HUD hire appraisers to price their homes before they sale, the policy is that HUD lists the properties at the appraisal value. Appraisers are humans and sometimes they make mistakes, usually they over price properties but in the some few cases they underprice them.
When properties are underprice usually there is a multiple offer situation, and in some cases the buyer falls in love with the property and tells the agent to over bid on it. BE CAREFUL.
If the buyer is getting an FHA loan make sure you tell your buyer that whatever amount they overbid they will have to come to the table with the cash to pay for it. FHA wont let you borrow more than the HUD FHA appraisal value.
For example if the house is listed at $80,000 and your buyer wants to make sure they get it and bids $90,000 then FHA would only give a loan for $80,000 and buyer has to pay the $10,000 at settlement.
Please make sure that your buyer understand that. It woudl save you time and headaches to both of you.
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