has cash to close several homes, do I need to find an Investor friendlly HUD agent who will have to put an offer in for me every day? or can I just contact the listing agent of the HUD listing and have them submit my offer? This is all Im asking, someone who is a HUD investor please answer. Thank you.
Rockford, IL · Member since 2013 · 330 posts · 62 votes
12y
First, you are wrong about the commissions. If you have any agent, whether they are the listing agent or not, submit the bid for you, they are entitled to the 3% buying agent fee. Using the listing agent does not mean he or she gets 3% as the listing agent and nothing else. Again from your standpoint and HUD's standpoint, there is nothing to gain by having the listing agent submit the bid.
Investor · Miami, FL · Member since 2012 · 136 posts · 5 votes
12y
Edward,
I appreciate your response, but am confused.
"f you have any agent, whether they are the listing agent or not, submit the bid for you, they are entitled to the 3% buying agent fee."
So if the listing agent submits the offer "they are entitled to the 3% buying agent fee." So the listing agent just got his/her 3% commission. HUD sells me the home.
Now,
"Using the listing agent does not mean he or she gets 3% as the listing agent and nothing else."
I used the listing agent, as stated above in your quote "they are entitled to the 3% buying agent fee."
So in short. Hud Home is listed for 100k. I offer the full 100k to the listing agent. HUD pays listing agent 3k, HUD nets 97k. (neglect closing costs for example)
OR
I use other agent, they submit bid for 100k, they get their entitled 3%, or 3k. Listing agent gets his commission (3k or whatever it is). Neglect closing costs for example, HUD nets 94k.
Im sorry guys, Im just not following.
I mean this in all politeness by the way. I do not want to sound arrogant or rude. I am new to HUD and can't seem to get a grasp. Again, please bear with me.
Residential Real Estate Agent · Cookeville, TN · Member since 2013 · 1k+ posts · 948 votes
12y
@Mark Houghton - I will repeat my standard mantra again.
If you will be buying and/on selling using the MLS, then go ahead and become an agent yourself. You won't regret it, I guarantee it. And yes, HUDs are on the MLS (even thought the offers go on through the HUD website). In the amount of time that it takes you to contact your agent, I've already made an offer myself.
Involved In Real Estate · Potomac Falls, VA · Member since 2012 · 203 posts · 31 votes
12y
I do this too, but I'm licensed in VA.
The person placing the bid has to be licensed in the state in which the property is located. Your Realtor can do this for you. Bidding on HUD homes takes like 2 minutes per bid, so it's really not as big a hassle as writing a typical offer on other properties.
You DO NOT send in an EMD until your bid is accepted. If you're bidding on hundreds of homes, the likelihood of you having seen the property before bidding is pretty low. So, what I do is bid until it's accepted. Once accepted, I rush over to the house to make sure it's something I'm ready to follow through on. If not, I do not send in the EMD and let the listing agent know it's not going to happen. If it's a GO, I get the paperwork in ASAP. You only get 48 hours to get a hard-copy packet to HUD through the mail, so get scrappy! It can be a fun roller coaster, I hear.
Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
12y
@Mike Nelson , the listing agent is paid 3% for their listing duties with HUD. They get laid 3% whether they work with the buyer or not. Why would they then work for free on the buyer side too just because the buyer wants to save money?
It is easy submitting a bid for a buyers, but not easy closing the rest of the transaction. The agent must verify buyer info, follow HUD guidelines which are very strict on contracts, send in all the docs originally signed by the buyer in 48 hours, set up inspections and get utilities turned on (buyer agent responsibility) respond to HUD in less then 24 hours in all contract corrections and take liability or all the buyers actions. If the buyer repairs the house before closing or pretends to be owner occupant when they are an investor that agent most likely will lose his NAID and ability to sell HUD. There goes hundreds of thousands of dollars in revenue.
If you want to save money become an agent. The agent is my just making commissions, he is paying mls, e and o insurance, office bills, splits to the broker, and board dues. Not to mention all the registration and membership dues it takes to be an Reo and HUD agent.
If the agent is like me, he won't be submitting your bid, one of his buyer agents will be. Your asking his agent to spend hours and hours on work for you for free.
OK, I understand you are confused. Using your example of buying a HUD home for $100K. The listing agent gets $3K and the Buying agent gets $3K, assuming no closing cost HUD gets $94K.
If you have the listing agent submit the bid, the listing agent gets $6K ($3K as listing agent and $3K as buying agent), HUD gets $94K.
Do yourself a favor go to HUDhomestore and read all the FAQ's . Then find a property a print out all the sales forms you can (if I remember correctly there are 1 or 2 that I could not print when I bought my last place), this will allow you to see all paperwork which must be completed properly (remember you are dealing with the government so all i's must be dotted and t's crossed for the bid to be successful). My original paperwork on the last HUD home I bought (in June 2013) needed to be refiled because of an error. The error was we submitted one form that was out-of-date (date of the form was 2004) and they created a new one (dated May 2013). So it had to resubmitted. Note: nothing but the date of the form edition was changed. Thankfully, we given 48hrs after the original submittal to resubmit the proper paperwork. But that meant I had to drive 150 miles to sign the form, my agent and his broker both had to interrupt meetings to sign the form (only the broker can officially sign HUD paperwork) and then the agent had to get the paperwork to FedEx and ship overnight.