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