# Low balling HUD offer?



## rwh64 (Sep 16, 2012)

As i have been researching rural HUD properties, I have a question? Is there typically a reserve where these are concerned? Do they consider or accept low offers?... any answers would be helpful. Thanks


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## Smalltowngirl (Mar 28, 2010)

_*I found this:*_

Offers for HUD Homes can only be made through a licensed real estate broker. This way, HUD
requirements are met and buyers get the help they need. HUD will pay real estate
commissions if the commission amount is requested as part of the bid.
The initial listing price of each property is HUDâs estimate of current
fair market value and is based upon an appraisal conducted by an
independent real estate appraiser. *HUD may accept an offer that is less
than the listing price, depending on market conditions and the length of
time the property has been on the market*. In some instances, buyers will
offer more than the listing price if they believe the market conditions
demand it or if the home is particularly appealing. It is important for
buyers to be aware of the property values established by HUD and
submit offers knowingly.

http://portal.hud.gov/hudportal/documents/huddoc?id=DOC_12163.pdf


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## legacy (Oct 16, 2005)

Sure, you can come in with a low-ball offer, but just keep in mind that someone who really wants to property will give them their asking price and beat you out.

The first house I bought was a VA repossession and I offered the listing price. Very glad I did. Made a nice profit two years later, although that was not my goal in buying it in the first place.


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## Dusky Beauty (Jan 4, 2012)

I am at this very moment sitting in a HUD home I bought about 2 months ago. 

HUD does not look at these properties on a case by case basis. To them it's all only paperwork. The appraiser comes out, sets the opening price based on the market and that's the list price. It's the bids that dictate value. If the entire bid process ends (cycling through tiers of nonprofits, then owner occupants, then investors) with no buyers, then the home may be re-appraised to a lower list price and the process starts all over again-- this is extremely uncommon in my market.

The unpublished "reserve" is 5% less than the list price. My home was listed for 30k, We offered 28.5. Our bid was the only bid so it was accepted. These days people feel safe enough in the market to buy homes or investment properties in cash, and HUD refuses lesser offers. Plain and simple, they are going to get what they think it's worth if it takes a rotation or two, not sell it for 2k if that's the only offer they get in the 10 day period. 

We did a lot of detective work to make an educated guess as to how much interest it had-- we mainly went by the "sign in sheet" to see how many times a Realtor had been there. The only signatures were us being shown the home, and the maintenance crew, so we knew that if we had other bidders, they would be long distance bidders, and the add was awful-- it didn't count all the bedrooms in the description, the photos were terrible and it didn't show any trees, fences or outbuildings (And to us, that is where most of the value was.) Some of them don't even list the parcel size.


In my market the nice HUD houses usually enter a bidding war. I know of one in particular that the list price was 40k and the final sale price was 66k. It's a blind bidding war, so you need to just go ahead and bid your best price if you really want something in particular badly. If you're flexible you can be more cavalier in your bid to try and snag a deal. Your realtor has to handle the bidding on your behalf, and the good ones know subtle tactics like bidding odd numbers to beat other bidders' "mental price point" Our actual bid was something like $28,557.87, for 57.87 we took the chance that we would beat out someone else who bid the flat 28.5k.

We wanted this one in particular because the shared well goes to my mother's property only and this keeps the whole well in the family, but we had a very limited budget, so if we didn't get it we would have been primed to bid on other backups.

Edit: Forgot to mention, we looked at an estimate online of our home this week, and the property has already appreciated 20k since we moved in, probably more if we had an actual appraisal that could take into consideration all the livability fixes we've made with the plumbing, electric, septic, etc.
HUD puts a lot of effort forth in appraising these places so consider those list prices starting points. It'll take a lot of luck to snag them for less than that, or even the starting price.
They don't sit long, either. Our offer was accepted and we were in escrow before the real estate sites even had it advertised for sale. You have to follow the actual HUD website for listings. http://hudhomestore.com


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## TxHorseMom (Feb 21, 2011)

Dusky Beauty said:


> I am at this very moment sitting in a HUD home I bought about 2 months ago.
> 
> HUD does not look at these properties on a case by case basis. To them it's all only paperwork. The appraiser comes out, sets the opening price based on the market and that's the list price. It's the bids that dictate value. If the entire bid process ends (cycling through tiers of nonprofits, then owner occupants, then investors) with no buyers, then the home may be re-appraised to a lower list price and the process starts all over again-- this is extremely uncommon in my market.
> 
> ...


Dusky is right on the money. When we bought our first home about 25 years ago, we bought a hud home. We offered $1500 more than the asking price. we loved the home and didn't want to lose it. It ended up that there were 3-4 other offers. Hud homes are always priced under market value, so if you find one you want, you may pay a little more than asking, but you're still getting a good deal.


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