UPDATE: This process has changed a little since this post was written. Click over to check out the updated post about HUD bid periods.
Bid periods are yet another point of confusion in the ongoing quest to buy a HUD home in Chattanooga. New HUD listings are posted on Tuesday’s & Friday’s each week with a 10 day bid period. During the bid period offers are submitted online by authorized HUD agents and can be from either owner occupants or investors.
At the end of the bid period, all owner occupant (OO) offers are considered first. If there is one or more acceptable offers from OO’s, the highest of these will be accepted. If there is NO acceptable offer from an OO, investor bids will be considered and if one of these is above the minimum, the highest one will be awarded the winning bid.
Here’s how it all shakes out: Let’s say a HUD home is for sale for $100,000. HUD’s minimum might be $95,000*. At the end of the INITIAL bid period, an investor has offered $97,000 and an OO has offered $95,200. Even though the owner occupant bid is lower, the bid will be awarded to them because it was still within the acceptable range.
If, at the end of the first 10 day period, none of the offers received are higher than the minimum, the home will then go into a daily bid in which investors & owner occupants are given equal chances.
*Just using this number to illustrate the point, we don’t actually know exactly what the minimum is. Anyone with a reliable crystal ball is encouraged to contact me (I’ll pay top dollar!)
UPDATE: This whole process is on the chopping block as of August 2010 – if you are thinking about buying a HUD home, contact me for the most up to date information.
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