HUD countered, should I be excited?? What do I do now?

Question

I found a SFH property in a county in MD where conservatively the ARV is $165K.   I submitted a net-to-hud bid of $70K. Their list was $125k.  They are countering at $110.  It was listed on the 10th of the month.

I'm not going up that high.  I'm just wondering if I'm somewhere on the radar - in other words, if my 70K net bid was so outrageous it wouldn't even get a counter mention.  So should I just keep rebidding?

Another question is, has anyone ever re-bid LESS that the original when presented with the opportunity to counter?

This is my first HUD experience.   I'm excited because I expected a complete rejection from the outset (though I know the chance of this actually become a deal is probably slim to none, lots of competition around here).   I've read tons of posts here and lots by @Mark Ferguson.  I've seen a back-and-forth about ticking off asset managers.  I certainly don't want to do that.  But others say it's all automated and that's the beauty of it.

All the BP posts on HUD have been very helpful.

Greg H. · Answer

In 20 years and a couple of hundred HUD transactions, the only time I have received my EM back is when there was damage to the property after my contract was accepted by HUD.  This has happened maybe a half dozen times and usually I have been offered a fraction of the cost of the damage.  The lasted was a few months ago, I had a property under contract in West Texas and a storm made the vinyl siding look like swiss cheese and totaled the roof.  HUD offered me $1000 and when I declined I did receive my EM back

@Christina R.

It looks like you received a generic counter at 88% of list price.  It is not really a counter per se but more of "this number would be acceptable to HUD" because even if you agree to the number it would not be reviewed until the next day and you could still by out bid.  My suggestion is you go with your best number and check the box "may be considered as back up" and wait.  If there is little or no activity,  your offer may be accepted at some point.  All the different Asset Management companies work differently so this may or may not be the process in your area

Mark Ferguson · Answer

This is right on, but they may go lower after 60 days in my experience. Also, the only time I heard an asset manager getting am is when someone submitted the same bid every day for weeks.

J Scott · Answer

Generally, a HUD counter will be about 15% less than the listed price, and is typically the lowest they will go unless/until one of the following happens:

-  They drop the price;

-  The property has been listed for at least 90 days.

You can't counter a HUD counter, but you can submit a new offer (for example, somewhere between $70-110K), and see what happens.  Most likely, you'll get another counter at $110K, but who knows, maybe you'll be pleasantly suprised!

Christina R. · Answer

This was a no go - someone else got it.  I have not followed HUDS since because I had other things on my real estate plate.  A goal of mine for the summer is to get up to speed on HUD bidding (I have the summers "off" as a teacher).

Christian Bors · Answer

@Christina R. how did this turn out?  Have you had other experience with hud since this post?

Sherri Clay · Answer

We are going through a similar situation with HUD. Listed $214k. We won a bid of $210k as OO. We turned on the utilities and the home inspection revealed about $20k is repairs. We were able to get our EMD back. We submitted a new bid at 74% net to HUD. HUD countered at 88%. We countered today at 82%. And now we wait ....

Christina R. · Answer

@Mark  Ferguson

Mark - you are the HUD guru here, lol, so please advise.  This property has fallen under contract and out of contract twice. At least I'm assuming that because it's been on the HUD homestore and off of it at least twice.   I received the automated notice that it was going to be relisted,   So I go looking for it under investor,  can't find it then  figure it out- it's on the OO/govt/nonprofit side again.  It was put up on October 10th originally.  It will reopen for investors at midnight tonight.   I've bid on this 3 different times.  Each time I was significantly less than list because the property needs a minimum of 50K in work.

My question is - why would I get an automated notice to rebid - this time it wasn't even a counter - it was just the basic  if-your-client-wants-to-rebid business go to (this link), yada yada - if I'm an investor and it seems to automatically go back into the OO/govt/np side first?  A counter notice to make a counter went out yesterday.

I've always marked my bids as backups too.

Just curious.   Still trying to figure out HUD, lol!

Thnx for any advice!

Christina R. · Answer

OK, so now the property has been moved over to the OO, govt, nonprofit side.  Investors cannot bid on it anymore  (and I checked my original bid submission and it is INV for investor - when I went to put in a new bid from the link of this morning's email and was reviewing info it had me marked an an OO for this next round of bidding ).   Is this typical of HUD to do - switch it between categories?

J Scott · Answer

85% is the percentage I usually assume with HUD listings, so I would assume that they'd accept 85% of the new list price at this point.  Doesn't matter what time of day you put in the bid, as long as it's before midnight.  All bids are reviewed at the same time the next morning.

Christina R. · Answer

I decided yesterday to rebid but figured I'd rebid today.  I woke up and had an automated message from HUD that they dropped the price.   Now it's about 89% of the original list.  One thing from all the reading I've done here through searches RE: HUD is the percentage they drop off list, the original list, the new list, etc after so many days, etc is a little difficult for me to keep straight being new to this.      Does this mean that in theory they would accept 80% of the new price?  The counter was at 88% of the original, the new price is 89% of the original.   I'm still set on my original price, maybe even more so now because I'm thinking if it were worth more it would have been snatched up.

Does it make any difference what time of day you put the bid in?

HUD countered, should I be excited?? What do I do now?

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