What now?

I’ve been attempting to short sell buy a particular property in Texas via the usual realtor involved process. The deal fell through when the bank refused to authorize the sale.

Last week the bank bought the house back via the customary courthouse steps auction. The home will likely eventually appear on the HUD listing upon which I will then attempt to buy as an owner occupant.


  • Can I approach the bank now directly with an offer? If so, is there a formula upon which to base the offer given the homes current (and unoccupied) condition (I estimate it will need about $20k in repairs)? Or,
  • Am I better off to wait till it’s actually turned over to HUD?

Thanks for your insights!

If the loan is backed by HUD, then the loan is probably in a bit of limbo right now and you probably won’t be able to make a direct offer to the lender. (if it is a small local lender, you might try).
The Asset manager will take it over shortly and then you can make an offer. Shouldn’t take long at all.

There are many formulas for purchase price depending on your end use, which you don’t say. If you are looking to flip you will need a lower price than if you want to live there.

Definitely make them aware of the repairs needed. Get estimates and send them. If you are an owner occupant, you should let them know as they often get more favorable treatment than investors.

Just be aware of what other houses in the area have sold for and are listed for and make the offer you are comfortable with. A realtor may help you and won’t cost you anything.

If you can create a relationship with the asset manager then you might have a chance. Usually they will not work with you that way but it is worth a try. It is very common in OH where I invest that the banks buy back their properties. Keep an eye on it and you will be able to bid on it with HUD soon.

1 piece of advice though, don’t fall in love with this deal and wait on it. Go find 10 or more even better deals. Best of luck!