1.Welcome to HUD SellingBroker training!ConnecticutHUD Sales Training Class

2. Presenters today.Dan KildeaSellstate Leading Edge RealtyJan ZacharskiDiversified Real EstateCell: 860-823-9426sellstatelere@gmail.comCell: 860-617-1462Jan.Zacharski@yahoo.com 3. Copy of the presentationVisit www.slideshare.net/dkildea 4. What we will cover today. . . Highlights of HUDs M&M III Changes Where HUD Properties come from & whereto find them. Broker Registration Process Bidding Process Preparing & Submitting the Contract The Closing Process 5. Highlights of Changes made byHUDM & M firms- Manage & Market Ofori REO and Cityside Pricing and Marketing Contract with Neighborhood ListingBrokers. Ensure customer service andsatisfaction. 6. Neighborhood Listing Brokers Referred to as NLB Formerly known as Broad ListingBrokers,or BLB Multiple listing brokers in eacharea/county.Neighborhood Listing Broker Duties: Inspect property for any repair itemsneeded. Provide initial Broker Price Opinion(BPO). Insure access for showings. 7. NLB DutiesMarketing: List in the most appropriate MLS (s) Present as mainstream real estate, not asdistressed. Signage. On-going BPOs and marketing reports. Customer Service to both buyers and agents. Industry meetings to train and inform agentsof changes and processes. Outreach events for buyers to promote HUDhomes. 8. HUD Home Myth Busters Myth: HUD Homes are low-end housing. Fact: HUD homes are available in a varietyneighborhoods, condition and prices ranges. Myth: HUD Homes are not good investments. Fact: HUD homes are offered at fair market value Myth: HUD will pay for you to totallyremodel and update your HUD Home. Fact: HUD Homes areSold AS-IS 9. Where HUD Properties Come FromA HUD-owned property. . . FHA insured loan, Foreclosed by the lender, and lender transferred ownership to HUD in return forpayment of the insurance claim. 10. HUDs Mission and FairHousing To increase homeownership, supportcommunity development, and increaseaccess to affordable housing free fromdiscrimination including:Race, color, religion, nationalorigin, sex, handicap, familialstatus. 11. Benefits for You whenSelling HUD Homes Any licensed real estate agent can show any availableHUD property. You can advertise HUD homes. You can hold Open House in HUD homes. Unlike Short Sales, no long delay period waiting forapproval You have reports and basic information about the home You know that HUD will not perform any repairs Large continuing inventory of homes 12. 100806040200Mortgages for FHA2005 2006 2007 2008 2009201020113 3 726 37363197 97937463 64 69FHA InsuredNon-FHA 13. Showing HUD Homes Any licensed real estate agent can show any availableHUD property. Sign In when showing property Insure property is locked & secure when done! Removing or damaging any signage is forbidden! Unprofessional practices and non-compliance couldresult in your brokerage being suspended fromselling HUD homes! 14. Can You Advertise HUDHomes? YES! (get approval from listing Broker) DO use equal housing logo DO hold Open Houses Advertised prices must matchhudhomestore.com Be positive and promote HUD homes Acceptable References include HUD-Owned, HUD Acquired or ForSale Do not imply exclusivity. Do not place a sign on the property oryard. 15. Showing HUD homes Remember having 2 HUD keys? No longer. More key codes, so lockboxes beingused Use Showing Access to get codes 16. How You Can SellHUD Homes 17. 1:Brokermust haveNAID2: Brokermustregisteronwebsite3: CreateyourSellingAgentaccount 18. Broker must submit paperwork toHUD to receive a Name AddressIDentifier). Up to 45 days ( 6-8 weeks) toprocess. Must renew annually, NO NOTICEIS SENT. If your number expires, it takes 45days to process as well. HUD Resource Center @1-800-225-5342 19. Broker of Record must Register as aBidder 20. re.com Click register as a BIDDER. Once registered, you will be able tolog in and view properties, submitbids, save searches, etc. If you try to register and the sitereturns a page with a red errormessage, your broker is either: Not registered, or You didnt update the site with yourcurrent license expiration date. 21. ECR Environmental Compliance RecordPCR Property Condition ReportOO Package Owner Occupant packageLBP Lead Based PaintMPR Maintenance & Property Repair list(Insurable with Escrow items)LISTING NOTES same as MPRGNND Good Neighbor Next Door 22. ANY QUESTIONS. 