We all have them on our phones and tablets to use for all kinds of ways to make life easier. Now, if you own an I-phone, and want to search HUDHomestore for homes, there is a simple, easy to use app, available for free! Hopefully the folks at Yardi Systems won’t forget us Android users !
I-Phone users can check it out at:
Most HUD homes have an exclusive period for owner occupants that lasts 30 days. The exception are the properties with uninsured status. These have a five day exclusive period. The way to know if your buyer qualifies is to look at the listing at HUDHomestore.com and see the Eligible Bidders category for the listing. This will identify whether the property is in the exclusive period or if it has been opened to all bidders. Then look at the Period Deadline date to see when the last day of the exclusive period will be.
Here is a screen shot from HUDHomestore. Please use this easy method to determine if a HUD home will work for your buyer type. You can click on the image in order to see a full size view.
HUDHomestore.com offers a new feature that selling agents and home buyers are going to want to know about!
Wilmoth Group offers classes for selling agents on how to successfully sell HUD homes. These classes offer several little-known tips that I share to assist agents in being HUD homes experts.
One of the issues that commonly is of interest is how to find HUD homes for investors. Most agents have heard that the owner-occupant preference period has been extended under the Marketing and Management III contract. There is some misunderstanding on this point, and it is in that confusion lies a golden opportunity for investors.
I will try and keep this simple. Come to a class to dig deeper into the details. Basically, HUD provides information for FHA buyers in each home’s listing that assists the FHA buyer in learnign if the home is approved for FHA financing or not. Homes that are approved for FHA financing can include properties that an FHA appraiser has identified up to $5000 of repairs. There is a process for the FHA buyer to complete those repairs and have FHA financing. If the HUD home does not qualify for straight up FHA or the $5000 repairs program (FHA 203B) then HUD places the letters UI in the FHA financing category on the listing.
The approved FHA (IN) and the 203B (IN w/Escrow) properties all have 30 days for owner occupant purchasers to have priority. No investor bids are possible until day 31. So one option for investors is to wait for these properties to hit day 31. From experience, not many of them do. They are priced well and the advantages for FHA buyers are too great.
It is the properties labeled for FHA financing as UI that you should search for investors. Look for the new ones that come on the market. It is possible they may have repairs that are as low as $5100-remember they did not qualify for the FHA 203B. Here is the kicker..HUD only has a five day owner occupant preference period for these properties! On day 6 of the listing for UI properties, investor bids are accepted.
Increasingly, banks and government agencies are making strong efforts to only sell to owner occupants. The game for investors has turned more to auctions and bulk sales. Bulk sales are for deep pockets. Here is a way the smaller investor can bid on properties shortly after they have hit the market. Combined with the possibility that the amount of repairs may not be substantial, this is the opportunity for your investors to participate in buying HUD homes.
This question is not asking for directions to a home. It is a common question after an agent or buyer see a HUD home and follow up by visiting the HUDHomestore.com site..and are not able to locate the home. What does it mean when the listing services all still show the home active…but it seems to not exist according to HUDHomestore.com? We made a new video to explain and to actually show you how you can find out what the status is, plus a few tips for monitoring the property that do not involve the listing services.
There is only one way to register to be able to make bids on HUD homes…and you can complete it directly with HUD! Here is a simple step by step explanation of the process and what to avoid when you decide to sign up!
Ah, the famous NAID. Not the “Native American Indian Dog”, or the “North American International Demoparty” or even the “Non-Anemic Iron Deficiency.” No the NAID I refer to is nothing more than HUD’s “Name Address Identifier.” Most importantly, you have no business showing HUD homes unless your broker has one!
Yep, that is what I said. I run into this on average twice a day. Agents showing HUD homes with no access to an NAID number. So, the buyer decides they really like the house and the agent says, “Great! Well now I just have to find somebody who will submit an offer for you.” Really professional and adds to the shining reputation of the real estate industry.
Yes, I have heard all the arguments. “”Why does HUD require you to register with them?” “Why is it so hard to get one?” ” Why does it take so long to get one?” Look I do not make the rules…but why do we have to complete a lot of paperwork to get a real estate license or join a Board? Licensees do those things with very little complaint. But, get registered to sell HUD homes? Oh, and did I mention it is FREE!
The facts are this. HUD homes are only available for bid at HUDHomestore.com. Brokers, followed by their agents, must be registered at HUDHomestore.com. To be registered the Broker must have a NAID. To get a new NAID it can take 6-8 weeks. The steps to the process along with a way to check the status of a NAID are here. NAID’s have to be renewed annually.
Every agent who discovers that they made a mistake and showed a HUD home to a buyer who now wants to make an offer, with no access to a NAID, contacts our company and requests we submit the offer for them. Simply, when we do that we become your buyer’s agent..with all attached responsibilities and liabilities. We will pay you a referral fee for assisting us in the transaction. That is the best offer I have for you.
One other tip…use to be brokers would get a renewal letter, from the local HUD contractor who administered the NAID program, that their NAID needed to be renewed. This is a annual process. It is now handled through HUD. I am not aware of anybody receiving letters. Your broker’s existing NAID will expire and you will not be able to make offers on HUD homes. It takes about two weeks to get a renewal. Tell your broker (or if you are the broker make a note) that the existing NAID package needs to be reviewed and determined when last approved. Then mark on a calendar somewhere at least 30 days prior to that annual renewal date to complete an updated package for submittal as per these instructions.
