How to Sell HUD Homes

How to Sell HUD Homes

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17319 US 281 N Ste. 206San Antonio, TX 78232

Register

Visit www.HUDHomeStore.comHelp desk: 866-777-2034

*Be sure to have your NAID# to register*Your broker MUST register first.

Where to find property

•HUDPemco.com▫Auction properties only

•HomeTelosFirst.com▫All HUD homes

•HUDHomeStore.com ▫All HUD homes

HUD Programs

•Good neighbor next door▫Eligible buyers: Law enforcement officers,

pre-Kindergarten through 12th grade teachers and firefighters/emergency medical technicians.

▫Eligible areas: HUD deemed revitalization areas.

▫HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home. Providing that that property is their sole residence for 36 months.

FHA 203B and 203K Loans• I, IE and U

▫I = Insurable by FHA (acc. to HUD)▫IE = Insurable w/ Escrow by FHA (acc. To HUD)▫U = Uninsurable by FHA (acc. to HUD)

•Repair Escrow▫Must be $5,000 or less to be considered an IE

property▫Additional cash needed from buyer to put into

an escrow account for the repairs listed by HUD.

Owner Occupants Vs. Investors•Must be correct when a bid is submitted –

cannot be changed later on. •Owners must live in the home for a minimum

of 12 months. •If you find out that the owner will not occupy

the property (or that the owner is an investor) you must resubmit the bid to reflect that.

•Investors cannot submit offers until a property has been on the market for 15 days, unless it is classified Uninsurable.

Repairs

•HUD will not make any repairs and no repairs can be made to the property until AFTER closing.

Earnest Money Policies•Home Telos and PEMCO

▫Must be certified funds (no cash, ,personal checks or credit cards)

▫HomeTelos: Must be made payable to HUD▫PEMCO: Must be made payable to HUD or

buyers name.▫Must be submitted with the contract (no

copies)▫Properties below $50,000 = $500▫Properties $50,001 and above = $1,000▫PEMCO: Vacant lots = 50% of the list price

“Sealed” Bids and Bidding Deadlines

• I or IE homes are only open to owner occupants for the first 30 days.

• Any home that is either I or IE is put in the “sealed” bidding process for the first 10 days of its market life.

• Sealed bidding is only open to owner occupants; on the 10th day HUD will make a decision on bids submitted during this timeframe.

• If no acceptable bids are submitted, the property goes on a daily bid status until something is accepted.

• U homes = only open to owner occupants for the first five days.

• After a price reduction, only open to owner occupants for the first 5 days.

HUD’s “Counter-Offer”

•Not a traditional counter offer•Minimum net to HUD•Commission: minimum net / .94 (for 6%

total commission – amount can be lowered to 3% if you do not want full commission as a buyer’s agent).

Closing Costs and Back Up Offers•HUD does not allow more than 3% toward

closing costs. •HUD will pay 1% title policy, reimbursed

after closing (this is in addition to the 3%)•HUD’s “Back-up Offer”

▫Option when you submit your bid. ▫If the first accepted bid falls through, HUD

goes to the next person in line – that person is considered the back up.

Appraisals

•Appraisals can only be completed by FHA appraisers

•The appraisal can be used if the buyer decides to go FHA

(HUD has appraisals done every 180 days, but appraisals are only good for 120 days – make sure it’s acceptable before using it.)

Average Time to Close

•HomeTelos▫Cash = 30 days▫Financing = 45 days

•PEMCO▫Cash or financing = 45 days

HUD’S Extension Policies•For each day past closing the cost to the buyer

is $10 - $25 per day, billed 15 days at a time. •PEMCO: If the delay is not the buyer’s fault,

the fee is waived. •HomeTelos: If the delay is not the buyer’s

fault, the fee is still required but will be reimbursed on the closing statement.

•Only two extensions are allowed for lender/buyer delays.

•No limit on extensions for HUD delays.

Submitting a Bid

•Log on to HUDHomeStore.com•Type in the property case number to

search•Click on the property case number to take

you to the details page•Click “Submit an Offer”•Follow the directions on the page

Reviewing a Bid

•Login at www.HUDHomeStore.com•Click on “Bidder Functions” at the top

under your name. •Type in your Confirmation # and click

“search”•“Bid Status” will have the status of your

bid (hover over the abbreviation for description)

Cancelling a Bid

•Once your bid is accepted, don’t send anything in.

•After your contract is accepted, contact HUD to get the correct forms.

•Owner occupants have a chance to get earnest money back; investors do not.

After the Bid is Accepted• PEMCO

▫ www.HUDPemco.com/forms/1d2d_forms - all forms for region 2D can be found here.

• HomeTelos’ fillable contract package▫ www.HomeTelosFirst.com – register here separately.

• You have 48 hours to get your contract into HUD▫ Must e overnighted (make sure it is guaranteed delivery) ▫ Must be in HUD’s office by 3PM on the second day▫ Package = sales contract with all related addenda, pre-

approval letters/proof of funds and earnest money▫ Sales contract must be signed in BLUE ink only – no cross

outs or white out▫ HUD sends an executed copy via email.

Inspections

•Any buyer can have inspections done, but only owner occupants can get their earnest money back from the results of an inspection

•Utilities can be turned on in the buyer’s name after the activation request form has been submitted and accepted – some homes cannot have certain utilities turned on.

HomeTelos Contact Info

•Address: HomeTelos5040 Addison Circle #300

Addison, TX 75001

Phone number: 1-866-971-2212

Website: www.HomeTelosFirst.com

PEMCO’S Contact Information

Address: PEMCO, Ltd. 4500 Cherry Creed South Drive,

Ste. 410 Glendale, CO 80246-1531

Phone: 1-877-772-8880

Website: www.HUDPemco.com

THANK YOU!

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