New HUD Process
I had the opportunity to attend a webinar for new HUD listing brokers and there are somechanges, I think HUD is improving their customer service and their system, Ihave been selling HUD homes since I started in real estate 5 years ago, alwaysfrom the buyer side and sometimes it was very frustrating, and I think some ofthe new changes will make things easier.
I think the most important change is the time allowed for home owners to purchase FHA uninsurablehomes, in reality it is harder for a home owner to do all the renovations, andsome either don’t qualify or don’t care much about a renovation loan. Now withthe new deadline, it makes more sense for investors to start bidding earlier.
Well here is an overview of the changes.
· Separatecontractors responsible for property management and marketing/sales.
· HUDHomestore.comis a one national site for everything.
· Commissions,minimum $2,500 divided equally between listing agent and buyer’s agent. Maximum6% commission also split equally for both listing and buyer’s agent.
· NewBroker Registration Process.
· Earnestmoney (made out to HUD) submitted with the contract.
· ElectronicLock Boxes.
HUD has divided the country in 4 contract area and every region is divided in a smaller set ofsubregions.
HUD register, (no only listing agents) brokers may advertise, and hold open houseson HUD properties, however they must gain approval from the Asset Manager.
For agents to bid and sell HUD homes, their broker has to be approved by HUD and have a NAIDnumber and also both broker and agents must be register with HUDHomestore.com.About this site it is one site for the entire country, purchasers will see whatbroker see, bringing more transparency to the transaction, Asset Manager willlist properties on a daily basis instead of once a week. Also this website isthe only place to submit a bid.
House insurable or Insurable with Escrow will have an Exclusive “Owner Occupant”period of 30 days, a 10 day biding period and if no offer is accepted then bidswill be reviewed daily for another 20 days only for owner occupant.
For Uninsurable Properties there will be a 5 day exclusive Owner Occupant period, after thatbidding will be open to all purchasers on a daily basis if an acceptable owneroccupant offer was not received.
Also agents have to make sure they have complete sales contract HUD form 9548 andcertification of broker form, Lead Base paint, Radon and Mold, MED, ExtensionPolicy, Home Inspection, Owner Occupied (if applicable) and local requireaddenda, together with a pre-qualification letter form a certified, licensedlender if sale contains a mortgage contingency. Agents have 48 hours to submitall those documents to HUD after bid acceptance
Earnest money will be held by HUD’s designated closing agent, and they will notify thebrokers who will closing agent will be once the contract is ratified.
Important Reminders
Never take or give a property key to anyone, absolutely no repairs prior to settlement,remember that all HUD homes are sold ASIS, do a pre-settlement inspection, alldocuments and contracts have to be submitted to HUD with in 2 business days.
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