Thread: New to HUD, need advice

It totally depends on the property, but HUD homes very often go above there asking price. What happens is there is a deadline in which all owner occupied properties can bid.

Hud will merely take the one that nets them the highest $$$. Another thing that can factor in what HUD will net is your Realtor's commission. The lower your realtors commission, the better the chance is you will get the property. Realtors can choose for their commission to be anywhere between 1 and 5%.

abarker is correct; I'd want to add that if you really want to get the HUD home, work out something with your agent where YOU would pay for the broker fees (2% of $150k would be $3,000 out of your own pocket) which would make your offer more appealing.

With ther current $8000 tax credit for 1st time home buyers, many lower priced homes are selling at and above the asking price. Listen to your professional advisor.

If you want to be sure, ask your agent to show you the sold comps for recent HUD sales. These should show you where the HUD houses are selling for more, if they are.

Check on the HUD website. Depending on what area you live in, you may be able to simply browse the most recent bid results (or even older ones if you know the property case number), like I know you can for FL. You may need to click on the 'details' in order to find the actual Purchase Price and not just the Net Price, which doesn't include the broker's commission, etc.

Of course, each house is going to be different and have its own circumstances. We are just buying our first house and it's a HUD property. HUD has owned it since Aug. 08. I think they initially listed the property for $130K but it didn't sell, probably because it had a big blue tarp on the roof. They then lowered the price to $125K, but it still didn't sell, so they put a new $9K roof on it, but they didn't bother updating their sales info/pics (or the price!). As it turned out, we were the only bidders. They turned down our initial bid of $98K, but accepted our next one of $102K. HUD netted a little under $94K. House has been inspected and is OK, needing only some minor repairs now.

Be advised not to trust everything in HUD's Property Condition Report. Ours stated that everything was in working condtion with regards to the HVAC, but it turns out at least the motor is bad on the outside unit, if not more. Unfortunately, it went out of warranty during the time HUD was sitting on the house.

We're also trying to determine whether or not HUD is required to 'procure', presumably at their expense, a Lead Based Paint Inspection, as we did initial the following (the house was built in 1964):

Any FHA Financing Except 203(k): This property is being sold subject to FHA insured financing under any program other than a 203(k) Rehabilitation Mortgage. Upon contract execution the Seller will procure a lead-based paint inspection and will deliver the inspection report to the Selling Broker by overnight delivery service along with a paint stabilization plan and cost estimate if deteriorated lead-based paint is found and a supplemental Lead-Based Paint Disclosure Addendum.

Also, if you're not very good at spelling/grammar, a job with the govt. might be your calling (joke about all the typos I spotted while reading over the contract).

Thank you all for your replies. We lost the bid by $400 net, which means we were right around market price, but not winners.

The good news is that I'm under contract on a different house.

Well, that's a good deal, as if your are with another contract. well HUD homes are initally offered to those who are buying home as a primary residence. also one can buy this HUD homes if they qualify for a loan.


Thanks!!