MARKETING AND SELLING HUD PROPERTIES
Prior to Listing HUD Properties
As soon as the property comes to HUD’s inventory, the property management for HUD orders an initial property condition report. This inspection is not done by a professional inspector and there are no warranties with this report. The property condition report will be provided to an FHA-approved appraiser before they go to the property. Based on the property condition report and the appraiser’s observations about the home, an appraisal is completed for every property prior to listing it for sale. The appraisal report identifies possible deficiencies in the home and determines the price. Appraisers are required to give rough estimates for the repairs which are disclosed on the listing. Estimated costs to cure repairs may fluctuate after the contract process begins and actual repair bids are sought.
Properties on the Market
All HUD properties are listed on www.HUDhomeStore.com and in the local MLS (multiple listing service), whenever possible. Information about the properties, disclosures, number of days on the market, prices or anything posted at HUDHomeStore.com takes precedence over the information in the MLS.
Submitting Bids for HUD Properties
Offers for HUD properties are not submitted in the conventional way where the selling realtor presents the offer to the listing agent and the listing agent shows the offer to the seller. HUD homes are sold through a biding process. The realtor submits a bid via www.hudhomestore.com. If the offer submitted is the highest bid, BestAssets will notify the selling realtor via e-mail, informing them of the accepted bid. The selling agent must send an original, signed sales contract and necessary addenda to BestAssets within 48-hours of bid-acceptance.
Before Submitting a Bid for a HUD Property
Selling agents who wish to submit bids for HUD properties must work in association with a broker who has a HUD-issued NAID (Name & Address Identifier). Brokers may submit an application for a NAID number at HUDHomeStore.com and click on the “NAID Registration” tab. After receiving the NAID, brokers must register on HUDHomeStore.com and create a profile. Each selling agent from that brokerage can submit bids for HUD properties using the NAID number of the broker. The selling agents also have a choice to create individual profiles to keep track of transactions. NAID applications may take up to 10 weeks to process and BestAssets has no influence over the issuance of NAIDs.
NAID numbers are only good for one year. The broker has to re-submit documentation before their NAID expires.
HOW TO SUBMIT A BID ON HUDHOMESTORE
Ready to Submit the Bid
It is very important that you download a copy of the listing, the addenda and all the uploaded documents for the subject property. Once the bid is awarded, this information will be removed from the website. It is also recommended that realtors fill out the sales contract and addenda prior to bid submission. Watch our video on how to fill out the contract and addenda on our website at http://training.best-assets.com/. The sales contract and addenda must be received by BestAssets within 48-hours of the bid acceptance. Sales contracts must be originals with signatures, therefore, selling agents must account for mailing time. Having the contract signed before submitting the bid will simplify this process. Contracts and addenda should only be mailed for accepted offers. BestAssets does not need contracts for non-winning bidders.
Be aware that because all the bids are sealed during the bidding period, we cannot confirm or review any of the bids before the opening day. Before the opening date of the bid, realtors may sign into HUDHomeStore.com and change or delete your bid. Once a bid is reviewed by BestAssets, no changes can be made. Do not contact BestAssets to ask if a bid has been accepted. This information will be visible on the listing site.
On the date bids are scheduled to be opened, BestAssets will review all offers submitted. If the opening date falls on a weekend (Saturday/Sunday) or holiday, offers will be reviewed the next business day.
Once the bids have been reviewed and awarded, the notice of a bid-acceptance will be e-mailed by the end of the business day. If none of the offers are acceptable according to our marketing plan, we will counter-offer all bidders. Be aware that counter-offering a bidder means that we are asking bidders to re-submit an offer with a higher price/ net to HUD. The net to HUD is the full price, less the closing costs, the selling and listing agent’s commission. New offers must be submitted before midnight the day the e-mail is sent.
BestAssets/HUD reserves the right to waive any irregularity in any bid, reject any and all offers, and withdraw a property at anytime. If the request to cancel the bid is from the buyer, the selling realtor must contact BestAssets immediately to prevent the offer from being accepted and going under contract. The initial request should be by a phone call, followed by an email or a fax. BestAssets must have written documentation of the cancellation request.
Sales Contract Submission
As mentioned in the bid section, the sales contract and addenda should be signed before you submit your bid. The original sales contract and addenda must be received by BestAssets within 48-hours of bid-acceptance. The sales package must be mailed overnight delivery. Be certain to retain tracking numbers.
