1.
How do you sell HUD Homes?
Selling Paradise Realty now regularly offers
a training session called Successfully Selling HUD Homes. These
training sessions are free and open to all real estate professionals.
You will come away with every thing needed to market yourself
as a HUD home expert.
Selling Paradise Realty is a HUD Local
Listing Broker and we have the information you need.
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2
. Who can sell HUD Homes?
Any licensed real estate broker registered with HUD and has an
active NAID, or an agent employed by a registered broker, may
show and submit bids on behalf of purchasers. Brokers and agents
can check their current NAID Registration Status at the HUDHomestore.
To
obtain a NAID number Register at HUDHomestore. The principal broker
(Selling Broker) must register and receive a NAID. You can find
the required forms, SAMS 1111 Broker Application and SAMS 1111A
Selling Broker Certification, and NEW mailing instructions on
the NAID registration link. Be sure to mail the forms to the correct
address listed for your state’s HUD Homeownership Center.
Click
here to complete the forms.
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3
. How do I submit an offer on a HUD/REO Home?
All bids, on all HUD owned properties
nationwide must be placed at www.HUDHomestore.com.
Only HUD registered brokerages may show, sell, and receive a commission
on a HUD owned property. State real estate contracts and addendums
(this includes FHA Amendatory Clauses & Real Estate Certifications)
may NOT be used or incorporated into any HUD contract. Only HUD
contracts and addendums may be used and should be fully executed
(IN BLUE INK ONLY) and in the possession of the selling agent,
along with proof of cash/prequalification letter and certified
escrow funds, BEFORE the bid is placed on HUD Homestore. Offers
may NOT be faxed or emailed to the Local Listing Brokers. HUD
contract packages can be found www.hudpemco.com, click on the
appropriate package for your buyer. Fill out the form online and
print.
Once you have completed your contract your bid must be placed
online at www.HUDHomestore.com.
Bid results and statistics are not placed on the website. Only
winners are notified via email of their winning bid status. We
are not able to give you status updates on your bids or contract
packages, nor can we disclose how many offers are currently on
the property. Ratified contracts can be expected via email within
7 to 10 business days. Selling brokers that have been asked to
make revisions can expect a slightly longer turn-around timeframe.
To place your bid you must go
to www.HUDHomestore.com.
You must be registered to place a bid. Once you are registered
on the site, locate your property and view the Property Detail
screen, click the “Submit an Offer” button on the
lower right corner of the Property Details screen. Enter the requested
NAID/license information and click “Verify NAID” to
get to the Bid Submission page. Answer the questions according
to the completed contract package to complete the form and click
“Continue.” Review the Bid Summary page, accept the
terms & conditions and click “Confirm This Bid”
to submit. Retain the confirmation number to log back in and track
the status of the bid.
*Print the bid conformation for your records, you will not be
able to access this later*
Placing a Bid on BidSelect
To place a bid on BidSelect you
must go to www.bidselect.com
and creat a Buyer Center Account. Search for the property you
wish to bid on and select the "Submit Offer" button
on the lower right corner of the screen. The status of the property
and whether or not bids are being accepted on the property will
be displayed on the screen. Click
here to watch a video with step by step instructions on setting
up your account and bidding procedures.
Anyone can sign up for a Buyer Center account, from this account
you will be able to do the following:
Track the status of your current
offers or see all of your historical offers (for registered
brokers or agents).
Set up a watchlist to track properties of interest to you or your
clients.
Save searches on properties to save time locating properties of
interest.
Set up preferences to receive email listings of properties and
receive email notifications
about offer status.
Print all contracts pre-populated with your information and the
data you entered during
the offer process (for registered brokers and agents)
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4 . What are the bidder types?
There are five buyer types that are eligible to purchase HUD Homes:
Owner Occupants, Investors, Good Neighbor Next Door (GNND), Eligible
Nonprofit organizations, and Approved Government Entities.
· Owner Occupant buyers are individuals
with a valid Social Security Number (SSN) who have not purchased
a HUD property within the past two years as an owner occupant.
