HUD Foreclosures-Need Help !!

Can anyone out there shed any light on HUD Foreclosures? I understand that as an investor, I will be getting secondary consideration to anyone wanting to buy one of these houses for themselves to live in. (O/O) If O/O offers are not accepted and HUD looks at investors to sell the house to, do you have any idea what kind of percentage of the “list price” HUD would accept. The listing realtor said they may consider 80% of list. Does this sound accurate ??

Any other pointers on HUD Foreclosures would be of great help.

Thanks in advance.

As an investor, once the O/O period has ended (9 days), you no longer get secondary consideration. After the O/O period, it is ALL about the bottom line or what HUD refers to as the “Net to HUD”.
As an investor you CANNOT even bid during the O/O period.

I think that the 80% figure is low. I have heard (though HUD will not publically state), that about 88-92% is more realistic. I have seen HUD reject offers, have the property not sell, and then reduce the price. If the price is adjusted, the process starts over based on the new price with 9 days of O/O, then open bidding.

I also think the process is very “regional”. Here, the decent ones tend to sell a bit over list price. Some of the "yucky’ ones sit a while and take a couple of price reductions. In the right area, you can get decent prices on the properties, especially if there’s a lot of cosmetic work to do.


First off, I agree with everything Keith says - especially the regional part. In my geographic region (central Texas), HUD homes are usually snatched-up by brokers/agents during the “open bidding” period. I got my lone HUD f/c at 90% list, HOWEVER, it was about 75% ARV (with <$1k of repairs needed).

Thanks you guys for the tips !!

I greatly appreciate people here who are willing to share their life’s experiences and not just regurgitate something from someone’s book who hasn’t done it either !!

Your input is treasured !



I’d only add that it is critical to use an agent that thoroughly understands HUDs. If you don’t it will cost you big money. In KY most properties will go for considerably less than list. I’m in IN and have gotten properties for as little as 36% of list. When you find the right agent, be ready to buy. New properties come on every Friday. There is a 10 day simultaneous bid period for owner occupants then the property goes to open bid. Most of the good properties will sell the first day. Bids are accepted until midnight and results are posted the next day. HUD works on a highest net bid system. Your agent will build in a 5% commish. It’s entirely automated and you could literally miss system requirements by $1. If your bid is accepted, you have 48 hours to submit the paperwork. I usually checkout the property to see if I want it in the 48 hour period. My system has allowed me to get an average of 3 a week. Not all for me though.

Find a good REALTOR

Housebroken -

There is a little irony in what you said in regards to my HUD purchase this past spring. My RE agent knew NOTHING about HUD foreclosures and the bid process. I knew nothing, either, so we were both learning along the way. However, this actually worked to my advantage. I put a bid for $101k on a $112k list price. My agent submitted my bid, but didn’t realize she had to factor in her commission beforehand. Therefore, my $101k bid was taken as the net to HUD (excluding a few other seller fees). She realized her mistake too late. Therefore, she got $0 (although I did give her a small commission out-of-pocket at closing, but it was strictly generosity from my point). So in my case, I benefited from an agent with no HUD f/c knowledge.

Hi Stephen,

I’ll bet the agent won’t make that mistake again. Anyone who works the HUD market will tell you that the 5% is great, but it’s a ton of work. In a 100 hour work week, it’s not uncommon to spend 35-40 hours doing HUD research.


A local realtor told me 99% of HUD homes in the Austin area go to owner/occupants. Does anyone in-the-know agree or disagree? If that’s the case, I won’t waste my time going through the bid process.

Hey Kl,

Bidselect posts HUD properties in Texas and they’re not as high tech as some other states. Doesn’t look like there are enough HUD’s in Austin to make a living but I did see two potential great deals. Look at case #495-637271. Looks like this property can be purchased for 55600. As is value was 97000. Looks like a high % go owner occ.

Let me know.

Thanks for the info Housebroken. Again, kudos to my on-line friends here for all the help.

It appears that a lot of the HUD properties go to O/O here in Kentucky also. I think that’s fine. There are a lot more deserving prople out there who want to make these their homes and not just an investment. I’m fine with that. BUT . . . . I better not find that first person bidding as an O/O but really acting as an investor. I will absolutely pull the (legal) trigger on someone I catch doing that. I know of a realtor here in No. Kentucky who has been doing that. BEWARE . . . .

Thanks again all . . . .

<<BUT . . . . I better not find that first person bidding as an O/O but really acting as an investor. I will absolutely pull the (legal) trigger on someone I catch doing that. I know of a realtor here in No. Kentucky who has been doing that. BEWARE >>

I’m with you Gr8! This program is really to help htose that might not otherwise be able to afford property…it is one of the Federal programs that is relatively efficient. I would not hesitate to report violations…the nice part is, that because it is a crime against the Federal government (Fraud), the investigating agency is the FBI! There are also relatively severe penalties against the Realtor and his/her broker for assisting the Fraud.


Don’t overlook the importance of the Investor’s role with HUD. What is the economic impact to the community when we buy a home in disrepair, rehab it and provide suitable housing. Quite often the tenant or homebuyer is from low to moderate income. The by- product of what many of us do is affordable housing. It is good for the neighborhood and good for the community. HUD counts on investors like us for community revitalization. The depth to which HUD provides incentives to investors is explained on their site.

Cheaters will eventually get caught.
Take pride in your work and your reputation.


Thanks, housebroken, for the tip! I’ll check it out.