How Much Should you Bid? |
· DETERMINE THE MINIMUM AMOUNT WHICH HUD WILL ACCEPT FOR THIS PROPERTY:
a. This is perhaps the most important item in determining how much you should bid.
b. WE PROVIDE THIS INFORMATION TO OUR CLIENTS
HUD has formulas which they use for determining what they will accept for their properties. There are many variables in making this determination but they are very consistent.
c. The amount which is acceptable to HUD varies.
d. This information is not public information!
e. Our research teams use information from numerous sources to determine the percentage of the current list price which HUD will probably accept for a given property.
f. Based upon our research, We provide our clients with an actual dollar amount of what HUD has recently accepted for properties in the same market stages as the property you are interested in.
·
Come up with a rough estimate of the current fair market
value.
a. The current appraised value is available, the appraised value is referred to as the as-is value of the property by HUD. Our property researchers can provide this to you.
b. We provide our clients with the current assessed value of the property or our property researchers can provide this to you. If you are looking for a broker we can provide you with brokers who understand the HUD process.
c. We provide our clients with the amount which was owed on the property when it was foreclosed on.
d. We provide our clients with the amount which the property previously sold for and when it last sold.
e. We provide our clients with properties which have sold which are similar to those you are interested in. If you do not have a broker we can provide you with brokers who understand the HUD process.
· Examine your reason for purchasing this property.
a. If it is your dream home you may want to bid more than if it is not.
b. If you going to use the property as a long term rental you may be willing to pay more than if you are purchasing to resell the property.
·
Other bidding considerations
a. Determine what the average percentage of list price properties in your area are selling for. Our property researchers can provide this to you.
b. If the property is in the owner occupant priority period, the blind bidding can be very competitive if the property is priced right.
c. If you are an investor you make your money when you buy properties not when you sell, if a property is not clearly a great buy wait it out!
d. If you pay more than the as-Is appraised value and wish to obtain FHA financing, the difference between the appraised as-is value and the purchase price must be paid in cash.
·
Weigh the above information against your needs, goals and
objectives to determine a number of how much you might be willing to pay for
this property.
·
REMEMBER THAT THE HIGHEST NET TO HUD WINS THE BID
(Line 7 form 9548)!
a. Ask yourself; If I bid this amount and get outbid would I say “I should have bid more” and ask yourself;
b. If I bid this amount and get out bid would it say “It wasn’t worth that to me”.