You won’t find too many HUD homes in Columbus that are available to investors. You need a good strategy to be successful when you compete for the limited number of HUD listings.

Last week one of my investors won a bid on a HUD home that was in fairly good condition, offered at a reasonable price, and did not get offers from other buyers. After submitting a few bids and some back-and-forth with HUD, my buyer won the bid at less than 80% of the list price.

A 20% discount is certainly not the best you can get.

The discount will depend on the original asking price and how that compares to the market values of similar homes in the area. Quite often we see HUD houses offered at a relatively low price, especially, if they are uninsured and cannot be purchased with regular FHA loans. So, you may not need a huge discount from the asking price to make it a good deal.

Here are 3 bidding strategies that will help you get your offers accepted quickly:

1. Make Cash Offers on Uninsured HUD Homes

Most HUD homes available to all bidders are uninsured. This means that they need more than $5,000 in work – or more than 35% of the purchase price. When it comes to cheap homes, 35% is not that much, and you may be able to buy a good quality house at a bargain price.

HUD can’t sell these homes with FHA loans. They know that only a few buyers will go through the hassle of applying for a 203k rehab loan. Therefore, cash offers are best. If you don’t have cash, work with a hard money or rehab lender that can give you a pre-approval letter and close quickly.

2. Respond to HUD’s Counter Offers

In many cases HUD will respond with a counter offer. We suggest that you submit a reasonable, but low offer first – say 65% of asking price. If there are no other bidders, HUD will counter with a number they will accept.

The counter offer HUD sends out is the NET amount they will accept, so you have to add the commissions to the net to get the total contract amount. The buyer’s agent may reduce their commission, if that is necessary to make a deal work.

You do not have to accept HUD’s counter offer. You can submit a lower bid. As these homes are on a daily bidding deadline, you can submit a new offer every day. If there are no other bidders, there’s a good chance HUD will accept a lower offer or continue to counter.

Once other bidders get into the game and offer more than HUD’s counter, you may be out of luck. All bidders get the same counter from HUD.

3. Be Patient and Ready

There are not too many HUD homes for investors. But great deals appear on the market every single month. There is no logic, why some homes are offered at a bargain price and others are overpriced. You just have to watch what’s happening on the HUD home store. An experienced Columbus real estate agent will gladly do it for you.

You have to be ready and pull the trigger when the right deal comes around. Over the past year we had almost new condos offered for less than half of their retail value, we saw a duplex in German Village sell for the price of one of the units, and we found rent ready HUD homes listed for only $11K.

Bonus Tip for HUD Investors

HUD is more likely to accept lower offers on homes that fell out of contract before. Sometimes the relisting of a HUD Home triggers a price reduction as well as a change from insured with escrow to uninsured.

These are the deals where you get the lowest offers accepted.

Always keep in mind that HUD is a motivated seller. They make mistakes occasionally that you can profit from. But they do not give their properties away just to get rid of them.

Despite the fact that the average listing price for Columbus HUD homes has increased for 2 months, the number of HUD homes available to all bidders reached an all time high.

In average, Columbus HUD homes are now more expensive than anytime since January 2010.

A higher price indicates that more suburban HUD homes are on the market. These Columbus houses are usually larger, in nicer subdivisions and in much better condition. The good news is that more of these desirable HUD homes are now available to investors.

As an investor you absolutely need to take advantage of this opportunity NOW! Once the transition to the new asset managers has been completed, you will be shut out of new homes for at least a month.

Among today’s new, suburban HUD listings you will find 3 homes in Hilliard, 1 in Worthington, and 1 in Gahanna.

And there’s more …

There are a ton of relists!  We featured many of these relists a few months ago, such as Royal Forest Blvd in Clintonville and Firstgate Drive in Reynoldsburg. This one has been around for more than a year! The first offer on this house was accepted in August 2009!

