How the HUD Bidding Process Works in Indiana, Illinois (All States at HMBIWeb)

If you are a buyer interested in purchasing a home from HUD and you live in one of the states serviced by HMBI (property management company responsible for HUD homes in the 10 states they represent), this brief tutorial will explain to you how the bidding process works.

If you are interested in seeing a HUD home you'll first need to find an agent that has the ability to show HUD homes as they require a special key for entry.  It's also a good idea to verify whether or not their office is a HUD approved broker as this is required if you decide you'd like to place a bid on one of the properties.

Once you find a home you are interested in and decide to place a bid the following should happen. 

1. You'll need to inform your agent that you found a home you like and would like to proceed with submitting a bid for the property.
2. Provide your agent with a copy of your Driver's license and social security card as your legal name and social security number are required when submitting a bid.  If you'll be purchasing the property with someone else, please provide a copy of their driver's license and social security card as well.  If your name or SSN fails to match the information submitted with your bid, HUD will CANCEL your bid.
3. In addition to your Driver's license and Social Security number, you'll also need to let your agent know the purchase price, the amount (if any) you'd like to request for closing cost assistance (the HUD site will only allow your agent to enter up to 3% of the purchase price), and the type of financing you'll utilize to purchase the property.
4. Your agent will then submit the bid.
5. You can check your bid results after 1:00 PM Central time the day after bidding closes.  There is an owner occupant period for bidding which usually lasts 10 days.  If no bids are submitted during that period, the bidding is opened up to everyone (i.e. investors) and bids are then reviewed on a daily basis.

To determine whether or not your bid was the winning bid you'll need to see who the Broker listed is and the purchase price.  If they match your offer and broker, then you've likely won the bid.  Your agent will also be notified at which time the rest of the purchase process will proceed.

If your offer is accepted, your agent will then collect your earnest money check and walk through the packet that must be submitted to HUD within 48 hours of HUD's acceptance of your bid.  HUD also requires that you close within 45 days of acceptance of your offer. 

Once your offer is accepted and the actual paperwork is submitted, you'll then work through the rest of the purchase process including obtaining your financing, homeowner's insurance, and inspections.  HUD homes are sold AS IS; therefore, if you find major issues with the home during inspection, you have the right to cancel your contract.

Please feel free to contact me with any questions you may have about the area or if you'd like me to send you the current active listings in the area. I look forward to hearing from you!

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