An owner occupant must live in the property as their primary residence
for one year and may not purchase another HUD Home for two years.
Owner Occupants can bid on homes in the exclusive or extended
periods.
· Investor buyers are individuals
with a valid SSN or Employer Identification Number (EIN) who purchase
the property as an investment. Investors can bid on homes in the
extended listing phase. There is no restriction on how many properties
an investor may purchase.
· GNND buyers are qualifying law
enforcement officers, pre-Kindergarten through 12th grade teachers
and firefighters/emergency medical technicians. HUD offers a discount
of 50% from the list price of a home located in revitalization
areas and in return GNND participants must commit to live in the
property for at least 36 months as their sole residence. HUD also
requires that buyers sign a second mortgage and note for the discount
amount. The GNND buyer or spouse may not have owned a property
within the last 12 months, or have participated in the GNND program
before. A GNND buyer must bid 100% of the listing price. GNND
buyers can use any type of financing or cash deal. FHA financing:
a GNND buyer must qualify for the entire purchase price prior
to discount. The buyer can finance into the mortgage all reasonable
and customary closing costs, including prepaids and real estate
commissions. HUD will NOT pay any closing costs or real estate
commissions. GNND participants must submit bids through a real
estate broker licensed to do business in the state where the property
is located. If using FHA financing to purchase the home, GNND
buyers can purchase the home for only $100 down. FHA financing
must be used for the $100 down payment incentive to apply.
· Approved Nonprofit Organizations
can bid on homes in lottery, exclusive, and extended phases provided
the properties are located in approved purchase areas. If the
property is in the lottery phase, the home must be uninsured.
Nonprofits rank below Government Entities in the bid selection
process for the lottery, but above them for exclusive and extended
listings. Nonprofits cannot bid for dollar homes.
· Approved Government Entities can
bid on homes in lottery, exclusive, and extended phases provided
they are in approved purchase areas. If the property is in the
lottery phase, the home must be uninsured. Only Government entities
can bid on Dollar homes.
The Property Details page
will clearly define the type of bids currently being accepted
and when exclusive bidding periods will end. You cannot place
a bid for any other type than what is currently being accepted.
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5
. How do I schedule a showing?
All Showings for Selling Paradise Realty REO properties are scheduled
by calling
877-894-7738. If this is a HUD property you will be asked to supply
your NAID number. For all others you must provide your Agent License
number. Our call center will request your email address so that
we can request your feedback on the property. We appreciate your
taking the time to send us your feedback. REO Sellers need to
know what you think so send us your feedback! Click
here to print a showing instruction sheet.
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6
. Lockboxes and Keys
As an REO Broker we have experienced
problems with disappearing keys, purposefully jammed lockboxes,
and other things that agents will do to allow only themselves
access to come and go from a property while an offer is being
prepared. This makes it impossible for others to gain access with
a lockbox. If you are trying to show one of our properties and
this happens to you, please realize how frustrating this can be.
Please, clients should never be allowed access by providing them
with lockbox codes and stopping other agents from viewing a property
will not accomplish anything. Please don't inconvenience others
by following this practice.
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7
. How do I submit an offer on other Bank-Owned Properties?
The
MLS confidential agent remarks will clearly define how an offer
is to be submitted. All HUD properties must be submitted through
www.HUDHomestore.com, some properties are submitted through
www.bidselect.com.
Others are submitted directly to the listing broker at thesellingteam@comcast.net.
Using the appropriate means to submit your offer will save you
both time and frustration. Please read and follow the instructions
provided in the MLS listing.
Click
here for the Listing and Bidding Procedures for a HUD property.
Please be aware when the seller has not given permission, we do
not have the authority to discuss the existence of other offers.
Standard of Practice 1-15 REALTORS®,
in response to inquiries from buyers or cooperating brokers shall,
with the sellers’ approval, disclose the existence of offers
on the property. Where disclosure is authorized, REALTORS®
shall also disclose, if asked, whether offers were obtained by
the listing licensee, another licensee in the listing firm, or
by a cooperating broker. (Adopted 1/03, Amended 1/09)
As far as
we know we may have offers, we may not. The seller may have accepted
an offer and we may have not received this information. If your
offer has been accepted you will be notifed.
