Getting It

Working with HUD is interesting, to say the least. The entire process was rather frustrating, but we made it through. The bidding process works like this: During the first 10 days a HUD house is listed, bidding is open only to owner-occupants. All bids placed within that time period are considered simultaneous. If HUD receives no acceptable offers during this time, bidding opens to everyone. Bids are taken each day and results are posted online by 1:00 the following day. HUD will either accept a bid or reject it, no counter-offers (well, sort of). I don't know if it always works like this, but the pattern I observed for this house was that after 30 days if HUD has no acceptable bids, the price drops and the first 10 day period begins again. After a couple of drops in list price, I was ready for my first bid. The question - what to bid?

HUD must have some secret formula for determining an "acceptable" bid. You won't find it anywhere, but HUD does post bid reports, showing rejected and accepted bids on properties for the past few months. So I created a few spreadsheets and analyzed the numbers to try determine how low I could go. Although it did not reveal an exact % to list price, it was helpful.

We submitted four bids. The first two were rejected. They actually counter offered on the third one - really just saying we were close to their acceptable minimum and telling us what it was. So the fourth bid was the amount they countered. Bingo - accepted!