Bidding on HUD property after 1st price reduction

[Jacob Essenov]

Hello all,

I'm not an investor, looking at a particular HUD property as an owner-occupant. I'm using a real estate agent, who is registered with HUD and can make bids on my behalf.

House recently went from exclusive bidding period to extended, and I'm quite positive it will sit there untouched, until at least one price reduction (and probably past that). The list price is just way too high, especially for investors, so the only real competition is OO bidders like myself.

After reading valuable info in this forum, and cross-referencing reduced property prices on HUD Homestore against Zillow, I know that 10% for the first reduction is an accurate figure for the area I'm looking in. Where it gets fuzzy is - how much does HUD (their software, to be exact) expects to get, for the bid to be accepted?

While 88-89% Net to HUD seems to be the rule of thumb for newly listed properties, it's much less clear for those that have been reduced. Different posts here mention the following, quite different, tactics:

- bid 85% of reduced price (which means Net to HUD will be under 80%)

- bid so that Net to HUD is 80%

- 88% Net to HUD rule still applies after 1st reduction

Could anyone share actual experience with successful bidding after 1st reduction?

Many thanks,

Jacob.