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While this method of bidding can be a good academic exercise, it can consume a great deal of time (new paperwork must be executed for each subsequent offer) and it can be disappointing if another buyer's bid is accepted before you find the lowest net return to HUD. The U.S. Department of Housing and Urban Development is the FHA's parent agency and it offers many homes for bid purchase. HUD homes range in condition from very poor to excellent, and all come with clean titles free of past liens. HUD also uses a specific process to determine the final bid price it will accept on one of its homes. HUD Home Pricing When HUD takes a home into its inventory it has a HUD-approved real estate appraiser go through it. HUD expects higher offers for newer listings, although bids on new listings can be lower than the list price. If you find a home you want to bid on that has been listed for 90 days or longer, HUD might accept less than 85 percent of the listed price. We suggest that you submit a reasonable, but low offer first a say 65% of asking price. If there are no other bidders, HUD will counter with a number they will accept. The counter offer HUD sends out is the NET amount they will accept, so you have to add the Determining the Minimum Acceptable Bid for a HUD Home. by Mike on November 2, 2007. In order to buy a HUD home, your offer has to meet two criteria. First, your offered price has to beat your competition. Second, your offer must meet the super-secret HUD minimum acceptable bid. If the home has been listed for three months or more, you will have more bargaining power. The low-ball offer is a safer strategy in this scenario. If the listing is new on the market, HUD will generally accept 85 - 88 percent of the list price as net proceeds to HUD. This means if you offer an amount that allows them to net more than 85 percent of the listing price, there's a good chance they'll accept your offer. See the 88 percent strategy below. At that time, when a property first hit the HUD list, the minimum bid was 87% of list price. However, the minimum bid dropped to 80% after 60 days. Which brings us to the second pointthe minimum bid is a function of time on the market. When the housing market hit the skids, the HUD minimum bid calculation changed. By the time that Rob and I bought The Loft (click here for the name explanation), the How can I buy a HUD home? Answer: Read our section on how to buy a HUD home. Then look at the listings of HUD homes available. If you find a home that interests you, you'll need to contact a HUD-approved real estate broker (most brokers are HUD-approved), who can submit a bid for you. Successful bids are posted right on the page for your state. For more information, you may also contact our FHA Resource Center by email at answers@hud.gov or by phone at (800) CALLFHA. For insured homes: 1 15 day owner occupant, government agencies, and non-profit only bid period. The first ten days of this bid period HUD collects all the bids and subsequently reviews them on the next business day. Thereafter for the next five days, HUD reviews any bids received the following day. HUD allows your agent to put up to 5% commission you have to agree to that. So if the listing price is $100,000 HUD will allow basically $83,000 net to them. Ok you have $3,000 agent commission and probably and figure 1% for closing fees to be safe. If you ask for HUD to pay any of your closing cost that come out of the net. Query: how low of a bid will hud accept?
If you find a home you want to bid on that has been listed for 90 days or longer, HUD might accept less than 85 percent of the listed price.