ou have found your dream estate agent can cost you
home and it is a HUD thousands of dollars in mistakes.
foreclosures. You have done Again, you have to use a real
a walk-through of the HUD house estate agent to buy HUD
and it seems to be in good shape, foreclosure listings.
just a few minor repairs.
2. You do not have to offer the
Unfortunately, you have already list price. HUD home foreclosures
made a major mistake. Your real are listed at FHA appraised
estate agent, who is your uncle, “market value”. It is my
has never sold a HUD home experience HUD foreclosures are
foreclosure. He does not have any listed somewhere within 20% of
idea how much you should offer market value either too high or
for a HUD foreclosure. Your uncle too low.
is not a lone; most real estate
agents are not experienced in HUD 3. If the HUD foreclosure listing
foreclosure listings. is new on the market, you will
not get it for 50% off the list
First, a little about what you price. You are wasting your time
can and can’t do when buying HUD on a low ball offer. But, if the
home foreclosures: HUD house has been on the market
3 or 4 months then a low ball
1. You cannot buy HUD offer might work.
foreclosures without a real
estate agent. A real estate agent 4. HUD will pay up to 5% of the
does not have to take special purchase price for buyer’s
training to sell HUD home closing costs. The amount of
foreclosures. I personally think buyer’s closing costs you want
they should have mandatory HUD to pay must be on the initial
training. An inexperienced real bid form.
back up to the figure you don’t
5. HUD will pay up to 5% of the know, the offer price.
purchase price for real estate
agent commissions and it also You know what you want HUD to net
must be on the initial bid form. and what costs HUD will pay.
First, you want HUD to net
Ok, so what do you offer? The $88,000 ($100,000 X 88%). You
bidding process for HUD want HUD to pay $3,000 of your
foreclosures is just a numbers closing cost and pay your uncle,
game for HUD. They don’t care the inexperienced agent, 5%
about what you offer; they look commission.
at what they net from the sale of
HUD foreclosure listings. You take $88,000, add $3,000
closing costs, and you get
If the HUD home foreclosure is $91,000. You still have to figure
new on the market, HUD will in your uncle’s, the
usually accept 85% to 88% of the inexperienced agent, 5%
list price net to HUD. commission. $91,000 is the figure
without the agent’s 5%
For example, the HUD house that commissions, or it is 95% of an
you want to make a bid is listed unknown amount. You divide
at $100,000. Your uncle, the $91,000 by .95 and you get
inexperienced agent, will be paid $95,790. That is the amount you
5% of the purchase price for can bid and HUD will net $88,000
commissions and you want HUD to with HUD paying $3,000 closing
pay $3,000 of your closing costs. costs and 5% Buyer’s agent
commissions.
What do you offer so that HUD
will net 88% of list price? You How did I determine HUD will
need to take what you know and accept 85% to 88% net of list
price? HUD publishes Bid Results numbers game to HUD and it is
and Bid Statistics on all of easy to figure the numbers that
their HUD foreclosure listings. HUD will accept for HUD
Bid Results are the accepted bids foreclosure listings.
and Bid Statistics are all bids
including the ones that weren’t accepted. I am a CPA so I enjoy type="text/javascript"> tion.com/pagead/show_ads.js">
About the Author:
Al Hardymon is an experienced real estate broker in buying and selling HUD homes for both his clients and himself. You can do a FREE SEARCH for HUD HOMES in your state at his website: http://www.the-hud-home-expert.com which is an informational center for buying and selling HUD HOMES for SALE.
