We gave up on sending mailings to pre-foreclosures because our responses were negative and no one seemed to want to sell. Our focus went towards finding bank owned (REO) or government owned real estate. A lot of our energy went towards surfing the foreclosures on the internet and driving by different areas that we were interested in living. After repeated searches, in the spring of 2003, we found a HUD house that seemed interesting in Plainfield, NJ. We drove around Plainfield a number of times and decided we would be willing to live in certain parts of the town. We called the realtor that had the house listed and scheduled a time to view the property. It was an extended cape cod home. The bidding started at $139,000. If you are not familiar with buying HUD real estate, this is how it works:

Only HUD registered brokers are allowed to submit offers.
The homes are listed as Owner Occupant or All Bidders.

Owner Occupant – You have to live in the home for a minimum of 1 or 2 years (I forget which one)

• New listings are offered to “Owner Occupant” bidders for the first 10 days (bid deadline is 11:59 on the 10 th day).
• On the 11 th day all bids will be reviewed and the highest acceptable net to HUD bid will be acknowledged as the winning bid by 12 PM on the 11 th day.
• Once an acceptable bid has been acknowledged, the winning bidder will have 48 hours to submit a sales contract for review.

All Bidders – Anyone can bid on the home (including investors)

• On the 11 th day properties (without winning bids) will rollover into the “All Bidders” priority (investors), at this point investors can place a bid on the property but investors bids will not be reviewed until the 12 th day.
• On the 12 th day they will post bid results by 12 PM.
• If no bids meet HUD’s requirements as an acceptable offer, the property will stay on the market until an acceptable offer is submitted.
• All bids will be checked daily until an acceptable offer is received
• Properties that are re-listed and reduced are listed every Friday and are offered to Owner Occupants bidders for the first 5 days (bid deadline 11:59 PM on the 5 th day) before being offered to all bidders on the 6 th day).

To get further details on making offers on HUD real estate, you can contact a registered broker (choose your state) or visit the HUD site.

So we went with the realtor to view the property. It definitely needed work but it wasn’t too intimidating to us. There were hardwood floors that needed to be refinished. The kitchen needed new cabinets (the previous owner ripped them out). They also took all the appliances. I thought the bathroom needed to be redone immediately. My husband felt it just needed a good cleaning. We definitely had our disagreements about the property but we did agree that it was the house for us. Now we needed to come up with an amount to submit. Our realtor suggested that we should always submit the one offer that we would not feel bad if we did not get it by not making that offer. In other words, submit your highest and best offer for the home. What I did not like about the bidding process for HUD and government real estate is that people usually overbid for properties. We knew that we would need to make an offer that was competitive. We decided to bid $180,000. I’m not sure if HUD still does this but they usually poste the winning bid. On the 11 th day, we went to the site to find out the winning bid and it said $180,500. When we first saw the 180K, we thought we won because we also saw the same broker firm listed as the winning office. But once we realized it was $500 more than our bid, our hearts dropped. We began to question what had happened. We contacted our realtor and asked how he submitted the offer…was it anonymous? He stated that he was sick and could not go in the office to finish the paper work so he faxed it in to the broker and asked him to complete it. This meant that anyone in that offer could have reviewed our bid. We were crushed. We complained to the broker and told him that it was not right and we were going to talk to the HUD appeals office. We spoke to the HUD appeals office but they said there really is nothing they can do because there is no evidence of foul play; even though it is highly suspicious as to what has happened. We continued to talk with the broker (really blowing smoke) to see if there was anything he would do. As a rule of thumb, brokers do not want to get on the bad side of HUD nor be labeled an office of fraud. Three or four days later, we got a call from the broker stating that the other buyer pulled out so we will be able to purchase the property as next in line as the winning bid. We really didn’t expect anything to happen but was pleasantly surprised of the outcome.

We were able to purchase the property and it became my first home, a HUD foreclosure. What I’ve learned throughout this whole process is patience. I was the type of person that when I wanted something or needed anything, I would do it or get it done immediately. Not with real estate…I had to search and wait, search and wait, bid and wait and wait. That part was frustrating but it was great to be a home owner. My belief is; what God has for you, will be for you. Evidently the house in Plainfield was meant for us.