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Updated about 10 years ago on . Most recent reply
are HUD counter offers meaningless?
I missed out on my first rehab project. It was a 3/2 with vinyl siding near my home - the perfect amoutn of rehab for me to start with. My realtor and I agreed the list price of $157,500 was accurate for ARV since it was in the 25% with no garage in the area (Roanoke, VA). So basically HUD offered at ARV. I figured if I could get it at $115,000 I could repair front stoop, paint, carpet, repair small drywall holes, replace a few fixtures and pay realtor fees to sell and still make enough to satisfy me for my efforts.
I made an offer of $101,000 with $500 deposit to HUD.
HUD countered stating "minimum acceptable net to HUD offer amount for this property as $133,875".
That was too much to make any profits so I sulked and waited a few days since that was over Thanksgiving.
A few days later the HUD website shows HUD accepted an offer at $112,800.
So my question is -- are the HUD counter offers meaningless? I lost this one because I assumed there would not be any need for HUD to be so deceitful. I don't understand why they countered with a specfic number that is not anywhere close to what they accepted.
Thanks in advance to anyone willing to advise.
Brent
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@Account Closed HUD's counters are not counters as we know them, they are just the minimum offer that HUD will take at that time. If you rebid at their counter and a higher bid comes in, the higher bid will win. HUD's earnest money requirement is $500 for offers less than $50K and $1000 for offers greater than $50K. HUD will reduce the price after a certain amount of time, so you have to monitor on a regular basis. The scenario you wrote about happens frequently with HUD, it is just a function of how their asset managers work. Their are a lot of posts regarding the HUD bidding process on BP.