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8
. What do I do if my offer on a HUD home is accepted?
HUD CONTRACT PACKAGES MUST BE SUBMITTED
WITH:
•Proof of Cash AND/OR Pre-Approval Letter
•Certified, earnest deposit funds of $500 ($50,000 or less),
$1,000 ($50,001 or more) payable to HUD
•Contracts must be in BLUE ink.
•PEMCO DAYS TO CLOSE: 45 (CASH AND ALL FINANCED OFFERS WITH
ONE EXCEPTION, 203K OR STREAMLINE CONTRACTS WILL CLOSE IN 60 DAYS)
ALL PACKAGES DUE WITHIN 2 BUSINESS DAYS OF BID AWARD DATE.
Pemco Fillable Contract Package Instructions:
1.) Go to www.HUDPemco.com
2.) Click on "Forms"
3.) Click on "2A"
4.) Click on the appropriate contract package that applies to
your buyer.
5.) Enter all fields as you will enter them in HUD Homestore.
Click "Print".
When filled out completely, mail to:
PEMCO HUD Packages
3525 Piedmont Road Bldg 5 Suite 310
Atlanta, GA 30305
800.881.9260
It's as simple as that! Using the original contract that you filled
out, complete the contract online based on the final offer you
received from HUD. If you have any questions or would like a complimentary
review of your contract please email your complete pdf contract
to thesellingteam@comcast.net.
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9
. How do I fill out a HUD/REO Contract?
Need
help filling out a HUD contract click
here for a step-by-step instructional video. It's well worth
your time! 80% of the contracts submitted have errors and require
corrections that are sent back to the selling agent. This can
cause delays in getting your property closed and is extremely
frustating for both you and your clients. Do it right the first
time! Get your contracts approve the first time around and move
your clients towards a smooth closing. These instructions are
for the final contract page only. All addendums must be filled
out and signed by your buyer along with the contract!
For a complimentary review of your contract please call 239-822-6000.
If
your offer has been accepted from BidSelect a contract package
will be available for you to print from the final Offer Submission
page as well as from your My Buyer Center account.
Click
here to view a sample contract package.
Click
here for a Contract Review Checklist for a Fannie Mae property.
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10.
Earnest Money
Most banks will require a minimum
of $1000 or sometimes 10% for cash offers. All earnest money must
be in the form of a cashiers check – NO EXCEPTIONS. EM may
be forfeited if a transaction does not close due to buyer non-performance.
For
HUD properties:
Certified, earnest deposit funds
of $500 ($50,000 or less), $1,000 ($50,001 or more) payable to
HUD
HUD's Forfeiture and Extention Policy clearly
defines the return or forfeiture of an escrow deposit.
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11.
Proof of Funds
It is strongly recommended that
your offer be submitted with a proof of funds or a preapproval
letter. Corporate sellers will likely favor offers that specifically
show the proposed buyer's financial capacity to complete the purchase
as proposed. The pre-approval should include the amount that the
buyer is qualified for, type of loan, contact information for
the lender, and a current date or no more than 30 days old. Cash
offers should have a proof of funds letter or a copy of a statement
showing funds available in excess of the purchase price. Current
bank statements or recent letters (less than 7 days old) from
a bank representative are acceptable forms.
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12.
Home Inspections
Any inspection requested by the
buyer is intended to be only for buyer's information. Please be
sure that the inspector understands this property is listed and
agreed to be purchased in "as-is" condition. If an inspector/appraiser
is unwilling to turn on pilot lights, main water valve, etc.,
it is the buyer or buyer's agent responsibility to make arrangements
to have them turned on and off again. The Seller will not guarantee
that utilities will be functional for inspection. The Seller won’t
authorize repairs for the purpose of the inspection unless agreed
to in writing.
