I am new to the whole HUD home buying. I am interested in a house that they have on the market. The list price is over $90,000, I want to put in a bid for $2,000.
My question is I guess is how close on avg do these properties sell to the asking price? $2,000 might seem crazy, but the building has lost its special zoning (which they do no disclose, this is the main reason the house was worth so much). Second the inspector lists rehab at about $15,000. I believe it to be closer to $60,000. The house is over 100 years old and falling apart, it does not meet code.
So is the broker going to laugh at me when I tell her I want to enter a $2,000 bid? Ha.
Any general information on buying a HUD home would be helpful. The bidding is still in owner occupied status so this rules out almost all investors correct? I would be trying to rezone it and rent out part of it later.
Generally, you can bid any amount you want but a $2K bid on a $90K property has a 99.9999999% failure probability…my opiinion is that it is not worth wasting your time or that of the broker. Usually, HUD will accept about 92% or more of asking – sometimes a little less. If they receive no bids in a reasonable amount of time, the asking prices is adjusted and the bidding starts over (9 days of O/O and then “All Bidders”)
You are correct, no Investors may bid during the O/O period.
Have you spoken with the city/county about the possibility of a re-zone?
Thanks for the response. I was thinking that it was a waste of time for the broker. Does HUD actually state somewhere that they will only accept bids that are a certain % of the asking price?
I just can’t believe they have the house priced that high. The properties been listed for about two months I believe(HUD Inspection was on 8/15). It was already relisted at $10,000 less. It was originally a four family, it lost that status due to vacancy. I talked to the town and they told me I could maybe get it back to a duplex, 3 apartments would be pushing it. Four apartments had been grandfathered in.
I was contemplating tearing the entire house down it was so bad. 60% of the roof is tarp, walls are damaged, leaking gas, plumbing is shot, etc. The $2,000 was pretty much for the land.
HUD specifically states if a house doesn’t sell within 6 months they will sell it to designated non profits at $1( I own a 501c3 but not am not qualified by HUB, plus I wouldn’t want it to be subsidized housing)…they will take my $2000 first…3 months to go lol, Someone will probably think they are getting a deal at $35,000 though. The appraiser really got this one wrong, but then again we don’t have many HUD foreclosures around here. They dropped it another $10,000, all bidder status, no takers. ;D