How To Bid - BuyHUDVA.com

HOW TO BID

HUD/FHA Insured and Insured with Escrow Properties

Bidding is restricted to Owner Occupants ONLY for the initial 30 days that the property is listed. On the 11th day of being listed asset managers will open all bids received Days 1–10 as though they were received simultaneously and if there is a bid that meets HUD thresholds, it will be accepted. If no bid meets HUD’s thresholds, the property will remain on the market and bids will be opened everyday at the end of the day thereafter until an acceptable bid is received. 203k loans may be available for these properties.

HUD/FHA Uninsured Properties

Bidding is restricted to Owner Occupants for the initial 5 days that the property is listed. On the 6th day asset managers will open all bids received Days 1–5 as though they were received simultaneously and if there is a bid that meets HUD’s thresholds, it will be accepted. If no bid meets HUD’s thresholds, bids will be opened everyday thereafter until an acceptable bid is received. 203k loans may be available for these properties.

Proof of Funds

A copy or fax of a pre-approval letter is now required for the amount of the offer from your lender on their letter head and signed by a loan officer before we can show a property and make an offer. If paying cash, a copy of a statement of funds is required. In any case, the amount stated or shown needs to be at least the amount of the offer.

Earnest Money

For HUD properties, a one percent earnest money deposit with a maximum of $2000 for properties listed at $50,000 or more or a $500 deposit for properties less than $50,000 is required by one HUD-contracted asset manager. The others require $500 for properties under $50k and $1000 earnest money deposit for all others. It must be a cashier's check or money order. HUD deposits must be made out to "HUD". For Bank and other properties, an earnest money deposit is normally one percent of the offer and will be made out to the title company where it is held until closing. The amount of the deposit may vary and is usually set by the owner. Sellers normally require that the earnest money be in hand prior to presenting an offer. HUD requires the earnest money deposit to be included with the offer package when it is submitted.

Your earnest money deposit will be applied to your closing costs -- which for buyers who finance typically includes establishing an escrow account for prepaid items such as property taxes and homeowners insurance; costs involving the purchase of your loan such as a loan origination fee; and other processing, document preparation or attorney fees, appraisal if needed, survey if needed. Closing costs may run between 4 and 5% of the offer amount unless paying cash which in that case could be as little as 0 to 1 percent because escrow accounts and lender fees are not required.

Seller Concessions

When you make an offer, you may ask any seller to pay for some of your closing costs. But remember that sellers compare offers according to the net proceeds after all concessions, including any items or closing costs you ask them to pay for. The seller also normally pays all sales commissions,including the buyer's agent's commission, so their net procedes are reduced by that amount also. If a seller will not pay the buyer's side commission, you will normally sign an agreement with your agent or Realtor to pay it yourself. This is sometimes the case on a "For Sale By Owner" property and always the case for a HUD Good Neighbor Next Door (GNND) property. However, for other HUD properties, HUD normally pays all commissions.

Please NOTE: If you fail to close, you may lose all, a portion, or none of your earnest money deposit. It will depend on the seller and the circumstances. Normally, if a loan is denied, you obtain your earnest money deposit. We will give you more details prior to submitting your offer. If your offer is not accepted, your earnest money deposit is returned and all paperwork is cancelled.