Your agent will recieve a commission from HUD if your bid is successful.
HUD bidding in a nut shell is like an auction. Bidders will submitt their best a highest offer through a real estat sales person via electronic submission. HUD will decide on and select the winning bid.
HUD homes are reserved for onwer occupants and non profits for the first two weeks (approx 10 days) after that period if no bid is selected then HUD will open bidding to investors.
Your agent must be registered with HUD to bid on HUD proerties, so make sure you are working with a registred HUD agent.
Best Of Luck to You!
Kawain Payne, Realtor
Keep in mind the homes could be sold "as is".
Sally offered good information in her response and I second her point that HUD homes can include alot of unknown factors.
Click the link below to get further HUD information.
The Keys To Charleston LLC
So let's say you're offering $100K, and the agent is asking for a 5% commission of $5K and you need $5K in closing costs. The "NET" to HUD is really $90K. BUT....Let's say there's an investor who's also offering $100K, they are also an agent, and aren't paying anyone a commission. They are paying cash and don't need closing costs. The net will be $100K and will win the bid. So...in essence you'll want to pad your offer to include agent's commission, and any other things you're asking for -- such as closing costs.
Are you willing to pay above the list price in order to get the house? Also, many HUD homes have issues and require money to be put in escrow up front to pay for repairs.
Think buying a HUD home is a great deal? Think again.