I've read a lot about this, and know that HUD generally automatically accepts offers of 87-88% Anything lower is either countered or manually accepted later.
The Net. That is ALL HUD cares about is the net. So, your bid is further reduced by commissions and any closing cost concessions (which as an investor you won't have).
Keep in mind that in cases where the purchase price is low, HUD will often times offer a minimum commission amount to make it worth the time of either broker. This is usually $1,000-$1,200. It will usually tell you on the listing if a Broker minimum or bonus is offered on a property, and what it might be.
Also, you need an agent who is authorized to bid in that market to submit your bid for you. They need to be registered with HUD by their NAID #.
My only other question is this "little less than $93,000". Are HUD commissions generally 6%, 6.5%, 7%? What's a "safe" number?
Thanks Cara. Good advice. Actually my only investment purchase to date was a HUD house, so I get the process. Being out of state, I sure am glad they went to electronic signatures!
I have done a few HUD deals as an agent and the commission can differ but not usually. One that I am looking at now for reference is listing a 3% commission. However, when the agent is submitting your bid, they do have the option to change THEIR side (the buyer's agent side) and the listing side is a static 3%. Hope this makes sense and helps.
Short answer, a 6% commission calculation is a safe bet.