Buying a H.U.D. home - need advice.

So last night my wife and I saw a cute little house right where we want to live. It’s one of those HUD loans that went bad and as I understand things, the top bidder gets the house.

I wonder, is there some kind of algorythm or chart that they use? If the house is listing at $85,000 should I offer more or less? Can I re-bid? or do they stop taking bids at some point and just bang the gavel.

I want the house but if we offer the full price we’d have less money for all the repairs needed and for building a garage and paving the driveway and re-modeling the kitchen.

I’m grateful for any thoughts.

IANAR expert, but I bought a HUD home about 6 yrs ago. Basically you bid what you are qualified for. Our real estate agent recommended a mortgage company, we qualifed for X, then bid it as our max. The house was listed for about 6K more than we bid, but we won it anyway. The bid window is pretty narrow. I don’t know what factors are involved in their decision, but our agent told us that HUD received some protests after the bid window was closed and the award given. Hope this little tidbit helps.

Oh, forgot one other thing. Even though the house was listed at 6K over the note, our bid covered the note. I remember the real estate agent mentioning something about “as long as the bank gets their money back, they’re happy”.

You should ask HUD or the listing agent if you can rebid, when/if the cutoff, and if they will take an underbid etc.

Your last statement is consistent with my experience. If I spend more for one item, I generally have less for everything else.:smiley:

Here is a great site which details the process to Bid on a HUD home. It is quite thorough. I do not own a HUD home, but I helped build a few with Habitat for Humanity.

Thanks Helpful answers all. Thanks for the link, Phlosphr.