Listing Statistics

Total homes available: 186 (last week: 178)

Owner occupants: 71
All bidders: 115
New listings: 22
Sunday deadline: 22
Relisted/Price reduced: 27

Median Price: $75,000 (last week: $72,000)
Average Price: $77,872 (last week: $73,694)
Highest: $205,000
Lowest: $5,400

Homes less than $50,001: 64 (last week: 61)
Between $50,001 & $100,000: 65 (last week: 74)
More than $100,000: 57 (last week: 43)

Call me at 975-9650!
Now’s the time to submit an offer!

Thanks for reading our Columbus HUD Homes Blog
Posted by: Susanne Novak, ABR, FIS, GRI
Columbus Realtors specializing in
HUD Homes, Shortsales, Investment Real Estate
(614) 975-9650

We are in the middle of the transition. Most things you know about buying HUD homes will change. The transition will be smooth, but have a serious impact on investors!

HUD’s new Asset Managers will begin taking over listings next week. By the middle of October the transition should be completed.

The new federal listing website will be HUDHomestore.com. They already started uploading HUD listings. It’s still early and you won’t find complete information there, yet. This website will replace the NHMSI listing portal.

Many changes are coming your way. Therefore, I plan to publish a HUD Home Buying Workbook next week for you to download. I will email you as soon as it is available.

There is one significant change for investors I need to mention today. In the future new HUD listings that are insurable (IN) or insurable with repair escrow (IE) will be exclusively available to owner occupants for the first 30 days.

Uninsurable HUD homes will only have a 5 day exclusive period for owner occupants.

This means that investors will be locked out of the newer, suburban HUD homes for a full month!

Investors can still bid on the HUD homes in today’s Bargain Hunter List. The new rules will probably take effect next week. Do not delay and grab one of the 119 bargain homes today.

Summary of Bargains

HUD Homes available to all bidders: 119 (last week: 120)
Boomerang homes (relists from Fri): 19 (last week: 17)

How Much Did Featured HUD Homes Sell For?

3348 Yozuri Dr, Columbus OH
4BR/3.0 BA 1,948 sqft Asking $77,000
Offer accepted on 09/07/10 for $77,025

6141 Braet Rd, Westerville OH
3BR/3.0BA 1,892 sqft Asking $150,000
Offer accepted on 09/07/10 for $117,000

3089 Bembridge Rd, Upper Arlington OH
3BR/2.5BA 1,623 sqft Asking $157,500
Offer accepted on 09/08/10 for $161,312

Call me at (614) 975-9650 to submit your offers!

Thanks for reading our Columbus HUD Homes Blog
Posted by: Susanne Novak, ABR, FIS, GRI
Columbus Realtors specializing in
HUD Homes, Shortsales, Investment Real Estate
(614) 975-9650

The number of Columbus HUD homes available to all bidders has reached a new high.

Is this bad for owner occupants?

Absolutely not! HUD actually prefers owner occupants. HUD’s objective is to increase home ownership. Since the peak of the housing boom the home ownership rate has steadily decreased in America. So HUD is failing in its mission.

If you are an owner occupant, do not hesitate to submit an offer on a HUD home, even if it is already available to investors. Your chances of winning the bid are excellent!

I have seen many situations where HUD accepted a lower bid by an owner occupant buyer over a higher cash offer from an investor.

Take a look at today’s HUD homes map. It is full of green markers – the locations of HUD homes available to everyone.

You can get your link to today’s HUD homes map by joining our email list. Click on the blue button at the end of this post or enter you email in the box to the right.

You won’t regret it!

Listing Statistics

Total homes available: 193 (last week: 185)

Owner occupants: 86
All bidders: 107
New listings: 26
Sunday deadline: 31
Relisted/Price reduced: 29

Median Price: $70,000 (last week: $70,000)
Average Price: $71,712 (last week: $72,608)
Highest: $188,000
Lowest: $7,000

Homes less than $50,001: 71 (last week: 64)
Between $50,001 & $100,000: 75 (last week: 76)
More than $100,000: 47 (last week: 45)

Call me at 975-9650!
I can fill you in on the best bidding strategy for owner occupants!

