Bidding On HUD Homes

Frank Chen

Hi, this is Frank Chen with REIClub.com, the only site you need as a real estate investor. Today I've got a quick video on the bidding process for HUD homes.

Find a Real Estate Agent and Loan Officer

http://www.hudhomestore.com/HUD/Broke…
certified foreclosure real estate agent
interview the agent
local to area you are shopping in?
experience in foreclosures
experience bidding on HUD homes
electronic bidding
get loan officer recommendations from agent

Pre-Qualification Letter

Last 2 years W-2
Last 3 months bank statements
Last months Pay Stub

HUD Property Categories

IN – insured – Qualify for FHA loan
IE – insured w/ escrow – requires repairs and FHA will finance this into your loan
UI – uninsured – at least $5000 in repairs – FHA will finance
Note: HUD does NOT finance homes

Hud BiddingContract

Line 3: where you place your bid
Line 5: closing cost help – max of 5% of purchase
Line 6a: 5% commission paid to your agents by HUD
Line 6b: 1% commission paid to broker/listing agent by HUD
Line 7: Net Proceeds – all HUD really cares about

How Much To Bid on Hud Homes

Rule of thumb: 88-89% NET of Asking Price
Asking Price = $100,000
Closing Cost = $5,000 – not always needed
Agent Commission = $5,000
Listing Agent Commission – $1,000
Net Proceeds to HUD – $89,000

Hud Bidding Time Frames

Accepted Bids – same day
Selling Agent – 2 days to get contract delivered to HUD
7-14 days for fully executed contract
45 days for loans / 20 for cash buyers
Average 30 days for Cash, 75 for loans (max)

Having your bid “ACCEPTED” electronically does not mean the home is yours. HUD must receive the contract package in order to accept the offer. If you fail to send these documents, the home could be placed back on the market for other buyers to bid on.

Bidding on HUD homes using the “Rule of Thumb”, is the lowest acceptable number HUD will consider. This does not guarantee you will always win the auction, but this does give you a baseline to work with. Just remember to ask your real estate agent or lenders for guidance, further educate yourself on the bidding process, and find an experienced HUD agent. After a few bids, the hud bid process will become more familiar to you. You'll start to see trends in specific areas, and it will allow you to start making more accurate offers.

Again, this is Frank Chen with REIClub.com. Please take the time to leave your comments for this video below and please subscribe to our YouTube channel so you'll be automatically notified when we upload more quick video tips for you. Take care and good investing.