How to Submit a Winning Bid for HUD-Owned Properties

Learn the HUD-buying process.

Investors and home buyers who submit bids on HUD-owned properties are able to obtain some of the best deals that exist in today's real estate market. However, all interested parties must perform a certain amount of due diligence prior to their actual purchase in order to make a wise buying decision.

Instructions

1. Know the process of bidding on HUD properties like the back of your hand. If you have never bought a HUD-owned property, you must be prepared to submit your highest offer at the time of bidding. You will not know how much money others are bidding, so the amount of money you are willing to spend needs to be decided upon in advance.

2. Understand your buying strategy. If you are going to be residing in the home, you are considered an owner-occupant. If your plan is to sell the property quickly for a profit, you would be considered an investor. Planning to stay in the property for at least two years would allow you to bid first on the property. Otherwise you must wait for all of the owner-occupants to place their bids.

3. Factor repair costs into the bidding process. Take the time to see the inside and the outside of the home before you place your bid. If you are not very knowledgeable regarding home renovation, bring someone with you who knows how to estimate repair costs.

4. Keep your eye on the HUD property market. If you see a property that catches your eye, put it on your watch list. You may not get a chance to bid on it that day, but you can always submit a bid later if it has not sold.

Tips & Warnings

• Build a relationship with a real estate agent from your state who has a proven track record. Find out how long that real estate agent has been in business, the number of deals they have closed, and make sure that they are pleasant and prompt.

• Fill out your HUD paperwork in advance. Check with your local real estate agent to find out exactly what needs to be filled out so that you can be ready to bid in a rapid fashion. Deposit your earnest money payment in a neutral account.

• Don't let your excitement control you. It is easy to become emotionally attached to a certain house because of its physical characteristics. However, be careful to only bid on properties that are in your price range.

References

• HUD: Buying a HUD Home
• HUD: Homes State-by-State