Relisted HUD home

[Steve E.]

Hello all,

I was watching this home in August during OO period since it was in my neighborhood and when I checked end of September, it was under contract. Hud initially had it listed for $255k and when it went under contract it was listed for $230k. From the bid results they have accepted $198K. The PCR stated $8500 worth of foundation repairs, $1600 worth of HVAC copper lines replacement due to vandalism, $3500 worth of replace damaged and missing electrical lines throughout, little roof work in the one hundreds, replace and repair $1000 worth of siding and replace and repair front and rear doors for $500.

This house has a pool and in the photos, it was covered and probably needs to be closed and I am guessing another $5000.

The house went under contract on September 22nd and on the door I found a note from the city saying the water has been turned on September 23rd. So probably they found other issues and it fell through. Also peeking through the windows, the hardwood floors were beat up and needs replacement.

I am interested in the property but would like to do my due diligence before I submit my offer. I will probably visit the property this afternoon. Any suggestions please?

Thanks

[Mike H.]

re: "I would talk to the powers that be and see if there are any current offers on the property. If you have a cash offer, a lower price may be of interest. "

Its a HUD house so there are no offers out there. Once that bid is put in, HUD would give the bidder an answer the next day if it meets their criteria. Also, HUD doesn't give you any additional discount if the offer is cash or finance. They have a set formula that they stick to and you either meet it or you don't.

re: 150k bid
As far as your bid though, I would definitely put that in. The house has been sitting since early July. You can get the actual system date from the appraisal date (July 2). Based on that, its been sitting about 4 months in the system. Its listed at 220k so I could definitely see them discounting it to 70% of list.

But thats to net so you'd be looking at 154k net. You need to add the realtor fees in there to see what your bottom line number would end up (160k or so, I believe).

But here's the other thing. You can still put in your offer of 150k total (i.e. not net to HUD) and see what they counter with. You never know. The fact that it has some significant repair issues and that its been sitting for 4 months (thats a long time for HUD), they might be willing to discount it a little more.

The only catch is that its still not listed as price reduced. Here in Illinois, you don't typically see the big discounts (60% of list) until its marked as price reduced.

But it doesn't cost you anything to put your bid in. If they don't take it, they should at least counter if you're within about 10 to 15k and then you'll know exactly what they want. From there, you can keep watching the house to see if the lower the list price any and/or mark it to price reduced.

The nice thing is its a HUD house. You don't have to fill anything out to put in a bid. Your realtor can put in a bid every single day for the next month if you want them to. I've had mine do it before until they dropped the price and I got the house - only because the house before I was putting it in every week and HUD dropped the price on it between bids and it ended up going for less than what I was offering every week.