After searching the HUD website, i located a property in my city up for bidding. The home is priced at 115k. Homes next to it have recently sold for 120k. I can assure you they are equal in size and features.
I went by the house to look closer at it. It is obvious a new roof and gutters are needed for both the house and detached garage. The siding is in bad shape as well. There are traces of mold in the home, although i dont know to what extent. I have not seen the inside, but from looking through the windows you quickly notice the work which would have to go into that as well.
Since i have never persued a HUD property, im not that familiar with the bidding process. With the repairs needed, you would have to bid far lower than the listing price to make a profit. Are you allowed to bid as low as you like? Also. does the HUD broker make a commission off the buyers bid? Or does HUD pay a bonus of some sort?
You need to find an agent that is “HUD qualified”…many are. If you are working with a Realtor, ask him/her. If they are not, try to get a referral to a decent Realtor that is.
Yes, you can bid what you want but HUD has an appraisal on-hand and has a “floor” price below which they will not go (they, of course, will not tell you what that number is). Around here (beofre they suspended HUD sales to use as hurricane shelters), the properties were going close to list anyway. I believe that I heard that they will not go less than 12% below list but don’t quote me on that.
The mold in the house is most likely a factor of the bad roof. When you find a HUD-qualified Realtor, he/she will have the HUD key and can show you the property.
Is it out of the Owner/Occupied period yet?
The HUD broker makes a commission for listing but it is low (either 1 or 2%, I can’t recall) and the selling agent and their broker make a little more than normal (like 4 or 5%)…
Have you looked at the HUD website? Usually, you can download the entire inspection report for the property (caution: the HUD inspection is done by a licensed/contracted inspector but my inspector does them and he says it is not as thorough as his usual inspections are!)…
Here in NYC, the hud properties have been going for more than the listed asking price, in some instances the offers have doubled. I gave up on hud homes here a long time ago.
I bought a 2 bdrm/1ba that needed mostly just heavy cosmetics and clean-up for $51,500. I put $3,500 into it ($55K total) and it rents for $650…when I went to do the cash-out refi, it appraised for $66K…
I bought a HUD house a couple of years ago. Just needed a good cleaning and some cosmetic work. We did a “rent - to - own” on it and the people renting it bought it about 6 months into it. Made $16,000 on it, and really didn’t stick much money into it al all. I have been looking for another one of these on the HUD website ever since
