Making an Offer on a HUD Home ... as an Investor
Many of you have heard me make reference to "primary residence dwellers" having first dibs on HUD homes when it comes to bidding and purchasing a foreclosure. Here's an excerpt from a RealtyTrac article that explains it perfectly:
"In many ways, the home purchase process on HUD homes is much more simplified than the conventional way of buying a home.
The initial listing price is determined by HUD to be an estimate of the property’s current fair market value (FMV). The FMV is based on an appraisal conducted by an independent real estate appraiser.
The property is then put on the market for what is called the Initial Listing Period, during which time HUD will receive offers on the property. The first offers to be considered will be those submitted by potential owner-occupants of the property. It is not until after HUD has exhausted all of those offers that it will even consider offers from other interested parties such as real estate investors.
The highest priority is given to offers submitted by potential owner-occupants during the first 10 calendar days of the listing period as follows: offers submitted during the first five days will be considered to have been received simultaneously. On the first business day following those five days, the owner-occupant bids will be reviewed and the highest acceptable net owner-occupant offer will be accepted.
If no bid is accepted, then owner-occupant bids will be reviewed on a daily basis. If after that time no owner-occupant offer is accepted, then offers made by the general public during the 10-day period will be reviewed.
Depending on such factors as time on the market, and the current market conditions, HUD may accept an offer on the property for less than the initial listing price. Once an offer is accepted, escrow on the transaction will normally occur within 30 to 60 days."
(via an Excerpt from RealtyTrac)
Good luck if you're bidding on a HUD home!
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Blog by Cassandra Black
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