Thanks for reading our Columbus HUD Homes Blog
Posted by: Susanne Novak, ABR, FIS, GRI
Columbus Realtors specializing in
HUD Homes, Shortsales, Investment Real Estate
(614) 975-9650

The Dog Days of Summer have an impact on Columbus HUD Homes sales.

Owner occupants seem to delay their HUD home buying decisions while they are busy with vacations and other summer activities. This is not unusual. Almost every year June and July have been pretty slow months when it comes to selling real estate.

This creates great opportunities for investors. There are more suburban HUD homes for investors than any time I can remember.

On today’s bargain hunter list you will find 8 HUD homes in Reynoldsburg, at least 2 in New Albany, 2 in Upper Arlington and more in most other Columbus suburbs.

Are you a serious investor?
Now is the best time to submit your offers! There’s less competition from owner occupants. What’s more, there may not be any opportunities to buy HUD homes for a month, when the transition to the new management company begins.

Give me a call at 975-9650! I would like to share with you an incredibly low offer I just got accepted.

Summary of Bargains

HUD Homes available to all bidders: 108 (last week: 130)
Boomerang homes (relists from Fri): 28 (last week: 22)

Bidding Results of Featured HUD Homes

Only two of the five HUD homes I featured a week ago received acceptable offers. See details below.

1575 Lancaster Ave, Reynoldsburg, OH
3BR/1.0BA 1,452 sqft Asking $119,000
Offer accepted on 07/20/10 for $103,069 – 13% below list price

8514 Old Field Birch Dr, Blacklick, OH
3BR/2.5BA 2,456 sqft Asking $148,000
Offer accepted on 07/19/10 for $128,000 – 14% below list price

Thanks for reading our Columbus HUD Homes Blog
Posted by: Susanne Novak, ABR, FIS, GRI
Columbus Realtors specializing in
HUD Homes, Shortsales, Investment Real Estate
(614) 975-9650

Columbus HUD homes offer great potential for real estate investors and land lords. Unfortunately, there are not too many around. If you follow our blog you know that the number of HUD homes available to all bidders (investors) has shrunk considerably since the beginning of this year. Only 15% of all Columbus HUD homes listed each Friday are available to investors.

So what are the best strategies for investors to win one of the few remaining deals?

I want to offer you four tips to increase your chance of success when you are looking to buy a HUD home as an investor or landlord. Combined with the great information you find on this blog you will surely hit a winner!

Tip 1: Be Ready

You need to be prepared to submit an offer within 24 hours and act immediately, when a deal becomes available. Once the exclusive 10 or 5 day period for owner occupants is over, HUD will accept bids every single day. You can submit your offer in the afternoon and you will know the  next morning, if you are the winner.

The best way to prepare for submitting offers quickly, is to have all your HUD documents signed and ready to go with your real estate agent. With active investors I usually have an earnest money check deposited with our brokerage and the contract documents pre-signed. You can simply call me and I will submit the offer for you before midnight. If you are the winning bidder, we can simply finish the paperwork and overnight it to HUD.

Less experienced agents often lose deals, because they did not submit the original paperwork to HUD within 48 hours of notification!

Tip 2: Focus on Re-Lists

As an investor your best chance to win a low ball offer is when you focus on properties that have been relisted. This means that a previous contract fell through and HUD has to start from scratch. With relists there is a 5 day exclusive for owner occupants, so investor can submit their bids on Wednesdays. 

HUD is more motivated to sell relists to investors at a discount. If we notice that a property has been relisted a number of times we notify our customers. These are the best opportunities for investors, because occasionally HUD accepts discounts from the list price of 50% or more.