HUD homes make up a significant portion of the housing inventory today. If you claim to be a full service agent, then don’t spend another day showing HUD homes without a NAID.
For lots of reasons, foreclosure properties have gotten a bum rap with owner-occupant buyers and their agents. Much of the problem stems from the non-traditional sales process. Some of the issue is related to property condition. It is also fair to state that buyers agents have contributed to the problem by refusing to work in the parameters of the industry while cursing the process and the properties to their clients.
The times are changing and rather significantly. Agents who trash working with a bank owned property may be doing their owner-occupant client a disservice. Granted, the robo-signing fiasco added more fuel to the fire of these agents and buyers while setting back the confidence of potential purchasers. I think all of that aside, 2011 is going to be the best year ever for owner-occupant buyers who chose to buy a foreclosure.
Here are some of the reasons why:
Preferences. The three major servicers of foreclosed properties are HUD, Fannie Mae and Freddie Mac. All three are government owned and all three have placed sales to owner-occupants front and center. HUD provides a 30 day bidding preference for owner-occupants under their new program for foreclosure sales. Additionally, there is much needed transparency available to agents and buyers at the new site HUDHomeStore.com to assess a property’s condition before deciding to physically inspect it . Fannie Mae’s HomePath program offers the best financing in the industry through participating lenders. This very aggressive program offers 3% down payments, no mortgage insurance, no appraisal requirement, and frequent incentives for buyers and agents. Freddie Mac through its HomeStepsprogram is offering a SmartBuy Purchase Program that offers 2-year home warranty protection and other incentives for owner-occupant purchasers.
Condition: You have to have a history working with foreclosed homes to realize how far the industry has come in regard to what shape these homes are shown in. It was only a few years ago when we had clients that actually tried to sell homes without a trash out having occurred. Overgrown lawns, broken windows, the list of community eyesores was lengthy. There is no doubt that the entire industry seemed focused on keeping losses at a minimum with total disregard to how properties would likely only appeal to the investor buyer. In hindsight we can now see how all of that spun out of control and actually caused more foreclosures. Today, homes are cleaned out and secure. Regular property inspections by the brokers and field service companies are mandated. There is also a healthy discussion within the industry as to how much rehabilitation and staging should be invested by the servicer/owner to make the home more appealing.
Offer Process: This process scared many agents away. It was very time consuming and little status information could be obtained. Selling agents would look to the listing agents and we had no news and no way to really provide a timeline when a response might occur. A couple of things are happening to change this and make it more friendly to the selling agents. First, more and more the selling agents are going to be able to enter their offers on-line and have them directly submitted to the lender. The HUD system is what I would consider the template for others. An agent registers at HUDHomeStore.com, enters an offer while affirming an actual Purchase Offer signed by the buyer exists. Then an email is sent if their offer is accepted or they can log into their account and see that an offer was rejected. Fannie Mae is also testing an on-line offer system in select markets. I project in 2011 these systems will become much more common as they eliminate one of the ongoing concerns expressed by agents…”did my offer really get presented?”
So, as you consider purchasing a home, or representing an owner-occupant buyer, consider giving the foreclosed property market a new try. It is evolving and the changes, while brought on due to necessity, will allow us to leave the questions caused by the fall’s “robo-signing” fiasco in the long ago forgotten memory.
As we announced in August, Wilmoth Group was named a Local Listing Broker for HUD homes in areas that include Central and North Central Indiana, and Central, South Central, and South West Florida. In all of these areas we have existing offices but the expected increase in properties we will be valuing and marketing from each office is requiring more salespeople and staffing. We have been eagerly working to satisfy all the requirements of these contracts in order to start placing these homes on the market. That time is now.
First, just to answer the question of the day, HUD homes are not involved in the foreclosure issues currently in the news. It is a complicated discussion but the easiest explanation is that unlike the GSE sellers of foreclosed properties, HUD has actually purchased and owns the properties we are selling. The deed transfer to HUD is done outside of the process that today is under so much scrutiny. From HUD.gov:
A HUD home is a 1-to-4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim.
So, HUD homes continue to be a part of our inventory for sale.
Our first HUD homes are now being listed and they can be found in two places. Our site WilmothGroup.com is adding HUD related content and easy to search tools for locating HUD properties we are offering for sale. Also, HUD has launched a new site for all HUD homes at HUDHomeStore.com. WilmothGroup.com will actually have more pictures available for a home, but the HUDHomeStore site will offer much more than in the past.
One of the important differences about making offers on HUD homes is that your offer must be submitted by a registered real estate broker or one of their agents. All Wilmoth Group agents are registered and have been trained in the process of working with HUD when making an offer. This is a good reason to consider allowing us to help you with your HUD purchase. If you are an agent with another company, make sure your Broker is registered with HUD and get registered yourself at HUDHomeStore.com. Wilmoth Group is about to start a regular series of trainings for agents to learn how to negotiate the HUD sales landscape. More will be announced at our website.
HUD prefers to sell these homes to people who will live in the home. There are preference periods for offers and information regarding repairs that could be completed to bring a home to FHA standards. If you are considering purchasing a foreclosure for your home, you need a knowledgeable agent and loan officer on your team. We can help you with both.
In the next few weeks I will be adding more posts on everything HUD. Today we are excited and proud to have this opportunity to provide a service that will help so many potential homeowners and repair so many communities.