The seller, or our company, will
not approve any pre-contract inspections. Additional utilities
will not be turned on, de-winterizations will not occur. Radon
tests will not be performed etc. This is the purpose of the inspection
contingency. Assess the property the best you can in the condition
it is in (everybody else will be looking at it the same way).
Negotiate a successful offer and include an inspection contingency.
Then you can complete an inspection and address anything found
under approved conditions in an inspection response.
Neither HUD nor the Local Listing
Broker will arrange or pay for any utility activation. Selling
agents are required to complete and submit Utility Activation
Request Applications, fees, and supporting documentation to the
HUD Field Service Managers for their approval. All utilities must
be in the name of the buyer and/or selling agent for a period
not to exceed 48 business hours. Outstanding utilities fees that
would prohibit activation will not be paid before closing for
the purpose of conducting a home inspection. Rather, the buyer
will be given the option of proceeding with the home inspection
WITHOUT the mechanical systems being functional. Utility activation/requests
cannot be made until the selling agent receives a fully ratified
contract from the HUD asset manager.
Click
here to access the links to FSM Utility Activation forms for
HUD properties.
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13.
How do I get Utilities turned on for my inspection?
Question
12 addresses information on home inspections and how to activate
utilites. Please reference the link above for obtaining forms
if requesting utilities to be activated for an inspeciton on a
HUD property.
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14.
Bank Addendums
All REO properties have addendums.
They will supersede the original state association documents or
any other purchase document. Please make sure your buyers understand
that they are basically negotiating terms and then the Addendum
will become the contract for purchase. Such Addendums are not
available until a transaction has been negotiated. The bank prepares
them once the terms are agreed to. Your buyer will have a very
short time (24-48 hours) to review. It is not a negotiable document.
Yes... that seems unfair but that is the way the game is played.
The addendum will include the agreed to terms, plus language that
will state the property is being sold in "as-is" condition
and some very specific deadlines. If the buyer can't live with
anything they discover in the addendums, then they should tell
you to tell us to cancel the agreement. If we do not hear from
you and receive the executed Addendum, with earnest money, within
the requested time line... we will be required to put the property
back on the market. If your buyer then decides they wish to proceed,
it is very likely the bank will make them renegotiate the transaction.
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15.
Buyer Keys!
Please advise your Buyer to have
a locksmith ready to change all locks immediately after closing.
We do not provide keys. If a key is in the lockbox, it is a master
key coded in such a way that there are probably 500 other homes
it fits into and there are probably many investors and other people
who have this key. IT IS UN-SAFE IF YOUR BUYER DOES NOT IMMEDIATELY
HAVE THE LOCKS CHANGED. LISTING COMPANY AND SELLER WILL NOT BE
HELD RESPONSIBLE FOR UNAUTHORIZED ENTRIES MADE AFTER CLOSING.
Please stress this point to your Buyer.
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16.
How do I Cancel a Contract?
For a HUD contract you can cancel
an offer after it has been submitted, until the bid opening date.
Log in to HUDHomestore.com, click Bidder Functions, and go to
Review your Bids. Click the bid you want to cancel. Click the
Withdraw this Bid button. A summary screen will appear, and you
will again have to click the Withdraw this Bid. The bid is then
withdrawn from consideration by HUD. You will not be able to cancel
an offer after the bid opening date has passed.
Once a contract has been submitted
and you are well into the closing process each asset manager (HUD
or otherwise) has a Contract Release and Earnest Money Disposition
Request Form that must be submitted with supporting documentation
such as a formal lender declination before the contract expiration
date. Submission of the release form and supporting documentation
does not mean that the buyer will receive any portion of the escrow
deposit back. Failure to submit the contract release form with
the proper supporting documentation before the contract expires
may result in automatic forfeiture of the entire escrow deposit
at the asset manager’s discretion.
Click
here for Pemco's HUD Cancelation and Release of Contract Form.
