For the last two weeks I have had a HUD Home Listing located at 2715 Decatur Street, New Orleans…this home at face value would seem to be priced way below market, is in an area of New Orleans called the Marigny which is a charming up and coming neighborhood adjacent to the French Quarter.
When this property came on the market it was available through a lottery and only Non Profits and Government Agencies were allowed by HUD to bid on the property. After the first week the property opened up to Owner Occupants and for the past week Non Profits, Government Agencies and Owner Occupants have been allowed to bid.
We have had close to 50 showings on this property and even though the offers do not come to me but go to HUD in talking to numerous agents I get the sense that at least 12 owner occupant offers have been submitted. Not all agents understand what the definition of an owner occupant is but it is just what it says HUD expects that whoever buys the property will live in it and move in within 60 days and live there for at a year. Several consumers have asked how HUD would know if they are an owner occupant and the answer is that both the buyer and the agent who submits the offer must sign a document verifying that the buyer is indeed an owner occupant and if the agent has any indication that the buyer is an investor and signs the owner occupant document that would be fraud and there are penalties. The other way HUD would know is because individuals who lose the house through the bidding process are watching and will report you if they see a “For Sale” sign on the property in the next year.
This morning if you go to the HUD site you will see the above which indicates that the property is now open to “All Bidders” which means investors however the system automatically switched over to this category at midnight last night and if you read the red disclaimer “Availability of Home is Subject to the Asset Manager accepting a bid from earlier bid period or removing the home from the market” that means that all of the offers that were received from the previous period have not been reviewed yet and there may be an acceptable bid which they will accept.
On Monday morning HUD will review all of the offers and if there is an acceptable one they will take it. That has to happen before they will review any investor bids that might come in over the weekend or on Monday. Agents and buyers should not assume that there wasn’t an acceptable bid submitted because this has opened up to investors. It is simply the weekend and no one is there to review the bids and HUD employees are not there to do the data input on the site if an offer has been accepted.