Under HUD contract; can I revise bid/offer based on inspection?

Question

Greetings;

So . . my offer on a HUD house was accepted; used the 89% rule - Thanks.  But just read the "successful HUD bidding strategies" and there's sooo much I didn't know.  Using a 'not-so-HUD-experienced" broker (but she is Awesome in so many other ways!).  Bid as Owner Occupant.  So: I don't know if the house was "insured" or not.  I DO know that the previous offer fell through due to financing.  So I probably could have bid a bit (a lot?) less.  anyway . . .

If the house was in the condition the HUD site 'suggested' - with plumbing issues and some bad outdoor steps, I would have been very pleased with my bid.  BUT . . just had my house inspection: house will need new roof, new furnace, and the sill plate on the garage 'fixed' somehow as it's rotting fast!  That's just the big stuff.  My contract states (suggests) that I can only cancel if an inspection reveals problems that were not addressed in the property disclosure.  OK - but I don't want to cancel.  I want to revise my offer based on the work needed as identified in the inspection.  Like I could with any "regular/typical" offer and seller.

Will HUD "negotiate" based on my inspection??  Or will I have to cancel and hope I'm the best bidder again?  My agent is not clear on this and looking into it.

Thanks

Kelly

Leigh C · Answer

Just got one with a bunch of open permits that they (hud/AM and listing agent) knew about but didn't feel like disclosing.    100 dollar a day fines on some of the permits which has climbed into the 10s of thousands total.   Buying from hud is a full contact sport.    Wear a helmet.     Your agent sounds like a great friend but a bad expert in one of the most important financial decisions of your life.

Greg H. · Answer

Your only options are to buy the property as-is or terminate.

Mark Gallagher · Answer

@Greg H.

When it is UI you can't submit an FHA offer to the best of my knowledge. Which means it could get a little hairy if buyer tries to cancel the contract. I'd have to verify this 100%, perhaps you know.

Shannon K. · Answer

I just went through a similar situation. HUD will not budge. In my experience, they are very strict on most things and I also had to cancel the bid I won and resubmit.

My house bid was put in the wrong person's name and HUD wouldn't change it or accommodate me in any manner. Made me cancel the whole sha-bang and start over the next week it was relisted.

Thank heavens it worked for me and I got the house $3K cheaper the 2nd time. (I won the bid by 9am. By 10am several other offers higher than mine poured in!) I lucked out big time. You may risk losing this house to the waiting competition...

Greg H. · Answer

Hud properties are online bidding only so there is no opportunity to submit any documentation.  At this point assuming very few days on market , the bidder is not going to get a discount

Seth Nadreau · Answer

If it were me, I'd terminate. Wait 1 day. Put a new offer on the house (much lower to account for needed repairs) and submit a copy of the inspection report with the offer.Cross fingers. Hope for the best. Be prepared to start over.Good luck!

Dante Pirouz · Answer

I bought a HUD duplex for what I thought was a good price and found out that all the plumbing had been ripped out...you just have to eat it and shift it into your contingency budget (you have one right?). It is just a part of the pluses and minuses of buying HUD...

Greg K. · Answer

@Payton Law I've found multi-family HUD homes just by eyeballing the bed/bath ratio.  I've never seen them listed as multi-family though.  The first picture can usually give you a sense if its a multi-family and the property condition report may reference Unit #1 or Unit #2.  Zillow and MLS are a good way to verify.  For example, here is a 6/4 which is case #251-370198.  Clearly a side-by-side two-family but listed on HUD Home Store as a single family home.

Kelly G. · Answer

Thanks Account Closed    I didn't think it would be possible but hope always springs eternal!

I get the whole 'as-is' thing;  but how do you approach a 'fair' price when 89% of listing price doesn't account for the $12k+ in repairs that were not included in the property disclosure?  the 89% level covered the costs for repairing the stated problems (plumbing and steps).

. . .  and how do you 'know' about other needed repairs until you bid and do your inspection??

How long might it take for HUD to put it back on the market so I can bid lower?

Appreciate your comments.

Kelly

Greg H. · Answer

You are correct. I wasn't in a hurry and worded it backwards. Just because it is insured does mean it will be insured as it is "subject to appraisal ".  This is a procedure to turn it from Uninsured to insured but it was a pain in the **ss and I would never spend the time to do it again especially now with Sage

Additionally, if the property is uninsured , the system will now allow insured bids to be made

Under HUD contract; can I revise bid/offer based on inspection?

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