Hud house reduced sale.


REI Newbie here. I would like to post this question and hear what people think. There is a HUD foreclosure in my area that was originally listed for 44.5k. It has now been reduced to 26.5k. I have gone by the house it it appears to be in great shape other than a few cosmetic problems. It also has a non working furnace and appears to have a leak in the plumbing (air pressure test). It has been inspected by HUD before being put up for sale and has signs of lead based paint and a couple of other minor flaws. My question is could I offer HUD a lower price, kinda of like a short sell to an REO. Has anybody done this. As is it’s listed 18k below value. My estimates and comps put this house about 50k ARV. Why the sudden price reduction? Are they tired of holding it? My exit strategy would be to flip. Estimated repair would be 5K with reserves.

Any comments negative and positve would be appreciated.



It would be a good idea to look at it inside also to see what happened on the inside. Sometimes foreclosures can get trashed by the owner pretty bad. Also if there is leaking in the plumbing could it be from frozen pipes? If there is a “small leak” from freezing most likely there are more. Plumbing can get expensive. I currently have an offer in on a foreclosure with some frozen pipes and interior damage from the owners, it was purchased at sherrifs sale for 70 k in Jan by the bank, put on the market and price was just reduced to 61.5k and I offered 55k and asked them to pay up to 3k in closing costs. You can taylor your offer any way you like, I have found sometimes with foreclosures they will counter offer your offer. I feel you have to start somewhere just like any other offer. Good Luck! Graciez

HUD typically makes price reductions in 10% decrements.

If you go to the local management company’s website for HUD you will see the bid results and bid statistics which will give you the history of the bid amounts. HUD will not accept a low-ball bid but would rather keep reducing the price every 3 - 4 weeks. In the event you place a bid, the lowest net bid (gross prices less any closing costs & real estate commission) HUD typically accepts is no lower than 88% (in Colorado). The website for Colorado is

Exactly, but now I have seen offers at 85%. The program has gone through a lot of new changes in teh M & M companies.

HUD is not operated like most REO companies. Thier rules are not influenced by human decision. If your offer isn’t around that 15% off net to seller, don’t waste your time.

Don’t compare buying HUD properties to other REO properties. They do not have the same procedures and rules.

Well said… Yes - HUDs and REOs are like apples to oranges.

I wish HUD would go to the 85% net here in Colorado. My Broker is a Local Listing Broker for HUD and listed 600+ HUD homes in 2005 and I have not see any go under the 88% net.

I just can’t undersatand why there would be differences within their program. Just doesn’t make sense. I’ve heard of other little differences from other parts of the country too. But reading the different HUD M&M companies websites, they bidding and other procedures seem really alike.
Oh well, at least in FL you can clip them at 85%.