Bidding Procedures
Placing a Bid :
HUD Homestore Bid Submission (click on link)
Modifying a Bid :
Modifying and Withdrawing Bids (click on link)
Strategy
· The Asset Manager accepts the highest NET BID. The price that nets HUD the most money. Price less commission and closing help.
The Bid
· Line 3 Enter the gross purchase price. It has very little bearing on getting the property.
· Line 4 Enter financing info: FHA or conventional / cash.
· Line 5 Enter the amount of closing costs you would like HUD to Pay. This is subject to many restrictions and may go unused! Max of 3%
· Line 6 Enter the amount of the commission to be paid by HUD to the Registered Agent....MAX of 3% and a Minimum of $1,250
· Line 7 Enter the net due HUD (Line 3 less lines 5 and 6). This is the amount that HUD used to accept the highest winning bid that exceeds their minimum price.
Bid Results
· Bid results are posted daily at approximately 1 PM by the Asset Manager. Wait until after the posting deadline to place bids for your client.
· If your bidder is not going to occupy the property, the bid cannot be submitted until the 31st day from the initial listing date. Owner occupants receive priority during the first 30 days (Exclusive Period).
· If the listing has a deadline posted as daily, this means that all bids are reviewed daily. Submit bids by 11:59 p.m. CST to be considered for that day. If a winner is selected from the bids received during that day, the results will be posted by 1:00 p.m. EST the following day.
· If the listing has a deadline posted as “daily” and bids are submitted on a Friday, Saturday, or Sunday, all those bids will be evaluated on the following business day.
Multiple Bids
· If you are a Selling Broker, you can represent different buyers submitting bids on the same property. There is no limit.
· If a purchaser submits multiple bids on the same property, only the bid producing the highest net return to HUD will be considered. If a prospective owner-occupant purchaser submits a bid on more than one property, the bid that produces the greatest net return to HUD will be accepted and all other bids from that purchaser will be eliminated from consideration. However, if the prospective owner-occupant purchaser has submitted the only acceptable bid on another property, then that bid must be accepted and all other bids from that purchaser on any other properties will be eliminated from consideration.
· For non-owner occupied investors, there are no restrictions to the number of bids marked or the number of properties purchased.
Backup Offers
· In any given bidding period, more than one offer is often received. These offers will be ranked, with the highest acceptable net offer first. The first bid will be extended the offer to purchase, then the second (third, fourth, etc.) bid will be indicated as a backup offer with email from the AM that they are in a backup position and if the primary bid cancels, they will be given an offer to purchase. Do not to send the Sales Contract Package to the AM until notified their bid has been accepted.
· If a backup bid is accepted, the Selling Broker must send the Sales Contract Package to the Asset Manager (AM) within two business days (48 Hrs).
Counter Offers
· Asset Managers (AMs) evaluate all bids received. If no bid is deemed acceptable, but several bids are within a given range; the AM may send emails to the bidders that they are within the range and they request submitting a subsequent bid.
· The property status will be changed to “accepting counter offers”.
· If a counter offer is made, HUD requires that the counter offer be given to all bidders. From the counter offers, the highest bids may then be accepted.
· (Example of a Counter Offer, click here)
Bid Cancellations
· A buyer may cancel a bid at any point online until the bid has been accepted and the contract has been accepted by the AM. After that point, if the buyer is not going to close on the sale, the Selling Broker would be required to contact the AM and the Closing Agent as soon as possible. Requests for the return of earnest money would need to be provided in writing and accompanied by any documentation supporting the reason for the cancellation.
Contract Release & Earnest Money Disposition Request Form.