I am thinking about putting a bid on a HUD home. The home is listed at 78,000 and my realtor is telling me that my closing costs and down payment will be around 7,800 and in order to win the bid I will have to bid more than the listed price bringing my total out of pocket close to 10k. Is this typical when purchasing this types of homes? Any advice from an experienced realtor would really help.
i dont' know much about the real estate industry but i do know your realtor has a vested interest in telling you to bid more. it means more money in his pocket. what sense does it make to ask to pay more than what the house is listed for?
It's a bid so I'm guessing overbidding will increase my chances of winning the bid. I.m just weary of throwing that much money down when mostly everyone I know who purchased a house only had to drop like 4 or 5k.
Get your realtor to give you the comps and that combined with looking at the house (it's condition) will tell you the price. You should get an experienced realtor to work for you- i'm assuming your is not since you mentioned you would like advice from an experienced realtor.
Your realtor sounds like a dumbass. It doesn't matter what the list is. What are the comps? The house might have been $100k back in 2005. And then it was foreclosed and now HUD has it for $78k. $22,000 discount right? Well, maybe. What are the other houses in that area selling for? If they're all selling for $70k, why would you pay $78k? Just because it's a HUD home and that has some implied discount in it? As for what you'll have to bring to the table, HUD down payments can be real low but it'll still be 4-5%. And closing costs is about the same. So the number quoted you sounds about right.
