HUDHomestore.com offers a new feature that selling agents and home buyers are going to want to know about!
Posts Tagged ‘HUD’
New! How To Locate HUD Home Bid Results
Wednesday, February 8th, 2012Role of FSM’s In Selling HUD Homes
Thursday, January 19th, 2012A new video has been posted to our YouTube channel with more information to help you get your arms around the process of selling a HUD Home.
The Opportunity For Investors At HUDHomestore
Wednesday, December 14th, 2011Wilmoth 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.
HUD Announces Changes To Selling Agent Bonus as of 12/1/11
Thursday, December 8th, 2011HUD Selling Agent Bonus Incentive Changes
Thursday, December 1st, 2011
As of December 1, HUD has changed the selling agent incentive plan that was available to agents in Florida and Indiana. The new incentive offers bonuses between $300 and $600 when properties close in 43 days or less. Another great reason to sell HUD homes!
You can read all the details of this change at our website including the requirements for how to document that you have earned the bonus. In general, we are finding that all HUD homes are ready to close in this time frame so the structure of this incentive places the burden on the selling agent and the buyers lender to perform. Something to consider when putting those bids together.
Where Is My HUD Home?
Wednesday, November 9th, 2011This 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.
HUD Selling Broker Registration-Put Away Your Credit Card!
Friday, October 21st, 2011There 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!
My Buyer Wants To Use Their Title Company
Monday, October 10th, 2011One of the more frequently asked questions is how can HUD force my buyer to use their settlement company? It is a mistaken notion that leads anybody to that conclusion. Here are the facts.
The Federal Real Estate Settlement and Procedures Act prohibits as a condition of sale that the buyer purchase title insurance through any particular provider. Indiana and Florida have similar codes that are as strict, if not stricter.
HUD has national closing agents who manage the closing process. Every county has a HUD closing agent.
If a buyer uses the HUD closing agent they will be provided a savings as HUD will pay the cost of settlement. This is why it is usually suggested as in the interests of the buyer, that the HUD closing agent be used.
The buyer though is free to use a different title company or settlement provider.
So, if you are an agent working with a buyer who insists they want to use a certain title company, you should explain to them the extra expense and the possibility that working in the HUD closing agent network might be advantageous to the process. Otherwise, you should not prevent the buyer from selecting a different settlement provider!
Also, if you are the selling agent, don’t have any skin in this game other than your selling agent fee. There are some very strict federal and state laws that prohibit compensation for leading a buyer to a certain closing provider. Go back and review the Real Estate Settlement and Procedures Act if you have any questions.
“Hard To Sell” HUD Properties and What The Selling Agent Needs To Know
Thursday, September 8th, 2011
Recently, HUD made a change in the selling and listing agent compensation structure. This change affects homes on the lower end of the price spectrum..specifically homes with accepted bids under $42,000. Originally, when the new HUD contract (known as Marketing and Management 3) was introduced, there was a base minimum payment to selling and listing agents of $1250 per side, or $2500 total. So the formula that a selling agent could use to request their selling agent fee was up to 3% or $1250 minimum.
In August that all changed. Here is the announcement:
HUD has eliminated the minimum commission of $2500, split between the selling and listing agents, and it is no longer available on the HUD Homestore. Going forward, all listings will reflect a maximum 6% total commission, split between the selling and listing agents. As of now, HUD has no plans to increase the commission percentage beyond 6%, but only may do so on a case by case basis.
Please note this change affects the Local Listing Brokers, like Wilmoth Group, just as much as the selling agents.
The good news is the “case by case” exceptions are occurring and the selling agents need to know what to look for. HUD is using the term “hard to sell” to identify properties where the former $1250 minimum applies. These will be properties listed for less than $42,000. How to find out if the property you are considering is included? Go to www.HUDHomestore.com and look for the icon at the beginning of this post. It is the “hard to sell” icon and it signifies your ability, as a selling agent, to request a selling agent fee up to $1250!
As I look at this list today in Indiana and Florida, there are quite a few properties with this designation. It does not seem to be rarely used. That is good news for all affected. Of course, we should not be making decisions on selling any property based on the compensation offered. At least now you can adjust your expectations if a buyer is looking at under $42,000 HUD homes.
Top Problems Found In the HUD Contract Review Process
Tuesday, August 30th, 2011Thought we would pass this along. From one of our Marketing and Management Contractors (aka Asset Managers) for HUD purchases. Your bid submitted at HUDHomestore.com has been accepted. Congratulations! You now have two business days to return a correct, fully executed contract package. When you submitted your bid, there was an acknowledgement this contract already existed and had been executed. So, dropping it off in the overnight mail should be easy! Before sending it off, lets take a look at the list of common problems that causes this particular Asset Manager to reject your submittal. By the way, they allow you one rejection. If you still do not get it right on the second submittal, the bid is cancelled and the property goes back on HUDHomestore.com. What can I say but this is an important list for agents to review and make sure they understand in order to properly represent their buyers.
Top Issues with Contract Review
- Line 12 of the HUD contract - buyer forgets to initial the Earnest Money policy acknowledgement (in blue ink also!)
- Name on contract does not match the name on the bid.
- Financing type on the contract should match how it was bid.
- Lead Based Paint Addendum – Broker must initial where required (not check marks!). Buyers must initial every Lead Based Paint addendum. There could be as many as three if buyer is using FHA and stabilization is performed. Again..blue ink!
- Lender Letter does not indicate all the required items: loan type, loan amount, sales price, credit verified and name, title & contact information of loan officer. Plus it can’t be more than 30 days old. This Asset Manager states 99% of the time the lender letter is not in compliance. Signature of the loan officer is no longer required AS LONG AS the letter contains the name, title, and contact info.
- Money orders or other certified funds for EM must be payable to HUD
- Dollar amounts on line 5, 6a, 6b, & 7 do not match the bid.
- Buyer/Broker signs in HUD’s space
- Authorization letter (POA) not included for agent to sign on behalf of broker.
- Not following all instructions on the correction email. Second revisions are coming in with new errors because they did not compare to original contract.
- Contract Addendums missing Buyer initials where asked for.
- Radon Gas and Mold Notice – name of the Marketing and Management Contractor is the name of the Asset Manager.
Also, most Asset Managers will send a sample of a complete package they need with the acceptance email. If they do not, visit their websites forms section and pull the documents posted there. Be sure and use the documents posted by the correct asset managers, because each has a few different forms or presentations of the same addendum information.
As always, when in doubt, contact the Local Listing Broker. This is an important part of our responsibilities..to ensure that your contract is prepared correctly and submitted on time!