Tip 3: Look for HUD Homes that need Work

Owner occupants buy up all Columbus HUD homes that are listed as ”Insured” for FHA purposes. This simply means they don’t need any repairs. A large majority of HUD homes is listed as “Insured with Repair Escrow”.  Again, owner occupants buy many of these homes, but when the repair escrow exceeds $5,000, these Columbus houses become more difficult to finance and most owner occupants don’t want to deal with them.

If you find a home that is “Uninsured” you should take a closer look. It is very likely that a owner occupant won’t get financing for this home. FHA requirements are pretty tough right now. It is best to make a cash offer when HUD notices that they can’t sell a home with FHA financing. We also see that the insured status of properties changes when they get relisted, because a buyer may have discovered problems during the inspection.

The disclosures for most HUD homes indicate that there is mold in the house. Do not automatically reject these homes. Inspect them before you make an offer to decide for yourself what level of mold remediation is necessary.

Tip 4: Bid on Wednesdays

I suggest you submit your offer on Wednesday. Why? Because the HUD homes that were relisted on the previous Friday are reserved for owner occupants for 5 days – until Tuesday midnight. These relists offer a great opportunity for real estate investors to get a lower offer accepted. You probably know that we call these homes boomerangs, because some of them have been coming back every month as one contract after the other falls through.

Here’s One Final Bonus Tip!

When you make an offer on a relisted home, do not offer more than the previously accepted bid. This may sound obvious, but you won’t believe how many buyers and agents submit offers that are substantially higher than previously accepted contracts.

Although HUD publishes bidding results, these numbers are no longer available on their website when a property is relisted. Except for our customers! We keep a database of HUD bidding statistics exclusively for our clients. If you work with us, you will know what HUD accepted previously, and we will submit an offer that is competitive, but not too high.

Call me at (614) 975-9650! I’d like to help you develop a customized bidding strategy to win all your HUD Home offers!

Thanks for reading our Columbus HUD Homes Blog
Posted by: Susanne Novak, ABR, FIS, GRI 
Columbus Realtors specializing in
HUD Homes, Shortsales, Investment Real Estate
(614) 975-9650

Investors don’t have much choice when it comes to buying Columbus HUD homes. I appears that any halfway decent house is picked up by owner occupants in the first go around, i.e. during the initial 10 days reserved for home owners. And what’s left, is usually overpriced or uninsured.
 
You may wonder why this is the case. Why are HUD Homes selling out to owner occupants every week? And why are hardly any Columbus houses left for investors?  Read on, here’s my explanation:

First of all, HUD’s mission is to sell to Owner Occupants. Their policies and procedures clearly favor someone who moves into the house. Owner occupants get extremely favorable financing terms ($100 down FHA loans and $2,500 toward closing costs or repairs) and an exlusive 10 day period, so they don’t have to compete with investors.

Second, there is a rush to take advantage of the $8,000 first time home buyers tax credit. This means that owner occupants can get an additional 10% discount (up to $8,000), if they close before December 1, 2009. That’s real cash in your pocket, which buyers can use to remodel or furnish their new house or pay other bills.

Finally, HUD homes are good qualitiy residences that you can buy at a discount. Most HUD homes are insured or insured with a repair escrow and need only cosmetic repairs. Many of these Columbus houses are in the suburbs, and only a few years old.

As an investor you may ask yourself what’s your alternative? Based on my most recent experience, I can tell you that REOs (bank owned homes) are not a good choice either. Currently, it takes between 5 and 6 months for a Sheriff’s deed to get recorded after the foreclosure sale. If you make an offer on a REO, you have to make sure that the deed has already been recorded. Otherwise, your patience will be put to the test and nobody will and can give you a firm date on when you can close.

If you have any questions or thoughts on this topic, please leave a comment or send me an email. I can help you find an investment property or a residence for yourself, and I will make sure you don’t run into major delays.

Thanks for reading our Columbus HUD Homes Blog
Posted by: Susanne Novak, ABR, FIS, GRI 
Columbus Realtors specializing in
HUD Homes, Shortsales, Investment Real Estate
(614) 975-9650