If the contract was not completed before submitting the bid, the sales package and addenda must be downloaded and signed by the buyers the same day the confirmation e-mail is sent. Bids will be cancelled and awarded to back-up bidders if correct sales contracts and addenda are not received within 48-hours. In cases where there is not a back up bidder, the property will be re-listed for sale.
It is imperative that selling agents view our training video about how to fill it out the sales contract to ensure that everything is correct. The video is available on our training site:
If agents still have questions, we offer a daily training class with a question/answer portion listed below:
Monday- Friday, 8:25 a.m., CST.
Participant code: 95905230
The sales contract, addenda and the original earnest check must be sent via overnight courier to:
12808 W. Airport Blvd, Suite 260
Sugar Land, TX 77478
If correct sales contracts are not received within 48-hours of the accepted bid or required corrections are not received within 24-hours of the request, the bid will be cancelled and awarded to the second highest bidder.
Earnest Money Requirements
Earnest money deposits must be received with the sales contract and for the correct amount. The amount of earnest money is non-negotiable and is determined by the sales price (accepted offer amount), as shown below:
Sales Price= $0 - $50,000:
Sales Price= $50,000.01:
- Earnest Money: 50% of the Sales Price
FYI- Home Inspection
Buyers have 15-days to perform a home inspection after the contract has been signed by BestAssets. Such inspections are made at the buyers’ expense and results are strictly informational. HUD properties are listed in AS-IS condition and the submitted offer is not contingent upon a home inspection.
After the contract is accepted, the realtor must mail the request for the home inspection to the Field Services Manager (FSM). This information can be found on the property listing. AMS and First Preston are the FSMs in BestAssets’ contract area. Forms for both FSMs will be provided to realtors in the blank sales contract; however, only one form may be submitted to the appropriate FSM.
Please submit a signed cancellation (your broker’s standard agreement is fine), a written statement as to why your client wishes to cancel, evidence supporting their reason to cancel (i.e. signed credit denial letter), and page one of the sales contract. Once these items are received in their entirety the cancellation will be processed. Best Assets will at this time let you know whether or not your client will receive their earnest money back or if it will be forfeited to HUD. If the EM is to be returned we will instruct the Closing Agent to return the funds within 5-business days of our notice.
Earnest Money Return/ Forfeiture Policy
The following provisions are applicable in all instances except those where HUD is unable or unwilling to close the sale, in which case the entire amount will be returned.
- Uninsured Sales: 100% of the deposit will be forfeited to HUD for failure to close, regardless of the reason.
- Insured Sales:
- 50% of the deposit will be forfeited to HUD for failure to close if the purchaser is determined by HUD to be an unacceptable buyer.
- 100% of the deposit will be forfeited to HUD if the sale fails to close for any other reason.
Return 100% of the deposit when:
- There has been a death in the immediate family (purchaser, spouse or children living in the same household).
- There has been a recent serious illness in the immediate family that has resulted in significant medical expenses or substantial loss of income, thus adversely, affecting the purchaser's financial ability to close the sale.
- There has been a loss of employment by one of the primary breadwinners, or a substantial loss of income through no fault of the purchaser.
- For an FHA insured sale, HUD (or a D.E. underwriter) determines that the purchaser is not an acceptable borrower. For an uninsured sale, the purchaser was pre-approved for mortgage financing in an appropriate amount by a recognized lender and, despite good faith efforts, is unable to obtain mortgage financing. "Pre-approved" means a commitment has been obtained from a recognized mortgage lender for mortgage financing in a specified dollar amount sufficient to purchase the property.
- There is other equally good cause, as determined by BestAssets, in keeping with the spirit and intent of the above policy.
Return 50% of the deposit when:
- For an uninsured sale, despite good faith efforts by the purchaser, there is an inability to obtain a mortgage loan from a recognized mortgage lender.
Forfeit 100% of the deposit when:
- No documentation is submitted.
- Documentation fails to provide an acceptable cause for the buyer's failure to close.
- Documentation is not received by BestAssets no later than close of business on the tenth (10th) day following cancellation of the contract.
Vacant Lot Sales:
The purchaser is considered to be an investor and all instructions pertaining to investors will apply