23. Who are HUD Buyers?OwnerOccupantsGoodNeighborNext DoorOwner OccupantsGovernmentAgencies &HUDapproved non-ProfitsInvestors 24. HUD Buyer Types Owner Occupants Have priority during certain bid cycles Required to occupy as primary residence for 1 year Cannot purchase another HUD property for 2 years They cannot have purchased a HUD home as anowner occupant in the last 2 years Investors May submit bids on Day 31 (Extended period) No restriction on purchase quantity 25. HUD Buyer Types(Continued) Government Agencies & HUD Approved Non-Profits Must be approved by HUD as a Non-Profit. Have their own NAID; submit bids themselves. Good Neighbor Next Door (GNND) The Good Neighbor Next door program offersfirefighters, EMTs, police officers and teacherssignificant discounts for purchasing homes indesignated revitalization areas. 26. GNND Program HUD offers 50% discount off of the list priceto eligible buyers. Buyer cannot own another home for one yearafter closing. Buyer must occupy home as primaryresidence for a period of 3 years. Eligible participants must work in the samearea as the location of the home. Properties must be located in HUDdesignated revitalization areas. 27. GNND (Continued) Buyer must bid 100% of the list price. Can utilize any type of financing or cash deal. When using FHA Buyer must qualify for entire contract amount prior to discount Can finance into mortgage all reasonable and customary closingcosts HUD will not pay any closing cost or realestate commissions. 28. RevitalizationAreas inNorwich 29. RevitalizationAreas in NewLondon 30. Q: So, when canmy Buyer submit anoffer? A: It depends on twofactors:conditionLocation 31. The Condition of the property will determine theListing CodeListing CodesIN - InsurableIE - Insurable with EscrowUI - Uninsured 32. Listing Codes Appraisal indicates the property meets203b minimum property requirements(MPR), no obvious repairs necessary. Think traditional FHA loanIN - Insurable Appraisal indicates the property will beeligible for 203b FHA loan but needs somerepairs; necessary repairs total less than$5,000. Think traditional FHA loanIE Insurablewith Escrow Appraisal indicates property does not meetminimum property requirements (MPR)and/or requires more than $5,000 in MPRrepairs. Think FHA 203k loanUI -Uninsurable 33. IN Insurable Property condition will qualify for FHAfinancing Does NOT require using FHA loan forpurchase 34. IE - Insurable with Escrow Only applies when using FHA 203b financing and requiredrepairs are less than $5000 Not a gift from HUD! NO REPAIRS CAN BE MADE BEFORE CLOSING. The buyer must come up with this amount in cash at closingABOVE the purchase price! On the listing you will see an itemized list of required repairs, theamount plus 10%. At the closing table, the purchaser will give this amount to be heldin an escrow account. The lender will order the repairs to becomplete in 90 days by a licensed contractor. FHA will inspect and the contractor will be paid out of the escrowaccount. If all the money is not used, it will apply toward the loan principal. 35. UI - Uninsurable Property requires repairs, in excess of$5,000. Eligible for FHA 203k renovationfinancing. Does NOT require use of FHAfinancing. 36. ListingCodeIN - InsurableIE - Insurablewith EscrowUI -UninsuredListingPeriodExclusiveExtendedLotteryThe Listing Code (condition)determines the Listing Period 37. ExclusiveListingPeriodINInsurableIEInsurablewith EscrowExtended Listing 38. EXCLUSIVEPERIOD:First 5 daysEXCLUSIVEPERIOD:Days 6 to 15EXTENDEDPERIOD:Day 16 Bids submitted during the first 5 days are held and notresponded to. On the 6th day all bids opened and reviewed.(Sealed Bid Period)(Governments, approved non-Profits, Owner Occupants)The next 10 days are daily owner occupant bidding. Bids receivedare reviewed each day, may be accepted.(Daily Bid review)(Governments, approved non-Profits, Owner Occupants)On day 16 all Bidders are allowed for daily bidding. This iswhere Investors can submit bids.(Daily Bid review)All Bidders 39. Is the house Uninsurable (UI)? Then, the home will be listed under theLottery Period first 40. LOTTERYPERIOD:7 daysEXCLUSIVEPERIOD:EXTENDEDPERIOD:UnInsurable (UI) properties5 Day Sealed Bid period; bids opened on the 6thday. Days 6 and 7 daily bidding review.Municipalities, and non-profits5 Day Sealed Bid period; bids opened on the 6thday.Homeowners, Municipalities, and non-profitsIf no acceptable bid is received, the listingshall be extended to all buyers. 41. If the property is in a Revitalization Area,HUD may decide to list the home for saleunder the Good Neighbor Next Door (GNND)program. 