Kim Novak
SFR, CDPE, Broker/Owner, RealtorĀ®







FOR MORE INFORMATION ON PURCHASING A HUD PROPERTY VISIT:


www.hudhomestore.com

and

www.sageacq.com



You can also read our informative guide below for general FAQs for consumers and fellow real estate agents. This is taken directly from HUD Home Stores FAQs. If you have further questions, please contact our office and be sure to look for future training programs on how to buy HUD Homes held regularly at our office. 


GENRAL INFORMATION ON PURCHASING A HUD PROPERTY


 HUD Home Store Frequently Asked Questions (FAQs): Consumers and the General Public

1. What is HUD? The U.S. Department of Housing and Urban Development. Please visit www.HUD.gov for additional information.

2. Do I need a realtor to place a bid for me? Yes, please contact a broker who is registered to bid with HUD.

3. How do I find a property to bid on? Log onto www.hudhomestore.com to search for available HUD properties.

4. How can I obtain financing for my property? Please contact a lender or mortgage broker

5. Do owner-occupants have a priority in bidding? Yes, there is an initial owner-occupant period set aside at the beginning of the bid process.

6. What is the Good Neighbor Next Door (GNND) program? The good neighbor next door program allows teachers, police officers, fire fighters and EMS personnel to purchase HUD properties that are located in a revitalization area for a 50% discount if they live in the property for 36 months. More information is available online: About Good Neighbor Next Door

7. What are my financing options? You can use FHA or conventional financing to purchase a HUD home. You may also purchase a property with cash.

8. How can I locate a home in a particular area (e.g. by zip code or state)? You may conduct a search by visiting www.hudhomestore.com.

9. What is a field service manager? The Field Service Manager (FSM) is the HUD contractor responsible for property maintenance and preservation services such as: inspecting the property, securing the property, performing cosmetic enhancements/ repairs, and providing ongoing maintenance.

10. What is an asset manager? The HUD contractor responsible for marketing and selling HUD-owned properties.

11. I would like to report a problem with a HUD home in my neighborhood. Who do I contact? Please contact the field service manager or the asset manager assigned to the property. You can find the asset manager by visiting www.hudhomestore.com and searching for the property by street address.

12. I am an investor. When can I bid on a HUD property? During the exclusive listing period, bids may be submitted by Owner Occupants. At the conclusion of this exclusive listing priority period, all general public bids will be accepted.

13. I am scheduled for closing and no one has contacted me. Who can answer my last minute questions? Please contact the asset manager for the property being purchased.

14. Can I have the property reappraised and lower the price of the home? In accordance with Mortgagee Letter 2010-08, a second appraisal may not be ordered simply to support a purchase price that is higher than the value on the current appraisal. A second appraisal can only be ordered to support a higher sales price if there are material deficiencies with the current appraisal. In such an instance, the Direct Endorsement underwriter is responsible for documenting and determining that material deficiencies exist with respect to the current appraisal.

  15. Can a buyer elect to use his or her own closing agent? The purchaser can elect to choose any closing agent. However, if the purchaser elects not to use HUD’s closing agent to perform the closing, HUD will not pay for the closing agent to conduct the closing.

16. If I don’t like the home that I chose, can I decline the acceptance? The purchase of the property may be declined at any time, but may be subject to earnest money forfeiture.

17. What is the earnest money held for, and can I get it back? Earnest Money is a deposit towards the purchase of real estate or publicly tendered government contract made by a buyer or registered contractor to demonstrate that he/she is serious about wanting to complete the purchase.

If the seller accepts the offer, the earnest money is held in escrow by the real estate broker or by a settlement or title company until closing and is then applied to the buyer's portion of the remaining costs. If the offer is rejected, the earnest money is usually returned, since no binding contract has been entered into. If the buyer retracts the offer or does not fulfill its obligations under the contract, the earnest money is forfeited.

18. When can I complete a home inspection on the property? All purchasers are strongly encouraged to perform a walk through inspection at or near the date of your contract acceptance and, again, immediately PRIOR to closing. If a purchaser discovers a property condition that did not exist at the time of sale they must immediately notify HUD's property manager of the damage. The purchaser or agent should complete the Property Damage Report and fax it to the appropriate fax number listed on the form. Reporting the damage does not guarantee the correction of the problem that has been discovered. The lack of written documentation describing property condition at contract acceptance, however, will preclude consideration for repairs or price adjustments in the event of subsequent damage.

