BUYER SELECT CLOSING AGENT FOR HUD

YAY!   Finally, the buyer can choose their own closing attorney on HUD transactions without having to go through all the rigmarole that we have been put through when attempting a 3rd party closing through the HUD Designated Closing Attorney.    The process has already begun and here's what you need to know as a buyer or selling agent to make your HUD transaction smooth.  

1.  Closing agents (attorney's) must register for a Closing Agent ID # through HUD.  The process to do this is as simple as being the closing attorney on a HUD contract.   The closing attorney will need to provide a copy of their $1 Mill E/O Insurance and a copy of their state Bar License to the selling agent to include with the contract package.   NOTE:  This will only have to be done once.   HUD will issue a BSCA ID# to a firm after receiving their E/O ins and License and from that point forward, you will only need that ID# on the contract package. 

2.  Buyers and their agents will be responsible for choosing competent attorney/Closers to get the closing done prior to contract expiration date.  Extensions will not be granted due to Attorney delays.  Be clear to your buyer and to their attorney that HUD works on deadlines and will not compromise those deadlines to accommodate them.   (ex: HOA and other bill payments must be requested 10 days ahead of closing,  HUD-1 Settlement statements have to be sent to the Asset Manager for approval 5 days before closing for seller approval,  If no clear title, HUD will not reimburse the cost of the title exam)

3.  Without a designated closing agent, there will be some changes to the handling of money associated with HUD transactions.   Each Asset Manager has their own procedure for Earnest money so pay close attention to who the AM is on each deal!
        PEMCO - E/M payable to CLOSING ATTORNEY but delivered to LISTING AGENT
        HOME TELOS-  E/M payable to CLOSING ATTORNEY but delivered to LISTING AGENT
        OFORI-  E/M payable to the LISTING AGENT and delivered to LISTING AGENT

BE SURE THE E/M IS PAYABLE TO THE *** LEGAL, REGISTERED NAME*** OF THE HOLDER AND DELIVERED TO THE CORRECT LISTING COMPANY!!!


This process is in effect NOW!   If you or your buyer is unsure of how to proceed with their contract package, DONT GUESS!!! CONTACT THE LISTING AGENT FOR ASSISTANCE!

2013 HUD Changes

It seems like there is always something changing when it comes to HUD owned property.  Thats okay though because the system is continuously evolving to deal with the current market conditions.   So here's the latest!

EARNEST MONEY CHANGES:
Coming soon HUD will begin a new process for handling earnest money on HUD contracts. 

HUD bids won during the Buyer Select Program  will remit the sales contract to the specific asset manager that has the contract for the property.  You will not send the Earnest Money to the Asset Manager any longer from that date forward.

Earnest money will be made payable to the closing attorney's office (no longer payable to HUD). The selling agent will have 48 hours to remit their contract package to HUD's asset mananger and the earnest money to the listing broker.   To keep confusion down, I suggest including a copy of the bid confirmation sheet with the earnest money check.  This will help insure that the money is credited to the correct file.   Once your contract has been signed off by HUD and a copy is delivered to the listing agent,  we will then transfer the money to the closing agent.   Failure to remit the earnest money payable to the closing attorney and delivered to the listing broker is grounds for cancelling your contract by HUD so make sure you follow these instructions.  

Here is why...  HUD is moving towards a "Buyer Select" closing attorney instead of insisting that all closings be handled through one contract attorney's office.   In order to do this most efficiently, Earnest money will be transmitted to whomever the buyer chooses to close the deal.    At this time, Georgia is not participating in the "Buyer Select" program but we are moving in that direction.  This will mean that until the program is in full force in Georgia, you may still choose your own attorney to close the transaction but it will be considered a  third party transaction and your buyer will be responsible for the attorney fees charged by the 3rd party attorney.   Once we are in full swing of the "Buyer Select" program,  the buyer will be able to use their seller paid closing costs towards attorney fees just as they would on other real estate transactions.

To RECAP:  EFFECTIVE Soon  you will send your certified earnest money check payable to the closing attorney to Re/Max United Attn: HUD Department 1000 Bankhead Hwy, Carrollton GA 30117.  Remember to include your bid confirmatin sheet to confirm that the check is credited to the correct file.   Also,   include the address and contact number of the closing attorney if it is one other than Fearnley Calif  (HUD's Current contract attorney)



FIELD SERVICE MANAGEMENT CHANGES:
Effective this year HUD has one Field Service Manager for the state of Georgia.   No more having to scroll through the listing to find who the FSM is to decide what to do about activating utilities fo inspections or reporting property condition issues.   It's now a one stop shop!   Our new Field Service Manager for Georgia is 
A2Z FIELD SERVICES
704-943-3970
www.a2zfieldservices.com

HAPPY SELLING!

NEW BROKER INCENTIVES

 Attention Brokers: (Effective on bids submitted on or after 12/01/2011)
A broker bonus is being offered in eight market areas:  Georgia, Florida, Mississippi, Alabama, Illinois, Indiana, Tennessee, and Kentucky.  The following conditions must be met in order for the selling broker to receive the applicable broker bonus.

