Realtor fees for bidding on HUD/VA homes

Foreclosures, Short Sales, Tax Foreclosures
1

What do you guys pay in realtor fees for bidding on HUD/VA homes?

One real estate audiobook I listened to said $500 was a good rate, and I’ve seen an ad for a broker on Craigslist for $1000…and that’s a big difference in costs.

Thanks!

2

Huh?

You should be paying $0…HUD pays the procurring Broker - and it’s higher than the 3% thye would normally get. They also pay the listing Broker a reduced percentage (they ar contracted with Brokers locally)…

3

Seriously? That’s good to know. I haven’t shopped around yet, and I’m glad to hear that. Maybe they’re charging a “buyers agent” sort of fee.

See his/her ad on:

http://dallas.craigslist.org/rts/259337984.html

4

I don’t pay my Realtor for regular houses that I don’t buy, why would I pay a HUD-qualified Realtor to make an offer?

Somebody’s playing “Who’s your Daddy?”!

Keith

5

I’m going to email that agent and see what they have to say… =) I’m curious why they’re trying to scam people. Maybe they’re trying to take advantage of the large amount of “new investors” that have been hitting the business lately

6

I have a good relationship with my Realtor and consider her a team-member…I have made all of my investment transactions through her as well as purchasing my private residence through her…

There are a ton of Realtors that can place a HUD bid for you…and it ain’t rocket science…

7

So Keith, you seem pretty knowledgeable. What kind of real estate holdings do you have [# of houses, etc], if you mind me asking?

8

I just moved so I liquidated all that I had…I’ll be starting up again soon, though…

NW Louisiana was great for investing. I could buy houses for $40-75K and rent them for $650-900 a month…but, it’s too freakin’ hot and humid in the summer for me (native New Englander!)

Keith

9

HUD offers agents a 5% fee, which is why a lot of them try to represent buyers. HUD looks at their total net, so if your agent is accepting the 5% and another wants 3%, you can both bid the same price, but the second buyer will win because HUD is getting the other 2%.

If the agent is accepting the 5%, your bid will need to be higher to accommodate the fee OR you can ask for HUD to pay less of your closing costs. I think they offer to pay up to 5% of closing costs.

I’d be careful with using what may be desperate agent. HUD is very picky with their contracts and it’s easy to miss deadlines. Yes, the actual bidding is not rocket science, but a sloppy agent can lose your deal. Since HUDs tend to be way below the average market price, the 5% is used as an incentive to entice the services of professional agents. Otherwise, because HUDs can be a headache, full-time agents may not feel they are worth the extra time for less pay.

10

Try reading the ad again. The agent is not scamming, he’s reducing his rate. On the HUD contract, the commision is a dollar amount, up to 5% of the purchase price is allowed. This agent is saying he’ll do it for just a $1000. I’d stay away from these type agents. HUD can and usually are a lot of work, especially with financing.
Oh, HUD now only allows 3% in buyers closing cost. This has just recently changed from the normal 5%.