All Forum Posts by: Gordon Vaughn

Hi Ashley. I would assume at this point that HUD has reduced the price 2X? If so I would have your agent submit an offer between 75%-80% of current list price, then check HUD's response the day after. If there are no other active bids on this home or if you're the highest bid on the table you could see an acceptance, or a counter offer at the very least.

I couldn't agree with you more Watson

Hey Tony. I appreciate your comments, I really do. This is what BP is for, to challenge information coming across this site and to ask the important questions as they relate. I don't claim to "always be right", and I certainly wouldn't blog or comment on areas I know nothing about. And to be perfectly honest, it's been a year since I've closed a HUD deal because the Georgia market is extremely scarce, and every time I place a bid for a client some knucklehead comes in $50K-$60K over list price to steal the deal from everyone. Most of my deals these days result from yellow lettering, inside tips on pre-market foreclosures that I can get an early jump on, or fellow agents that send me up n' coming listings that haven't hit the market yet. However, the info I provided in my original blog isn't anything that I discovered on my own. This info was given to me back in 2011, and I used this info which worked for me every time. I spoke to my friend at Pemco again a month ago. She said that there are very few variables that can play out which could prompt small adjustments to this rule, such as small adjustments to meet quarterly rollouts, but she said that this system is still very much at play and hasn't changed since she's been managing Pemco. So, even though I haven't done a HUD deal in a year, I am inclined to believe that what she says has and has always been true at least since 2011. And when you look at the price reductions you can see that the %'s to list price are accurate to the info I provided. Again, this is NOT my discovery. Everyone has their own way of crunching numbers, I get that. And we can nitpick 1%, 2%, & 3% based on our own methods of calculation and what we are individually seeing. But when someone immediately responds to something I've wrote, without questions or verifications, and simply says "you're wrong"; Yeah, that kinda pisses me off. I'm not going through Greg's blogs, or anybody else's blogs, with the purposeful intention of trying to prove people wrong. But I'm sure if I did, I probably could.

Duh! Never try to write or blog while your kids are screaming & running into walls behind you.

True, HUD stopped advertising the appraised value on their listings. I do believe though that when the appraised value was advertised, it was always consistent with the original listing price. Then once reductions were made you started seeing the price difference of the new reduced list price just above the appraised value price. Those were the days! Now it's just easier to track the homes of interest and write down any changes from the original listing. The lack of inventory has been the major factor in prices being driven up, both by sellers and by demand. However there seems to be too many people that have jumped on the HUD bandwagon because of how easy it is to submit offers and track progress without the help of a real estate agent, and because they hear that HUD homes are the best deals around. Many of these unrepresented investors are submitting multiple offers on many homes at once due to low inventory and heavy competition, without performing proper due diligence and carefully analyzing values. This usually results in ridiculously high bids that make it almost impossible to land a good deal through HUD. In turn the winning bidders are buying career ending deals they wished they never purchased. Don't get sucked into that vortex! You could easily find yourself in the same regrettable position! Also, be patient and try to utilize other paths to finding great deals.

Thanks for your post Chris. HUD tries to take into account the home's condition and work needed to be performed, but like most home sellers they think their house is worth more than it's actually worth. Revisit the deal like you said, and keep plugging away with the others. If you find several great deals at once, increase your odds of landing one by submitting offers on all of them. Once you've got one you can always pull out of the rest.

Chris - very clever interpretation "reverse engineer the algorithm". I never thought about it like that before, but very true and a crazy smart way to look at it! I agree with everything you said.

Eric- I don't know of any way to get around the owner occ period if you're buying as an investment. If you take a chance, sign the OO certificate and it's found out that you fraudulently acknowledged you're an OO, I think the fine is up to $100,000 and 1 year in prison(??). There are certain circumstances whereby you'd be allowed to sell within the period, (ie: Your company relocates you ). Do your research on the rules governing this policy.

Oh, and for the record Greg, there are only 2 MLS systems that matter in Georgia - Gamls and Fmls. Atlanta is the only major city in Georgia, Macon uses Gamls almost exclusively and is not considered a major city. Also, my tracking information is based only on properties that were listed with Southern REO, which was HUD's preferred regional listing agency to which I worked as sales agent & sales manager for nearly 3 years.

Hello Lee. Unfortunately most Realtors don't have a broad knowledge of bidding on REO's, HUD's or distressed property. Your best option is to find a strong local agent or Realtor right here on Bigger Pockets to help you submit your bids.

Yes, %'s based on offer price to sales price & NOT net to HUD. And yes I agree with you in that the net to HUD is the focal point on just about every page of every offer, counter, rejection, and acknowledgment through their systems. However public knowledge of this acceptance template was never HUD's intention, as this would be a strategic faux pas by all accounts. It's meant to be a guideline for asset managers only. There are a lot of things we learn in this business as we go, and there are also a lot of trade secrets we learn from insiders that we meet and do business with along the way. I'm sure you've learned many things along the way that I don't know about, and would not presume to know about. This template is "inside intel" that has been shared with me by a very reliable inside source, confirmed by other inside sources, which I have put through the test time and time again. I've got too much experience and knowledge of this business to throw around arbitrary posts on topics I know nothing about, and I don't make up BS just to read my own topics with a self-indulgent and narcissistic gloat. Quite honestly I'm having trouble understanding your desire to battle and disprove this simply because...why? Just because you have never heard of this doesn't disprove it's validity. I hardly rely on HUD properties to make a living as HUD opportunities in Metro Atlanta are extremely scarce, and I'm not trying to be BP's "King of HUD". You can gladly have that title. And really, a step further, I could care less whether people believe it or not! People will, or they wont. I'm just trying to give some advice to the good people here in the BP community, that may give them some bidding leverage and save them a little time and money. This isn't a competition for me.

BTW - I'm curious about your last name H. Obviously your last name begins with H, but what is your full last name?