How to Successfully Buy & Sell HUD Homes

Bidding on a HUD Home

Bidding on a HUD HomeThe process of bidding on a HUD Home is quite easy but it is best if you understand the process before trying it. Bidding on a HUD home does require that you have a Realtor and your Realtor must have a NAID number. Make sure you are working with a Realtor that has taken a class or really understands the process that bidding on a HUD home requires.

Finding a HUD home is just like finding any other home except it is actually easier to search on your own. All HUD Homes are listed on HUD’s site at If you find a home on that site, you know it is definitely available. As soon as a HUD home has an offer that is accepted, it is taken off of the site.

The bidding process is very fair as all the bids are sealed so that no one knows what anyone else has bid, even the listing agent. There is no way to cheat which is a real positive feature. If a HUD home is insured, which means it is available for FHA financing then it is open for bidding for ten days. On the eleventh day bids are reviewed and one may be chosen. If there is not an acceptable bid then the home will be available and bids will be reviewed daily.

All bidding is done online and the bid is very simple to complete. Your agent will need your proof of funds or loan approval, your social security numbers and the basic contract information that HUD requests. If your bid is selected, then your agent must mail everything to HUD’s asset manager and it all must arrive within 48 hours.

HUD even allows buyers to bid on more than one home at a time. Of course if you are an owner occupant you can only own one HUD home so be prepared for HUD to choose which home you get.

After your agent has submitted all the necessary paperwork to HUD then your HUD home will go through the closing process just like any other home. The only difference is that HUD homes are sold “as is” and this is something that will not be negotiated. If you find something unacceptable during your inspection period, your only choice is to repair it yourself after the close or to cancel the contract.

HUD Homes are sometimes in mint condition and other times will need a little TLC.

HUD homes are just like any other home on the market, so make sure to include them in your search for a new home.

Items Needed for a HUD Buyer Bid

Click here for a downloadable and printable PDF of this list.

**Names on Pre-Qual, Drivers License & Offer Must Match!**

  1. Copy of drivers license
  2. Pre-Qual letter of VOF
  3. Bank statement showing funds to cover FHA difference in price and downpayment
  4. Need to know how buyer intends to take title
  5. Need buyer’s social security number
  6. Need buyer’s home address
  7. Need to know the buyer’s offered price
  8. Need to know if they want to stay in a back-up position
  9. Best to have the EMD at time of meetings
  1. FHA Appraisal – No fee
  2. FHA – Section 1 inspection and clearance paid for
  3. FHA – LBP paid for up to $4K
  4. FHA – If offer over asking must show VOF difference +3.5% down
  5. Conventional loan can get a new appraisal which may come in higher than the asking price but no need for VOF difference (between asking price and offered price)

Other Resources (PDF Downloads)

Important Reminders Regarding Bidding & Lending on HUD Homes
AZ Selling Broker Quick Reference Guide
Overbidding & Escrow Repair MLS Addendum