To cancel an offer on BidSelect
Login to your Buyer Center account. Locate the offer and click
the Cancel Offer button. The offer will still be visible to the
Seller, but the status will show as "Offer Cancelled".
This can only be done during the bidding period by the individual
who submitted the offer. To cancel an offer after the bidding
period has ended, please contact the Asset Management company
identified on the offer confirmation.
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17.
What if we can't close on time?
Each HUD asset manager has a contract
extension form that is required a minimum of 5 (business) days
in advance of the contract expiration date. Extensions, at the
discretion of the AM, are awarded in 15 day increments. Contract
extensions must by accompanied by certified extension funds and
a letter from the lender (if obtaining financing) or the buyer
(if paying cash). The submission of an extension request does
not automatically, or in any way obligate, HUD to accept or extend
the contract expiration date. Additionally, the approval of one
extension does not mean blanket approval for any further extensions.
HUD will retain extension fees if the sale fails to close. Fee
extensions will be collected and deposited with the original extension
request. Funds will be mailed back to buyer after closing via
regular mail from the HUD designated closing agent.
Every transaction has a contract
date. If the property does not close by the contract date through
the fault of the buyer/lender, per diem will be assessed on a
daily basis. Please make your buyer and the lender aware of this.
Per Diem clauses are a part of all Addendums required to be executed
as part of the Purchase Agreement. Such per-diem penalties will
be specifically identified in the required Bank Addendum. In general
assume that it will be charged if the closing is delayed beyond
the agreed contract date due to fault on the buyers, agents, lender
or anyone on the buyer’s side of the transaction.
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18.
Will this home qualify for FHA financing?
We at the Selling Paradise Realty
are accutely aware of the current climate in the mortgage industry
and that FHA loans are the most competive in rates and availibility.
However all of our properties are "Bank owned", being
sold "As Is" and most likely will not pass FHA inspections/appraisals.
In additions to this, the Seller/Bank will not do the work for
the property to pass inspections/appraisals. When represienting
a Buyer who wants to purchase an REO w/FHA financing, you need
to make them aware of the potential fall out due to inspection/appraisal
issues and what this could potentially cost them (inspections
and appraisal fees). This is your fiduciary responsibility as
a Buyer's agent. A possible alternative would be FHA/203k. This
would entail that you work with the lender upfront to have the
FHA inspector/appraiser view the property before submitting an
offer to see if the property could be financed by this method.
An offer could then be written with 203k financing and extra time
could be requested for repairs estimates and a projected closing
date.
HUD properties at the time of
list provide the determination of whether or not they are FHA
insurable.
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19.
Are there other offers on the property?
We do not provide this information
at the request of our Sellers. We are not representing our Seller’s
interest to take any action that will discourage offers. Our job
as the listing agent is to obtain as many offers as possible for
our clients. Answering this question may encourage somebody not
to submit an offer. Please submit offers until the status changes
in your MLS.
There are some simple things to
note. Unless we have noted a property as Pending in the MLS system,
you still have an opportunity to submit an offer. Just because
we have an offer it does not mean the offer is good or it will
be responded to any time in the near future. All offers are submitted
to the seller.
HUD has instructed us not to put
a property pending until a contract is fully executed. However
once a property has a preliminary offer the property is removed
from HUDHomestore. We understand the frustration that his may
cause as no further bids can be accepted during this preliminary
phase. To try and eliminate some of the confusion we move these
properties to the status of active contingent and then pending
once the contract is ratified. Should the property become available
the status will change to active. At Selling Paradise Realty we
do our best to update a property as soon as we have been notified
of its current status.
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20.
Why is the property not showing up on HUDHomestore?
The
property is currently unavailable for bid. Either because it is
in preliminary offer or a contract has been accepted.
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21.
What if I made a mistake on my buyers legal and correct informaiton?
Revisions to the contract can
cause significant delays. Please ensure that you have your buyer’s
full, legal name(s), correct social security number(s), and type
of financing. Erroneous information can result in your buyer having
to produce two (government issued) forms of identification or
cancellation of bid.
