HUD Counteroffer Received - First Timer

[Harry Metzinger]

Hi BP, newbie investor here...well, been actively looking since the beginning of 2016 but no contracts signed yet. After making more than a few offers on properties so far this year with no results yet, I decided to take the plunge into HUD Homestore and start making offers based on some great advice I read in other BP Forum topics.

Today I received a counteroffer to one of my bids, which is encouraging. HUD's counteroffer is above my maximum allowable offer. I'm encouraged though because we are not too far off. HUD says it has set the minimum acceptable net to HUD as x. If I counter at x minus $10,000, I know the answer will be no. My question is is it better to submit a counteroffer to show HUD that I am still interested in purchasing the property, just not at their price...or do they look at it unfavorably because I am submitting an offer that I know will be rejected?

For the record, I am inclined to submit a counteroffer, but curious to hear from those w/ firsthand experience bidding on HUD properties through HUD Homestore. Thanks.

[Greg H.]

@Harry Metzinger

The 'counter" you received is computer generated and is not really a counter but more of an opportunity to re bid at that price.  Keep in mind the following:

- Even if you now bid that number it would be opened tomorrow with all the other bids and if someone else bid $1 more their bid would be accepted

- The number that HUD gave you was the Net to HUD that would be acceptable not the sales price . So all commissions and any closing costs need to be added to that amount

- HUD does not negotiate in the traditional sense. The offer is either accepted or not. They will drop the price approx 10% after 30-60 days on the market (Seems to vary a bit by region and asset manager) . After +- 60 days or so, if activity is low, they may manually accept a lower number