Selling a HUD home is not for everyone, but we have several associates that work them regularly. HUD recently made changes to the way you bid on HUD homes. Consumers will still need to work with a HUD registered broker and the associate or agent will still have to place the bid online for a client, but the new website to go to is http://www.hudhomestore.com. Some things to note about the changes include that you will have to register again. Even if you were previously registered as a HUD broker and have an NAID number, now you must go to the above mentioned website and then register on their site. Once the main broker has done that, the agents in their office can get registered. You will need to have your license number and expiration date of your license along with the office NAID number. Each time you place a bid, you will have to have the NAID and your license (not the broker’s license number) ready to input.
The “insurable” homes are listed for “owner occupants” (people that intend to live in the home) for 30 days which is longer than before. They will not review the bids for the first 10 days and will remain sealed for that time. After the 10th day, they will review them and could go with one of the bids, so get your bids in sooner and don’t wait!! The 31st day will be open to all purchasers if it has not sold. ”Insurable” homes are homes that can be insured by FHA which means that they require less than $5,000 of repairs in order to be livable. If it says “insurable with escrow” that means that it would require money to be put in escrow by the buyer in order to bring it up to FHA standards and that would have to be repaired after closing.
The “uninsurable” homes are listed for 5 days to owner occupants and then on the 6th day available to all purchasers. ”Uninsurable” homes will have to go conventional financing or pay cash, but can NOT go FHA, usually because they require more than $5,000 in repairs in order for them to be livable. They could go 203K, which is a renovation loan, but not many banks are doing these loans right now.
Some things did not change like the earnest money amounts, $500 for $50,000 or less and $1,000 for $50,001 and up. The stopped the $100 earnest money program for owner occupants a few months ago.
Another note for the REALTORS is that HUD has reduced the amount of commission they pay for selling a HUD home. They will pay up to 3% to the selling broker and no more.
So basically, you need to be aware of changes and check out programs before place bids for your clients. Since there was no information passed out by HUD or no notice of these changes, we thought you might want to know. I am the resident HUD expert in our Keller Williams Metro Group that our associates contact, so if you have clients wanting to make offers or if you are interested in making an offer on a HUD home, please contact me.