Pemco offers the following forms
to correct a contract:
Add
or remove a Purchaser
Corrections
to Buyers Name/Address/Vesting
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22.
What are the usual and customery seller's closing costs?
HUD does NOT pay any closing costs
other than the real estate commissions, recording of the deed,
and the HUD Closing Agent fee. Seller’s maximum contribution
towards all closing costs is 3%. Any unused portion of requested
closing cost assistance will NOT be credited or given back to
the buyer upon closing.
Click
here to view HUD's Closing Costs Form - H2005-12
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23.
Commission
At the discretion of the corporate
seller, the buyers agent commission (BAC) may be paid on the net
sales price, not the gross. New enforcement of Realtor Association
rules requires us to offer a minimum BAC. You will have the option
of choosing to instead receive what the bank pays under their
specific terms. The BAC offered on the MLS listing sheet is nothing
more than an estimate of what will be paid. The cooperative commission
offered may be accepted by a selling agent, or you may choose
to accept what the bank offers. In general the alternative buyer
agent coop is calculated on the net purchase price and will not
be paid if buyer is also the selling broker. It averages around
2-3%. We do not know the exact amount until HUD's are prepared.
At this time, HUD is offering a 3% commission OR a flat fee of
$1,250, whichever is greater, to the listing broker and the selling
broker on all HUD owned properties. There is currently a selling
bonus offered of $500 ($25k-75k), $750 (75,001 - 150k), $1000
(150k +). This bonus can end at any time please check with the
to insure this bonus is still available. The commission and/or
flat fee may change at any time at HUD’s discretion. While
the selling broker may reduce their commission, the listing broker’s
commission is non-modifiable.
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24.
What are (IE) repair escrows on FHA Insurable properties?
If a property is offered as FHA
insurable with a repair escrow, the amount of that escrow will
be added to the buyer’s mortgage. It is NOT a gift or seller
credit at closing. The buyer may not pay it in cash at closing,
nor may it be eliminated or reduced. It can only be increased
up to $5,000 (including a 10% reserve) by a lender-ordered FHA
compliance/mechanical systems inspection. Buyer must provide proof
of loan qualification for the purchase price and the repair escrow
amount.
/
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25.
Does my buyer have to use HUD's FHA appraisal?
If the buyer is financing the
property with a FHA insured mortgage, a valid contract must be
ratified within 120 days of the appraisal effective date, or the
buyer must pay for a new appraisal or an appraisal update. However,
be clear, a second appraisal may NOT be ordered simply to support
a purchase price that is higher than the value of the current
appraisal. A second appraisal can only be ordered by the Direct
Endorsement (DE) underwriter if there are material deficiencies
with the current appraisal or the current FHA appraisal will not
meet HUD’s 120 day appraisal effective date.
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26.
What if my buyer bids over the FHA appraisal?
When
obtaining FHA financing, any purchase amount over the current,
FHA appraised value must be included in the cash to close due
from buyer upon closing. It may not be financed into the loan.
Further, buyer must submit proof of cash for the entire amount
offered over the FHA appraised value with their original sales
contract package.
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27.
Does HUD provide surveys, inspections, and HOA certificates?
HUD does not have any previous
surveys nor do they provide a current survey. One FHA appraisal,
termite inspection, and lead-based paint stabilization estimate
will be provided to owner-occupant, FHA purchaser’s only.
Surveys, well, septic, structural, and mechanical inspections/certifications;
lead-based paint remediation over $4,000; and HOA application/fees/certificates
are at the sole expense of the buyer.
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28.
Can repairs or remediation be done before closing?
At
no time will any repairs, placement of personal possessions, or
occupation of the property before closing be allowed. Selling
agents are required to accompany buyers, inspectors, appraisers,
etc. at every visit to the property, sign in on the sign in sheet,
and ensure that the property is properly secured when they leave.
Further, lender required repairs and/or remediation may NOT be
performed before closing; nor will HUD allow a seller credit for,
or remediate, lender required repairs.
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29.
Who are the HUD designated closing agents and what are their closing
policies?
