Bidding 87% on HUD deals

[Pat Jackson]

I've read a lot about this, and know that HUD generally automatically accepts offers of 87-88% Anything lower is either countered or manually accepted later.

Say the asking price is $100,000. Is the 87% rule as simple as $87,000, or does one need to take commissions into account? If so, are HUD commissions generally 3% on each side. So if the price was $100,000, would one do this:

$100,000 x 0.87 = $87,000 x 1.06 = $92,220

I'd sure rather commissions come out of the 87k than get added on top :)