42. LOTTERYPERIOD:First 7 daysEXCLUSIVEPERIOD:Days 1 to 30EXTENDEDPERIOD:Day 31 Good Neighbor Next Door propertiesGood Neighbor Next Door qualified bidders.First 5 days are sealed bids, all bids reviewed on day 6.Day 6 & 7, daily bidding for GNND buyers.Owner Occupants, non-profits, andGovernment/Municipal agenciesBids reviewed DailyAll Bidders (includes Investors))Bids reviewed Daily 43. Dollar Period For properties that could not be soldafter 6 months on market. Offered to municipalities for $1. Foster opportunities for low andmoderate income home ownership. 44. READY TO WRITEAN OFFER? 45. Remember.If the property is not available,in a pending status, oris under contract,YOU CANNOT BID!If you still need help, callHUD help line at:877.331.4391 46. READY TO WRITE AN OFFER?COMPLETETHE CONTRACTFIRST! 47. Submitting an Offer No local P&S needed! The contract packages are found in the addendums tab in theproperty detail sheet. The contract package needs to be filled out in entirety BEFORE yousubmit online. Earnest money in certified funds (made out to Listing Broker) andpre-qualification should be received from your Buyer before yousubmit online:$500 if sales price $50,000 and under$1000 if sales price is $50,001 and overHalf the list price if property is a vacant lot. All signatures on the contract and addendums should be inblue ink, black ink is acceptable. No white out or liquid paper can be used on contractual documents. 48. 123-123456 John Doe and Mary Doe123 Main Street, Any City, Lake County, StateJohn Doe and Mary Doe100,0001,000HUD s Listing BrokerX3,00097,000 3603,000(not to exceed 3%)3,00091,000The ContractX3,000 49. X45 or 30Buyers selected Attorney (Buyer Select Closing Agent)XX XJDJohn Doe 123-44-5678 Mary Doe 123-44-5665 201-555-678906/25/2013XYZ Realty, Inc.234 Main Street, Anycity, ST 2222255-5555555 XYZRLTY5555555-222-5555MDJohn Doe Mary 123 Ofori Lane, Your Town, USADoeFred SmithJaneMcKay 860-123-4567John Doe & Mary Doe 50. Top 5 CommonContract ErrorsFrequently Made Errors Correct EntryLine #3 Earnest Money Held By HUDs Neighborhood Listing BrokerBe sure to enter correct amount of earnestmoney.Line #4 Type of Financing Check correct box that corresponds to thefinancing type. 203b is not accepted if theproperty is listed UI.Line #9 Closing Timeframe Ofori gives 45 days for all Owner Occupantpurchasers, cash or financed (30 days forInvestors).Line #11 Frequently left blank and itshould not be.Be sure to check correct box and attach allappropriate addenda. Other addenda alwaysincluded in a contract package. Lead BasedPaint addendum required if house built prior to1978.Line # 12 Purchasers initial EarnestMoney DepositsAll purchaser(s) initials must be on the contract. 51. NO REPAIRSBEFORECLOSING! 52. Required Sales Contract Documents Sales Contract HUD-9548 (1-99) Prequalification Statement that accounts for the amount ofthe purchase price, even for cash sales Lead Base Paint Addendum (pre 1978 homes) Notice to Purchaser Addendum Owner Occupant Certification, if appropriate General Addendum to Sales Contract Radon Gas and Mold Disclosure Addendum 53. Submitting an Offer1. Go to www.Hudhomestore.com2. Log in as Bidder3. Find the property4. Click on Submit an Offer 54. Submitting an Offer 55. 60000 56. Once your Bid iscomplete: Print the Bid Acknowledgement page. Include a copy of the Acknowledgementpage when you send the Sales Contract toOfori. 57. Offer Acceptance On bid deadline day, all offers are reviewedand either accepted, rejected (cancelled), orcounter offered. This is done by email. The asset company will notify you via email ifyour bid is accepted. Please keep an eye onyour spam or junk mail folder if you have putan offer in. If a change needs to be made after thecontract is accepted, notify your assetmanager immediately. Cancellation forms? On asset managementswebsite. 58. NOTE: AcceptedContract package MUSTbe in their hands within48 hours. 59. Buyer Select Closing Agentprogram CT now is part of HUDs Buyer Selectprogram (BSCA), effective July 8,2013 Completed contract package isdelivered to NLB (listing Broker) NLB Reviews for completeness Receives the earnest money Obtains corrections by Selling agent Sends contract package to Ofori/Cityside 60. Information needed for Buyers AttorneyBuyer will select their attorney for closing. ..Selling agent fills out the BSCA form Attorney will coordinate with Title company for HUD,and prepare all necessary closing paperwork If Attorney has closed HUD transaction after07/08/2013, enter their Buyer Select ID# on form If they have not closed a HUD deal recently, Sellingagent needs to obtain from the attorney: Proof of law firms E&O insuranceCT Juris # Provide the above to NLB, along with BSCA form 61. What Makes An Offer Sign-ableA Completely Correct Contract with allof the required addenda!A correct social security number MUSTbe submitted with the original bid or thecontract WILL be cancelled. 