HUD retains designated closing
agents for all closings on HUD owned properties. All closings,
even if your buyer elects to hire a 3rd party closing agent, must
be coordinated through the HUD closing agent following their closing
guidelines. HUD does not allow mail-away closings. Your buyer
may elect a power of attorney but must submit the POA to the HUD
designated closing agent, and lender if obtaining financing, for
their approval. HUD requires 7 (business) days advance notice
of a closing. This includes the receipt of closing instructions
if your buyer is obtaining financing. Closing funds must be in
the form of a bank wire that must be in the HUD designated closing
agent’s bank account at or before closing. Certified funds
on the day of closing are not permitted. If buyers elect to do
a final walk-through, their realtor must accompany them through
the property at least 6 business days in advance of scheduled
closing date.
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30.
Does HUD allow contract extesions?
Each
HUD asset manager has a contract extension form that is required
a minimum of 5 (business) days in advance of the contract expiration
date. Extensions, at the discretion of the AM, are awarded in
15 day increments. Contract extensions must by accompanied by
certified extension funds and a letter from the lender (if obtaining
financing) or the buyer (if paying cash). The submission of an
extension request does not automatically, or in any way obligate,
HUD to accept or extend the contract expiration date. Additionally,
the approval of one extension does not mean blanket approval for
any further extensions. HUD will retain extension fees if the
sale fails to close. Free extensions will be collected and deposited
with the original extension request. Funds will be mailed back
to buyer after closing via regular mail from the HUD designated
closing agent.
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31. What is HUD's exlcusive bidding period?
The exclusive listing period is
reserved for Owner Occupant bidders, qualified nonprofit organizations
and government entities and may vary depending on the property’s
insurability.
Exclusive Listing Period –
IN and IE
· There is a 30 day exclusive
listing period for owner occupants for IN (insured) and IE (insured
with escrow) properties. All bids received in the first 10 days
are treated as having been received simultaneously and if no winning
bid is received by the 10th day, the bids are reviewed daily for
the remainder of the exclusive listing period (up to 20 days)
for owner occupant purchasers only.
Exclusive Listing Period - UI
· There is 5 day exclusive
listing period for owner occupants for UI (uninsured) properties.
All bids received in the first 5 days are treated as having been
received simultaneously and if no winning bid is received by the
5th day, the property is made available to all bidders.
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32.
What is HUD's extended Listing Period?
· Properties that are insurable
(I) or insurable with escrow (IE) that were not sold in the Exclusive
Listing Period are open to ALL bidders in the Extended Listing
Period, starting on the 31st day. All bids received on the same
day are treated as having been received simultaneously and are
opened daily at the end of each business day.
· Properties that are uninsured
(UI) that were not sold in the Exclusive Listing Period are open
to ALL bidders in the Extended Listing Period, starting on the
6th day. All bids received on the same day are treated as having
been received simultaneously.
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33.
What is "I", "IE", "UI"?
These are listing codes, finance
types that describe the FHA insurability of a property.
“IN” Insurable
203(b) Regular FHA Loan
This means the property meets FHA 203(b) financing requirements;
no obvious repairs necessary to insure an FHA loan to buyer.
“IE" Insurable with Repair Escrow
203(b) - Repair Escrow
This means the property is eligible for a 203(b) FHA loan and
that necessary repairs do not exceed $5,000.
“UI” Uninsured
This means the property requires extensive repairs exceeding $5,000.
These properties are eligible for an FHA 203(k) mortgage if the
required repairs and or the improvements are completed within
90-days of the closing.
“203K” Streamlined 203(k)
Limited Repair Program
FHA's Streamlined 203(k) program
permits homebuyers to finance up to an additional $35,000 into
their mortgage to improve or upgrade their home before move-in.
With this new product, homebuyers can quickly and easily tap into
cash to pay for property repairs or improvements, such as those
identified by a home inspector or FHA appraiser.
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34.
What are the different types of bid status?
Open: The bid has been submitted and is
awaiting review by the Asset Manager. The bidder can modify or
withdraw their bid.