Each case will be looked at independently and a determination will be made as to whether the damage will be repaired (or not repaired) or, under some circumstances, credits given at closing. The buyer assumes full responsibility for the property and its condition on the date of closing. HUD assumes no responsibility and will make no settlement for damages reported to HUD after the close of escrow.

19. Can I make repairs to the property if needed prior to purchase? HUD properties are sold as-is with no warranty. No repairs should be performed on a property until after the new owner has taken possession of the property.

20. Does HUD give money for repairs to the property? No. However, a home buyer may wish to utilize an FHA 203K streamline loan to finance repairs on the property.

21. How much money do I have to put down on a home? The answer depends on the type of financing being used. For FHA financed properties, the down payment is 3 1/2 percent (3.5%) of the sales price.

 

 

 HUD Home Store Frequently Asked Questions (FAQs): Real Estate Agents


1. How do I bid on a property? To submit a bid go to www.HUDHomestore.com, search properties, when you find a property you would like to place a bid on, click the HUD Registered Bidder tab in the lower right hand corner and follow the instructions.

2. How do I access a HUD Home for sale? Contact the Listing Broker to schedule a showing appointment.

3. What is a NAID number? A name and address identification (NAID) number is used by HUD to track the payee of HUD funds.

4. How do I obtain a NAID number? Submit a SAMS 1111 form which can be found on www.HUDHomestore.com under the NAID Registration link.

5. How do I register my real estate brokerage firm to bid on HUD properties? The necessary forms and application information are available the on www.HUDHomestore.com.

6. What is a Field Service Manager? The Field Service Manager (FSM) is the HUD contractor responsible for property maintenance and preservation services such as: inspecting the property, securing the property, performing cosmetic enhancements/ repairs, and providing ongoing maintenance.

7. What is an Asset Manager? The Asset Manager (AM) is the HUD contractor responsible for marketing and managing HUD-owned properties.

8. How will I know who the Asset Manager is for a particular property? The Asset Manager for each property is identified in the property listing on www.HUDHomestore.com.

9. How much commission compensation will I receive? The selling agent and the listing agent may receive up to 3% commission based on the sales price of the property.

10. How do I notify HUD of a safety hazard on a property? Please contact the Field Service Manager, the Asset Manager or the Listing Broker for the property. The contact information for the Field Service Manager, Asset Manager, or Listing Broker may be located by visiting www.HUDHomestore.com and searching for the property by street address. There is also a Notice posted on each HUD home that provides a telephone number to call regarding issues with the property; usually this is a toll-free number.

11. How can I locate a home in a particular area (e.g. by zip code or state)? You may conduct a search by visiting www.HUDHomestore.com.

12. Do owner-occupants have a priority in bidding? Yes, there is an initial owner-occupant period set aside at the beginning of the bid process.

13. What is the Good Neighbor Next Door (GNND) program? The good neighbor next door program allows teachers, police officers, fire fighters and EMS personnel to purchase HUD properties that are located in a revitalization area for a 50% discount if they live in the property for 36 months. More information is available online: About Good Neighbor Next Door

14. Can I have the property reappraised and lower the price of the home? In accordance with Mortgagee Letter 2010-08, a second appraisal may not be ordered simply to support a purchase price that is higher than the value on the current appraisal. A second appraisal can only be ordered to support a higher sales price if there are material deficiencies with the current appraisal. In such an instance, the Direct Endorsement underwriter is responsible for documenting and determining that material deficiencies exist with respect to the current appraisal. The property price cannot be lowered, but there are provisions in ML 2010-08 to support a higher price on a second appraisal as outlined above.

15. When can the buyer complete a professional home inspection on the property? After a contract is accepted and signed by HUD, the buyer has a 15 daytime frame to complete a professional home inspection to determine if there are any substantial property deficiencies not disclosed to the buyer through the Property Condition Report. The buyer is also strongly encouraged to do a Pre-Closing inspection as close as possible to the day of closing to determine if the property is in the same condition as it was when it went under contract. Once a property is closed, HUD will not make any settlement for damages or repairs.