Sunday, February 20, 2011

Now What???

I cant count how many times that I have gotten a call from a buyer or selling agent with the following statement "Hey, I won the bid so now what?". HUD properties are homes owned by the national government. So dont think our lil'ol Georgia GAR contract is acceptable. It's not. HUD has their own sales contracts, addendums and method of doing things. Selling agents need to know that right off the bat. You can not bully your way through the system. That will not get you anywhere. Remember the saying "you catch more flies with honey than you do with vinegar". Everyone at the asset management, field service management, listing broker company and closing agents offices are working like crazy to get a huge flow of properties through the system. Patience is the key to success. I know the feeling of "my deal is the most important deal to me" and I sympathize. There are hundreds of other deals out there that is most important to someone else too.

Here's the process:

Once you win a bid, the selling agent has 48 hours to get the signed contract, addendum, prequalification letter and earnest money to the Asset Manager. Then the asset manager has to review the package for errors. Just so you know, local listing brokers are more than willing to review your contract package before you send it off. This would prevent delays once it gets to the Asset Manager and speed up the amount of time it takes to get the contract package back. If there are errors in the package, the selling broker is notified by email or fax and given 24 hours to correct the errors. If the error does not get corrected, your contract will not be signed. Once the package is complete with no errors, it is signed off on by the Asset Manager and dated. The package is then emailed back to the selling broker. It is at this point that a selling broker should notify the buyer that the contract is binding and forward the contract package email to the buyer for their records, as well as to the lender. The Asset Manager will send a copy of the contract package to HUD's designated closing attorney so that they can finalize title work on the property and clear outstanding Homeowners association dues etc.

Once you have your binding contract package, you can send in a request for permission to activate utilities so that you can do a home inspection. During winter months, there is a fee associated with this request so that the Field Service Manager can re-winterize the property after your inspection is complete. Activating utilities for inspections is the buyers responsibility. HUD does not do this for you. You may keep the utilities on for three days to conduct inspections and then they have to be shut back off and notify the Field Service Manager that this has been done. If all is satisfactory with the inspection, then your lender can begin getting the loan paperwork in order for closing.

Once you have a clear to close from the lender, the selling agent can contact the closing attorney and schedule the closing. You must schedule and have the lender send in the package by five days ahead of the desired closing date. The reason behind this is the listing broker will be notified of the pending closing and will have to reinspect the property for condition compared to condition at contract. The closing attorney will have to prepare closing documents and send them to HUD for review and approval. Once everything is complete, the selling agent will be send a preliminary settlement statement for your closing.

On closing day, the buyer will need to bring their drivers license and a certified check payable to HUD for any money due from the buyer at closing. The documents will all be signed and the property will transfer to the new buyer. HUD does not provide keys to the property. The selling agent will open the property after closing and remove the padlocks on garage doors and crawl spaces. The buyer will need to install new locks for their home.

I hope I was able to answer most questions about "NOW WHAT?" but if you still have a question, feel free to call. : )