Accepted: The bid has been accepted by
the Asset Manager.
Withdrawn: The purchaser or their bidder
has withdrawn the bid, and it is no longer under consideration
by HUD.
Cancelled: The bid has been cancelled.
Under Review: The bid has been
opened and is being reviewed by the Asset Manager.
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35.
What are Back-up offers?
In the event that there is more
than one acceptable bid received, PEMCO will award to the highest
net bidder and hold back-up offers. Back-up bidders will be notified
by email at the time of the bid award. The completed contract
package should be completed and held by the agent until further
notification. If the awarded bid cancels within 15 days (and the
contract has not been ratified by HUD) the back-up offer will
be contacted by email and advised to send the necessary documentation,
within 2 business days of acceptance.
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36.
What is a Counter Offer?
If all received bids are unacceptable,
the AM may counteroffer by providing all bidders with an identical
minimum acceptable bid allowing them to counteroffer with a cut-off
date for submitting bids. The highest acceptable net counter-offered
bid received within the specified time will be the winner. If
none of the counteroffers meet the requirements, the bids will
be rejected and be listed under the extending listing period.
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37.
How is the repair escrow amount determined?
The FHA appraiser lists the estimated
cost of repairs needed to bring the property up to minimum FHA
standards. This amount is then multiplied by 110% and this amount
is listed as the repair escrow amount. Example: if repairs total
$1,000 x 110% = $1,100. The Repair Escrow amount will be listed
at $1,100. Repair escrow ONLY applies to FHA financing –
not cash or conventional transactions.
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38.
How do I determine the mortgage amount when there is a repair
escrow?
The DE Underwriter (FHA Direct
Endorsement Underwriter) will determine the final 203(b) mortgage
amount. The DE Underwriter will take into account the repair escrow
amount to determine the FHA loan amount. The DE underwriter will
determine this amount. Regardless of whether or not a repair escrow
will be used in the purchase of a home, the lines on the Sales
Contract that request the down payment amount and the secured
mortgage amount should be filled in "TBD" (To Be Determined).
The line associated with the length of the loan should also be
filled in TBD. Please remember that the repair escrow amount needs
to be filled in only if the buyer is using 203(b) repair escrow
financing.
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39.
What is a Lottery?
Properties that are eligible under
HUD Special Programs are first offered to GNND and HUD approved
Nonprofits and Government entities by Lottery. Eligible properties
located in HUD designated Revitalization Areas and uninsurable
properties located in approved purchase areas of an approved nonprofit
or government entity are listed for sale for a period of seven
(7) calendar days (the Lottery Period).
· Insured Single Unit Properties
within a Revitalization Area - Only bids from GNND participants
may be accepted.
· Uninsured Single Unit
Properties within a Revitalization Area - Only bids from GNND
participants, qualified nonprofit organizations and government
entities whose approved purchase area covers the location of the
property, may be accepted. In the event of competing bids from
the aforementioned groups, the order of preference is as follows:
(1) potential GNND Program participants; (2) government entities;
(3) qualified nonprofit organizations.
· Uninsured Multi-unit
properties within a Revitalization Area - Only bids from approved
nonprofit organizations and government entities whose approved
purchase area covers the location of the property may be accepted.
· Uninsured Properties
in a non-Revitalization Area - Only bids from approved nonprofit
organizations and government entities whose approved purchase
area covers the location of the property may be accepted.
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40.
Can you tell me more about this property?
What
you see is what you get. There are no previous inspections or
answers as to why a property has either not sold or come back
on the market. All properties are sold as is. We highly recommend
that you encourage your buyer to obtain a home inspection. However
please make them completely aware that no repairs will come from
their inspection it is for informational purposes only.
Hudhomestore provides a PCR or property condition report, available
on the property detail page under the addendum tab, that will
give you some basic information that was found when the property
was inspected. There is no more detailed information than this
available, your buyer will have to obtain a home inspection to
find more conclusive data about the condition of the property.
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