Understanding HUD Extended Listing Period

[Jeff S.]

I've never purchased a HUD owned home before but there is one I may be interested -- not anywhere near the current list price though. It's a UI property in the Extended listing period. The price at which it would be attractive to me would be about 60% of the current list price or about 50% of what is listed for the "as-is" price.

If nobody submits a successful bid, is the property likely to be re-listed at a lower price?

Also, I noticed the time between the "List Date" and the "Period Deadline" is 116 days. Isn't the Extended listing period supposed to be 180 days? Any thoughts as to why the discrepancy?

Thanks in advance!

[J Scott]

In my experience, list prices will be dropped every couple weeks until the property is sold -- the longer the property is listed, the shorter the period between price drops.

In general, I've never seen HUD accept a price less than 20% below list, and that 20% below is the net amount to HUD, not the gross amount. As an example, if the list price is $100K, generally after a few weeks of not selling, HUD will be willing to accept 80%, or $80,000 as their net proceeds. With 6% paid in commissions, that means HUD won't accept anything lower than $85,106 (which would result in $80,000 to HUD after commissions). If you're asking for closing costs, add that to the equation as well.

For newly listed properties, HUD generally won't accept less than 10% or 15% below list, again net to HUD.