A complete step-by step guide for purchasing HUD Homes in Georgia. Part Four of Seven: How to bid on a HUD home?

By
Real Estate Agent with Better Homes and Gardens Real Estate Metro Brokers

Bidding on HUD HomesIn Part 3 of this series How do you find a HUD home in your area that is for sale? we discovered that the best way to find a suitable HUD homes is to engage a real estate buyer's agent that is proficient in the HUD buying process.

Once you have found a HUD home that is suitable for your needs, it's time to consider making an offer. In the state of Georgia, HUD uses a blind bidding process that allows each potential buyer to enter a bid prior to a clearly defined bid deadline.

Before having your buyer's agent enter your bid, you need to do several things. First and foremost, you need to read and understand the property inspection report prepared by the HUD inspector. The inspector evaluates the condition of the property in order to establish an appraised value.

Finally, before you decide on a final bid price to offer, it is imperative that you ask yourself this question:

Is it more important to you to get the house or to get a good deal?

That's a fair question, and it is an important one. Some buyers fall in love with a house, and want to ensure a good chance of entering a successful bid. Other buyers are more intent on getting a deal on a house, and that overrides their desire for any particular property.

As long as a buyer is willing to lose the house, a low bid can be proffered. But if a buyer really wants the property, one must seriously consider the HUD appraisal price as at or near the market value.

In Georgia, a licensed real estate agent must be used to enter a bid for an owner-occupant HUD property. And remember that experience is counts.

The most valuable asset that a HUD buyer can have in the bidding process is the assistance of an experienced real estate professional that has successfully entered winning bids on behalf of their clients!

Next: Part 5, What happens after your HUD bid is accepted? Previous: How do you find a HUD home in your area that is for sale?

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  1. Pam Simpson 09/23/2009 01:15 PM
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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

There are a dearth of HUD owned homes offered for sale in our area.  They're not very good buys because they've often been stripped, but I know they are good homes in some areas. 

Aug 20, 2009 04:39 PM #1
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Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

Richard, this post really interested me. I started my real estate career selling HUD's in Oklahoma. I rmember hearing people tell me, the other Realtor said that if i didn't go $20,000 over i wouldn't get it. I told them that if they did that they surely would get it and I hoped they planned to stay in it a long time. HUD has made changes in the bid process, especially on FHA loan biiders that keep this under control. I still have people who bought HUDs in thei early 90's still in them. It was not becasue they overbid either. I really warned people about not getting into the auction hysteria, and the object was not "winning" the house.

Aug 20, 2009 05:03 PM #2
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Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Great discussion Richard of the process on bidding on one of your HUD homes.

Aug 20, 2009 05:05 PM #3
Rainmaker
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JL Boney, III
Russell and Jeffcoat - Columbia, SC
Columbia, SC Real Estate

I see we are getting down to the heart of the matter with this series. Congrats on the feature my friend.

Aug 20, 2009 09:16 PM #4
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Chris Olsen
Olsen Ziegler Realty - Cleveland, OH
Broker Owner Cleveland Ohio Real Estate

Hi Richard -- Buying a HUD home is not for the faint of heart and I hope buyers heed your good advice and partner with an experienced buyer's agent like you who has the knowledge and competencies to ensure they are well represented and served.

Aug 20, 2009 09:39 PM #5
Rainmaker
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Terry & Bonnie Westbrook
Westbrook Realty Broker-Owner - Grand Rapids, MI
Westbrook Realty - Grand Rapids Forest Hills MI Re

My first experience with a HUD home sale was successful but stressful after completing a few it can be a great experience and usually a good value.

Aug 20, 2009 09:59 PM #6
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William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

Richard...you have made a very good outline for which to follow.  this is not an easy  process all the time!

Aug 21, 2009 02:55 AM #7
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Michael Thornton
Complete Home Inspections, Inc. - Brentwood, TN
Home Inspector - Nashville, TN area - 615.661.0297

Richard, Very helpful information. Congratulations on the feature...

Helping you live your American dream...

Aug 21, 2009 04:41 AM #8
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Richard Weisser
Better Homes and Gardens Real Estate Metro Brokers - Newnan, GA
Richard Weisser Coweta Newnan Homes for Sale

To all...

HUD homes are very popular in my area, not so much in other areas of the country because an FHA loan would have been in place. FHA loans have upper limits so the more expensive regions would have had more conventional loans!

Aug 21, 2009 06:10 AM #9
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Claude Cross
Claude Cross-Charlotte NC Real Estate(Homes By Cross, Inc.) - Charlotte, NC
Charlotte NC Homes For Sale

Richard - We have quite a few HUD homes for sale here. This series is excellent

Aug 21, 2009 12:14 PM #10
Rainer
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Don Sieb
HomeSeeker Center - Everett, WA

I enjoyed the series on HUD properties...keep them comming.

Aug 21, 2009 12:48 PM #12
Rainmaker
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Patricia Aulson
BERKSHIRE HATHAWAY HOME SERVICES Verani Realty NH Real Estate - Exeter, NH
Realtor - Portsmouth NH Homes-Hampton NH Homes

Yes I too enjoyed the information you have provided on this subject.

Thanks for sharing with us. 

Patricia Aulson/portsmouth nh

Aug 21, 2009 09:08 PM #13
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Adan Aguillon
Clark Realty & Associates LLC - San Antonio, TX

Richard,

    I am the HUD expert in San Antonio.  Just kidding I am a fairly new agent here in town, but so far I have sold 10 HUD homes since last Apr.  Luckily in San Antonio and surrounding counties there is a plethera of very nice homes available.  I purchased and currently lived in one that is only two years old and all the maintenance we had to do before moving in was steam clean the carpets. 

    Just like I know you are aware It is a silent auction to bid on these houses and here in Texas its usually 10% below that you  can bid for the first month.  After the first month HUD reduces the price 10% and you can bid 10-15% below the new listed price.  I was lucky enough to pick up my town house that was listed for 150K for 114K using this pattern of bidding.  Luckily like you mentioned I wasnt attatched emotionally to the house so I was able to bid a very low amount and luckily I won :)

 

 

Aug 22, 2009 01:28 PM #14
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Sheila Moran
RE/MAX Access (Garden Ridge, San Antonio, New Braunfels) - New Braunfels, TX
SanAntonioSheila.com, RE/MAX Access, 210-32

Richard,

This is such a smart sentence:

Is it more important to you to get the house or to get a good deal?

I ask my clients the very same question regardless of who the entity is that is selling.  Are they willing to loose something by not going in with their best offer first?  The answer is sometimes very interesting as well.

Thanks!

 

Aug 22, 2009 04:38 PM #15
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