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Dionnes86, Home Buyer in Greer, SC

How does the HUD bidding process work? We are currently working with an agent. Will there be any benefit for her?

Asked by Dionnes86, Greer, SC Tue May 1, 2012

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Kawain Payne’s answer
Hello Dionne,

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".
0 votes Thank Flag Link Thu Jun 7, 2012
HUD is very good at paying out selling agent/buying agent commissions. The first 10 days a home is on the market it is usually offered only to first time buyers and then after that to investors. A HUD can be a good investment depending on the condition. Many times there is special financing for repairs or even a repair escrow. I like your questions, it is not often clients are concerned about their agent getting compensated. Your agent is lucky to have you as a client. Good luck to you.
0 votes Thank Flag Link Sun May 6, 2012
Dear Dionnes86,

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.

Regards,

Maureen
Maureen Cody
Broker/Owner
The Keys To Charleston LLC
http://www.thekeystocharleston.com
0 votes Thank Flag Link Tue May 1, 2012
You have to submit a bid online and your agent needs to be a registed HUD agent. The agent will receive a commission, but that figure needs to be factored into your bid. HUD is looking for the best "NET" to them. They don't care if it's a cash offer, conventional, or FHA. It's an automated process and the system just picks the best net to HUD.

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.

http://sallygrenier.com/2011/06/01/short-sales-foreclosures-…
0 votes Thank Flag Link Tue May 1, 2012
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