Successfully Selling HUD Homes

Last week Carrie Cowan & I went to a HUD class presented by Vanessa Wilde. It was VERY information. Here is some of the information we learned. - Jodi

- HUD properties are FHA Foreclosures. Once the private mortgage insurance pays off the loan & they become the property of the government.
- HUD now has three asset management companies: Pemco, Matt Martin & HomeTelo.
- You can find all active HUD Listings at: www.hudhomestore.com. This site will have the most up-do-date status. If it's not on here, it probably has a contract. Check here first!
- All agents must register with HUD & HUDHomestore.com
- Properties are listed daily! (even on the weekends)
- Make sure you check the top of the listing for eligible bidders and bid submission deadline.
- If your buyer is getting FHA financing, the property must be E (insured escrow) and buyer must have escrow money for repairs (determined by HUD) which can be factored into the loan (FHA 203B long w/ repairs in escrow)
- The repairs escrow is held by the bank/lender until repairs are made. It's a case by case decision on how funds are released.
-If the property needs over $5k in repairs, it is NOT insurable
-FHA appraisals have typically already been done on the property and are usually online.
- All HUD properties close at Northwest Title Co. (816.792.3335)
- There are potentially 5 different HUD keys (vs the one universal key we all use to use). You MUST call co-op to schedule an appointment. Many HUD homes now have lock boxes on the property. Also, please sign the login form inside each home.
- Commission is now 3% for the buyers agent with a minimum flat commission of $1250.
- There may be multiple back-up contracts on a property and you are now unable to see other bids on a property
- Earnest money depends on the asset management company. HomeTelo & Pemco are $500 (up to $50k) and $1000 (over $50k). Matt Martin varies per property.
- HomeTelo typically has a 20 day cash closing, HOWEVER, it doesn't always close on time therefor you MUST file an extension (which includes a fee). Prepare your buyers for that!
- Typical financed closings are 45 days.
- If an offer is CANCELLED, it means the offer was reviewed but NOT accepted.
- If you are given a "bottom dollar" amount, make sure to add in your commission and any other costs!
- HUD listings are already designated selling agents, however, they will not sign the Agency Amendment
- you MUST have approval from the asset manager to do inspections (and get utilities turned on)
- only Active/Live termites will be treated
- HUD will correct lead based paint issues if it is under $4k.
- ALWAYS print the contract when you submit a bid online! There are certain areas that will be auto-populated and others you will need to write in.
- MUST include: Husband & Wife, Single Person, etc for contract to be accepted
- Earnest money to be held by: HUD Designated Closing Agent (#3 & #9)
- If buyer is paying cash OR getting conventional financing, make sure to check last box on #4
- Make sure #12 is initialed by buyer