Posted by Irwin on March 21, 1999 at 12:35:19:
This sounds like either a VA or FHA owned property, which the broker has advertised, hoping to find a buyer who will let him put in the bid for them. You have to bid on VAs and FHAs through brokers. If the broker’s buyer is the successful bidder, he can make up to a 6% commmission.
This sounds like it’s a VA because financing is being offered. VA sells on contract with 3% down. The interest rates are also low. However, they won’t entertain a low ball bid, nor will they grant any options.
If it’s an FHA, there are two stages of the sale. In the first stage, the property is offered only to owner occupants. You have to agree to live in the property for at least a year. No flips possible. In the second stage, assuming in doesn’t sell to an owner occupant, it is open to investors. You can bid anything you wish, but, depending on where you are, there can be stiff competition. It’s a big guessing game. HUD doesn’t finance these, so you have 60 days to arrange financing and close.
The broker can fill you in on details. ANY BROKER CAN submit the bid for you. You don’t have to use the one who ran the ad.