General HUD Home Information
WHAT DO I NEED TO KNOW ABOUT BIDDING ON HUD HOMES?
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’ website.
Offers may NOT be faxed or emailed to the Neighborhood Listing Brokers. Bid results and statistics are not placed on the website until a winning bidder’s contract has been fully ratified by the seller. 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, or if, 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.
HOW DO I ACCESS HUD PROPERTIES?
All HUD owned properties should be vacant and on an electronic and/or combination lockbox. There is no such thing as a single “HUD Key” any longer. While Neighborhood Listing Brokers may verify your current and active SAMS NAID status, HUD does not require that you belong to a REALTOR® and/or MLS association.
WHAT IS THE REQUIRED ESCROW DEPOSIT ON HUD PROPERTIES?
All BIDS on HUD owned properties require a CERTIFIED deposit of $500 ($50,000 or less) or $1,000 ($50,001 or more) in the form of a cashier’s check or money order.
WHAT ARE USUAL AND CUSTOMARY SELLER’S CLOSING COSTS ON HUD PROPERTIES?
HUD does NOT pay any closing costs other than the real estate commissions, recording of the deed. 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.
WHAT KIND OF COMMISSION DOES HUD PAY?
At this time, HUD is offering a 3% commission; OR, in some cases a minimum commission to the listing broker and the selling broker on all HUD owned properties. HUD may occasionally offer bonuses at their discretion. You should always check the “addendums” link on HUD’s website to keep abreast of current incentives. The commission, bonus, incentive, and/or minimum commission 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.
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.
CAN REPAIRS AND/OR REMEDIATION BE DONE BY HUD OR THE BUYER 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.
DOES HUD PAY FOR AND/OR COORDINATE UTILITY ACTIVATION FOR INSPECTIONS?
Neither HUD nor the Neighborhood 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.
WHAT IF I MAKE A MISTAKE ON MY BUYER’S LEGAL INFORMATION ON THE CONTRACT?
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.
I JUST GOT A P260-HUD-Bid Acceptance Notice Email from do-not-reply@HUDHomestore.com
Receipt of a winning bid notification via email does NOT mean that you have an “accepted” offer or contract. Rather, your bid has been provisionally accepted subject to the receipt and approval of original required documents as specified by each individual HUD asset manager. Contracts not received by the due date or packages containing errors and/or omissions may be deemed “non-responsive”, canceled, and the property placed back on the market or awarded to a back-up offer.
DOES HUD ALLOW CONTRACT EXTENSIONS OR CHARGE PER DIEM FEES?
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.
WHAT IF MY BUYER WANTS OR NEEDS TO CANCEL?
Each HUD asset manager 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 HUD asset manager’s discretion.
HOW DOES THE BUYER GET KEYS TO THE PROPERTY AFTER CLOSING?
Five days before the closing, Neighborhood Listing Brokers perform a Ready to Close inspection that includes the removal of all signs, papers, and lockboxes. You and your buyer are responsible for coordinating the replacement and/or rekeying of all locks on the property on the day of closing. Neighborhood Listing Brokers cannot give buyers HUD keys. Please plan accordingly.
MY BUYER HAS CLOSED ON A HUD PROPERTY AND THEIR PROPERTY TAXES HAVE GONE UP, WHY?
Buyers should not rely on HUD’s current property taxes as the amount of property taxes that the buyer may be obligated to pay in the year subsequent to purchase. A change of ownership or property improvements triggers reassessment of the property that could result in higher property taxes and possible special assessments. If your buyer has any questions concerning valuation or special assessments, they should contact the county property appraiser’s office for additional information.
This page is only a general overview of HUD’s policies and procedures and it should not be considered to be all inclusive or absolute.
A COMPLIMENTARY review of all HUD contract packages is offered 7 days a week.
Simply email your fully executed contract package to ReviewMyHUDPackage@100REO.com
All Rights Reserved 2012. 100% Real Estate, Inc. Information Contained Herein is NOT Warranted or Guaranteed.