Average Bid/list price for HUD Foreclosures is 114%

By
Real Estate Agent with Atlanta Communities Real Estate Brokerage GREC #208281

I received a call from a buyer who was interested in having me submit a bid for her on a HUD foreclosure.

It was listed at $37,000 and she wanted to offer $25,000.

If you aren't involved daily in real estate right now, I can see how you might think that it's still a buyer's market.  If you look at a price chart for this area, Clayton County, you can see how far prices have fallen and they seem to have been pretty flat for the past three years.

But my direct experience with helping buyers get homes tells me that one needs to make offers that might seem higher than what the comps. suggest in order to get a home.  It's a crazy world of multiple offers and buyers bidding more than full list price.  There also isn't much special anymore about having cash.  It seems that it's almost a necessity for the lower priced homes.

Just to verify my anecdotal experiences, I thought I would do a quick analysis of what it takes to get a HUD foreclosure in today's market.

At the www.HudHomeStore.com site you can see what the accepted bids were for properties over the past 14 days.  So I searched for homes in Clayton County and came up with 32 results.  They only post the "net to HUD" so one has to assume that there was a 6% commission and add that back to come up with the projected offer price.  One also has to take the time to look up what price it was listed for in the MLS.

Doing that, I came up with the following spreadsheet that shows that the average bid/list price was 114%.  They ranged from 97% to 160%.

In this particular market, if you aren't offering at least full price, you don't have much of a chance at getting the home.  That's just the way it is.  This makes me believe that we have already seen the bottom in prices and if you want a home you are going to have to get in front of the market or you'll keep chasing it up and up until you are totally frustrated. 

I'm seeing this not just in the low priced homes, but even in the million dollar homes.  Inventory is very low right now and there seems to be a lot of buyers.  Be aware of this and make your offers accordingly. 

Posted by

 

 

About the Author:  Tim Maitski has been a full time Realtor since 1999. He has sold several hundreds of homes in areas around metro Atlanta.  Tim started with RE/MAX Greater Atlanta and is now with Atlanta Communities Real Estate Brokerage.

 

Along with blogging on ActiveRain, he provides one of the best real estate websites in Atlanta at www.HomeAtlanta.com .

 

His proprietary  "Maitski Line Reports" chart out the absorption rates over the past 14 years in 37 different market areas.  Know when it's a good time to buy or a good time to sell.    

 

His online Property Tax Calculator allows you to compare property taxes in many counties and cities around the Atlanta area.  He provides the Atlanta MLS Power Search Tool that allows searches of homes using over 35 specific criteria.

 

Over the years, Tim has optimized his business so that he now can offer a huge 50% commission rebate to his buyers.  The more experience one gets, the easier the job becomes.

 

Tim also has a "Five Days to Sold" System that uses an intensive marketing blitz to create a showing frenzy that creates urgency and offers.

 

Tim is always looking to LinkIn with anyone who is interested in building their social network.

 

View Tim Maitski ●Atlanta Realtor●'s profile on LinkedIn

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
ActiveRain Community
Tags:
foreclosure
hud

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainer
417,385
Dan Hopper
Keller Williams Realty Downtown LLC - Denver, CO
Denver Realtor / Author / Advocate/Short Sale

Great information on HUD bids, Tim.  The process has really hurt the first time buying market.  Especially in the Denver area.  When HUD places an "AS-IS" value on the property, or defined as the appraised value ... the competition from investors and others that have a lot more cash can bid over that appraised value to win the bid.  A lot of first time buyers do not have above the normal 3.5%, for like an FHA loan, and then bring in the additional $5,000-10,000 to get the loan.

Mar 12, 2013 12:08 AM #1
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
560,551

Tim Maitski

Truth, Excellence and a Good Deal
Got a question? Not certain how to get started? Call me.
*
*
*
*
Spam prevention

Additional Information