• The preliminary bid must be submitted on or after December 1, 2011.
• A loan commitment letter from a lending institution must be received with the signed Sales Contract if the purchase is to be mortgaged; or, if paying cash, a certification letter must be received from a financial institution stating sufficient funds are available to complete the purchase.
• The words “Broker Bonus” must be written or typed at the top of the signed Sales Contract.
• The selling broker must complete and sign the HUD Notification regarding the broker bonus sales initiative.
• For all properties that close up to 34 days of contract acceptance, the selling broker will be eligible for a $600 bonus*.
• For all properties that close within 35 to 39 days of contract acceptance, the selling broker will be eligible for a $450 bonus*.
• For all properties that close within 40 to 43 days of contract acceptance, the selling broker will be eligible for a $300 bonus*.

*Exclusions apply
Excludes:  Hard-to-sell properties
The selling broker will not be eligible to receive a bonus for any property advertised by the Asset Manager (AM) as hard-to-sell.
Note:  The Atlanta Homeownership Center will not consider any appeals submitted by the selling broker for properties that fail to close within the aforementioned timeframes.  No exceptions.

Aged Inventory

Good Morning!  Yesterday, news came in from Pemco that they want their aged inventory moved ASAP.  At Remax United, we strive to sell all of our HUD properties as quickly as possible but occasionally a property does tend to go stale on the market.   With that said,  We have two properties that I would like our followers to keep fresh in their mind when considering property for yourself or clients.  

1. 199 Courthouse Road, Temple GA (Paulding Co)  priced to sell at $64,000!!!  Originally appraised in March of 2011 at $80,000.  This is an FHA INSURED property (Move in ready!!!)  Check out the link...
199 Courthouse Rd Flyer
This ranch style home offers three bedrooms, two baths, privacy fenced back yard all on a level .46 acre lot.  This home was built in 2005 so all major systems are still within their useful lifespan.  It has maintenance free vinyl siding and vinyl windows.  The double entry garage  has an automatic opener and leads directly to the kitchen.   BEST OF ALL, HUD IS OFFERING A $500 BROKER BONUS ON THIS PROPERTY IF WE CAN GET IT SOLD IN UNDER 30 DAYS! 

2. 85 Pine Hill Drive, Carrollton GA (Carroll Co) Priced to sell at $56,000!!!  Originally appraised in March of 2011 at $70,000.  This home is an FHA INSURED WITH ESCROW PROPERTY (repair escrow is $4,400).  Check out the link...
85 Pine Hill Dr Flyer
This property is a three bedroom, two bath split level on a partial basement with vinyl siding.  The home was constructed in 1975 and built to last!  The double carport is kitchen level entry. A huge selling feature on this property is the detached 2 car garage that sits out back.   Dont miss your chance at this steal of a deal!  THIS PROPERTY ALSO QUALIFIES FOR THE $500 HUD BROKER BONUS IF WE CAN GET IT SOLD IN UNDER 30 DAYS!

If you have any questions,  as always, we are here to help!
HAPPY SELLING!
West GA Team
Remax United ~ REO Benchmark

New requirements for your Pemco contract packages

Hi all,

Quick update in procedure for our buyers agent followers.   Pemco just announced new contract package requirements and I want you all to be up to date and on top of things.  So,  from this point forward, when submitting a Pemco contract, you will need to include the original contract package plus an extra copy of the signed sales contract page, as well as the original earnest money check payable to HUD and a copy of the earnest money check.  This new procedure is from today forward.  Best of luck and keep selling those West GA HUD team Pemco properties!

NEW INCENTIVES!!!

Transitioning into M&M III has been tough...with three asset companies instead of one in the area, with a new nationwide website to locate and bid on HUD properties(http://www.hudhomestore.com/) and with many new local listing brokers learning the ropes and trying to get systems in place to get this thing off the ground. Finally, finally finally...things are starting to move in unison. New properties are coming on the market daily, and going under contract at the same speed. The prices are coming more in line with what is actually happening in the local markets. Buyers are coming out of the woodwork looking for a deal and they are finding plenty! Sadly though, many agents found themselves frustrated through the transition and threw in the towel. For those who didn't and for those willing to give it another shot....HUD wants to compensate you for your troubles. Beginning April 1, 2011, Pemco has announced the following sales incentives... SALES PRICE BROKER BONUS $25,000-$75,000 $500 $75,001-$150,000 $750 $150,001 and up $1,000 the fine print... 1. Only properties won on hud homestore after 4/1/2011 are eligible for the bonus 2. You must write or type "BROKER BONUS" on the top of your sales contract 3. "HUD notification of broker bonus" form found on the forms tab at http://www.hudpemco.com/ must be included with your contract package 4. Your contract must close within 30 days of contract execution. Now that #4 might sound like the kicker but past experience tells me that Pemco and Fearnley Calif will probably give "Special attention" to these files to make sure their end of the process doesnt hold up the file from closing ASAP. We saw this "special attention" before when the tax incentives were in place. Files flew through the title department at FCPW and closings happened in record time. We are hoping for the same cooperation with this incentive and I'm sure we wont be disappointed. I hope agents keep in mind the true intention behind the HUD program which is to put owner-occupying buyers into homes at affordable prices. The bonus is just that, "A Bonus" for doing what we are already passionate about. Happy Selling!

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. : )