62. If a Minor Correction is NeededCorrectionmust be received within24 hours! 63. Contract Package mayinclude: Electronic HUD 9548 Sales Contract/ Condition of Sale Electronic Filing of HUD 9548 contract addendum Owner Occupant Certification ( if applicable) For Your Protection: Get a Home Inspection Radon Gas and Mold Notice Pre Qualification Letter Or Certification of Funds Forfeiture and Extension Policy or General Addendum Lead Based Paint Addendum ( if applicable) Flood Zone addendum ( if applicable) Notice to Purchaser addendum ( if applicable) Earnest Money check with EM Certification Form All signatures in blue ink Earnest Money check is sent in with the contractpackage; made payable to Listing Broker! 64. If the contract package is notunder Addendums:Find the Asset Management firm onthe Contact Info tab (Ofori orCitySide). Go to their website forthe contract package: Ofori: go to www.oforireo.com , clickBrokers, then select Forms CitySide: go towww.citysidecorp.com, go to AssetManagement, and select Forms 65. WHEN DOES THE CONTRACTGET SIGNED?When the contract andALL addendaare completely correct! 66. FHA and the HUD Appraisal Using FHA financing? Buyer will needto pay for a new appraisal. HUDs appraisal is not available tothe lender.NOTE: The asset company mayrequire a submission of proof offunds when bidding over askingprice. 67. Home Inspections HUD highly recommends that your buyer have ahome inspection completed. You have 15 days after receiving the sellersigned contract to complete a home inspection Send request form to asset manager Asset Manager will generate a work order to theField Service Manager (FSM). FSM will contact the selling agent to have buyerturn on utilities, timeframes, re-winterization fees,etc. Remember!! No repairs until after closing! Selling agents must accompany buyers,inspectors, appraisers, etc, to HUD propertiesprior to closing. 68. Lead Based Paint (LBP) Stabilization HUD will complete a LBP assessmentonly if all three stipulations exist:--home was built before 1978--owner occupant--FHA financing 69. If LBP test is PositiveUsing 203k financing: HUD will credit up to$4000If 203b (FHA) financing:1. HUD will perform stabilization up to $4,000.2. If >$4,000, buyer has 3 options:a. Switch to 203k and accept credit as noted aboveb. Switch to conventional financing or cashc. Cancel and receive refund of Earnest Money deposit(EMD) 70. Contract Extensions Sales price $0-$25000 $10 per day Sales price $25000-$50000 $15 per day Sales price $50000 or above $25 per day Granted in 15 day increments/ must besubmitted in certified funds If all 15 days are not used, the unusedamount will be prorated back to buyer andrefunded in escrow. The fee and request form must be submittedto closing attorney at least 5 days prior tocontract expiration. 71. Forfeiture of Earnest Money Warn your buyers that they could lose their earnestmoney if they fail to close. Investors: lose 100% earnest money for failure toclose Owner Occupants: Could lose 50% of earnestmoney for failure to obtain a loan Could lose 100% of earnest money if nodocumentation is sent in. 72. HUD recommends that you completea walk thru the day prior to closing. The lockbox may be removed whenyou get to property. Please coordinatewith the listing broker to retrieve thekey. Contact the asset manager if there areany issues. 73. Lender Documentsand the Closing Please let the lender know they needto have all the closing documents tothe HUD closing agent at least 5 daysprior to close. Post Closing Buyers Re-key theirnew home immediately at their ownexpense. 74. Resources for AgentsFor more information on trainingevents, procedures, forms: www.Oforireo.com www.Citysidecorp.comMain Nationwide website www.hudhomestore.comOther sites: www.hud.gov 75. Information on FHA Issues/Lenders/Programs/ ProcessesFHA Resource Center 1-800-CALLFHA ( 1-800-225-5342) Email: info@fhaoutreach.comFHA frequently asked questionswebsite www.fhaoutreach.gov/FHAFAQ 76. The feedback, ideas, and concernsfrom the Agents are driving the changesthat are needed to make this asmoother process.We need your Feedback ! 77. Thank you for attending !Presentation available at:www.slideshare.net/dkildeaDan KildeaSellstate Leading Edge RealtyJan ZacharskiDiversified Real EstateCell: 860-823-9426sellstatelere@gmail.comCell: 860-617-1462Jan.Zacharski@yahoo.com