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Chapter 10: Submitting Your Bid (full)

After deciding upon a bid amount, the next step in the process of buying HUD homes is to submit the bid. When the bidding process is being completed, every detail is important. Proper execution of each document is essential and a problem with even a small detail can result in a rejected bid. Before submitting bids online to HUD, quality real estate agents should take care of the following details:


Provide HUD with any disclosures the state requires regarding agency law and representation.

Fill Every Blank

Ensure that every blank is filled in on the HUD contract and the included addenda. Every page should be either signed or initialed as required and blue ink should be used for signing.


Earnest money deposit should be collected in certified funds.

NOTE: Personal checks may not be used. The agent must certify when making the bid that the certified funds have been collected.

If real estate agents fail to submit forms that are fully correct, changes and initials from the buyer may need to be immediately executed. Contracts that are incomplete or faulty are not tolerated and may result in the next highest offer being accepted. Accuracy and diligence will ensure the transaction goes smoothly.

Once again, this is an instance when having a high quality, experienced real estate agent pays off. Agents who fail to pay attention to every detail may lose the bid for their buyers, dashing their hopes of home ownership. Every rule should be followed carefully without exception.

To ensure that real estate agents pay attention to every detail, it is worth the buyer’s time to download their own copy of the “Owner Occupant Sales Package.” This downloadable package can be found at the property detail page on Buyers should read the contract and ask their real estate agents any questions that they encounter along the way. The more informed the buyer is, the more involved they can be in the process of bidding on and purchasing HUD homes.

Electronic Filing Addendum

Realizing that each state has specific addenda that must be filled out is important as well. One addendum is the Electronic Filing Addendum. When the bid is submitted by the real estate agent, they then should print the confirmation sheet that includes a confirmation number for the bid.

The printed form and the electronic filing form should contain corresponding information, which agents and buyers should check for any errors. The information pertains to the social security number and name of the purchaser as well as the property address of the HUD home. The agent and purchaser must both sign the addendum and then it is added as a part of the agreement.

Owner Occupant Addendum

The Owner Occupant Addendum is important and declares that the purchaser will be occupying the property as their primary residence for a minimum of 12 months. It also declares that the purchaser has not purchased another HUD property within the past two years.

Buyers must note that HUD offers a Radon Gas and Mold Notice as well, which discloses that the home has not been tested for radon gas and mold. Both of these conditions may pose serious health effects.

Home Inspection & Appraisal

HUD offers a disclosure that notes how important it is to Get a Home Inspection. A home inspection allows buyers to evaluate the property’s physical condition and the condition of the mechanical systems on the property as well. This document serves to point out that home inspections and home appraisals are two very different things and they serve very different purposes as well.

An appraisal is designed to estimate the property’s value and to ensure that homes meet minimum property standards. This important form allows buyers to waive their right to a home inspection or to opt to have a home inspection completed on the home. Once HUD signs a contract, buyers are usually allowed 15 days to have a property inspection completed.

These inspections may be done in a two-day period when utilities are activated. In order to request utilities to be activated so appraisals and inspections may take place, a special Utility Activation Form must be filled out. The costs associated with activation and deactivation of the utilities will be the responsibility of the buyer.

Other Important Addenda

Certain other addenda may be included, and buyers should be aware of them and their importance. Some of the other addenda that buyers may deal with include the following:

  • Forfeiture of Earnest Money Policy
  • Inspection Addendum to Sale Contract
  • Notice to Purchaser Addendum
  • Closing Extension Policy
  • Lead Based Paint Addenda

While buyers may feel overwhelmed with all the information that is needed when submitting a bid, hiring a HUD experienced real estate will take the pressure off the buyer. Buyers still must be aware of the requirements, but a quality agent can guide them through the bidding process, ensuring that the bid is submitted correctly with no errors or missing information.

The value of an experienced, HUD qualified real estate agent cannot be overestimated.