The ACG Group, Realtors Presents: Successfully Selling HUD Homes (2S CA Rev. 062811)8  ca)
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The ACG Group, Realtors Presents: Successfully Selling HUD Homes (2S CA Rev. 062811)8 ca)

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Forget what you thought you new about HUD Homes! The entire HUD Home system got a total makeover in Fall 2010! Don't let a lost bid be the way you find out what's new with HUD Homes!

Forget what you thought you new about HUD Homes! The entire HUD Home system got a total makeover in Fall 2010! Don't let a lost bid be the way you find out what's new with HUD Homes!

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  • 1. Welcome to PEMCO!“Successfully Selling HUD Asset Management Company contracted by HUD toHomes in California” manage the HUD Sales Process in 26 States and U.S. Territories. Presented by: – Areas defined as 1A, 2A, 1D, 2D. 2,S PEMCO, Ltd. has been performing marketing Angie Nwanodi and management services for HUD for more The ACG Group, Realtors® At Evergreen Realty Realtors® than 10 years HUD Local Listing Broker for PEMCO, Ltd. Most recent contract with HUD in 2010 to expand Asset Management Contractor to the US Department of HUD in across the country in M&M3! areas 1A, 2A, 1D, 2D, & 2S We’re excited about bringing our team to you and Revised 06/28/11 working with Real Estate Professionals to move HUD homes! Dynamics of the HUD Sales Mortgagee Compliance Process for M&M3 Manager (MCM) One Nationwide Contractor – Michaelson, Connor & Boul (MCB) Michaelson, HUD Based out of Oklahoma Santa Ana HOC Performs a variety of pre- and post pre- conveyance services to ensure that HUD’s HUD’ interests are protectedMortgagee Field Services Asset Manager – Conveyance conditionCompliance Manager HUD Designated – Guidance to Mortgagees regarding claims and Manager **PEMCO** Closing conveyance MCM (1) FSM (2) AM (2) Agent – Ensure marketable title Field Services Manager Asset Manager (AM) (FSM) Multiple Contracts per Region AM manages & markets sales process and properties – Properties to be assigned randomly – Ensures accurately and competitively valued – Makes sure sales achieve highest net return FSM provides property maintenance and – Minimize holding time preservation services consisting of: – Handles closing and accounting of funds – Takes customer service and satisfaction – Inspecting the property – Securing the property Multiple AMs per region – Performing cosmetic enhancements/repairs – Properties to be assigned randomly to – Providing ongoing maintenance contractors
  • 2. Asset Managers Property Flow Chart / QCRegion 2S Region 2S Covers: Alaska, California, MCM FSM AM Receives Markets Hawaii, Oregon, and Washington Mortgagee Initiates Property & Inspect & ensures Safe Secure FHA Claim Ensures Marketable & Marketable and Condition & Condition initial Marketability Equal distribution of inventory conveyance QC the MCM QC the FSM QC If Issues amongst two AMs to HUD Reject If Issues Reject Reject Property Property Property PEMCO, BLB ResourcesWhat is a HUD Home? What is a HUD Home? NOT low-end housing! low- Definition: a one-to-four unit single- Definition: one- to- single- family residence acquired as a result of a foreclosure on an FHA-insured mortgage FHA- Vary in price, location, and condition – HUD Homes for sale throughout the state – Some are move-in ready, others are not move- Offered for sale at fair market value, based on a recent appraisal by certified FHA appraisers Sold AS-IS AS-Understanding AS IS Appraisals All appraisals are performed by FHA No warranties, guarantees, or certified appraisers representations about the property, Appraisals are good for 6 months FHA Insurable or otherwise HUD pays for first appraisal. If lender No repairs requires a 2nd appraisal for a – Exception: “Safe, Secure, Marketable” Marketable” conventional loan, buyer is responsible Buyers allowed and encouraged to get for fee. If appraisal expires under independent Home Inspections contract, buyer is responsible for new – Buyers do NOT acquire bills/liens appraisal. – Properties are sold with clear market title 3
  • 3. FHA Appraisal Appraisal Expiration Requirements The statement of work paragraphs 5.2.1.2.3 and FHA requirements: Appraisals are 5.2.1.2.2 state: good for 120 days. It is lender Appraisals are ordered every 6 discretion to allow the buyer to use a months and appraisal and photos 1004D which provides an additional 30 are to be given to the winning days to the appraisal in a non bidder for use in obtaining a declining market. If the lender requires an additional appraisal, the mortgage loan. If lender requires a 2nd appraisal, buyer pays for it. buyer is required to cover this cost. Who can buy a HUD Home? Buyer Types Continued Owner Occupants – Giving priority during certain cycles- 30 day cycles- exclusive list period to O/O bidders – Must occupy the house for 1 yearBuyers will fall into one of three categories: – CANNOT participate in HUD sales for 2 years after purchase1. Owner-Occupants Owner-2. Investors Investors3. Government Agencies & HUD approved – CANNOT Bid until day 31 Non-Profit Organizations Non- – No restriction on quantity HUD’s Special Programs HUD’ HUD’s Special Programs HUD’ Properties which are eligible for HUD’s special HUD’ programs will list to a “lottery round” before they round” Good Neighbor Next Door are listed for sale to the general public Designed to enhance urban communities by offering discounts on HUD homes to Firefighters, EMT’s, Police, and Teachers EMT’ Two types of lottery round eligible bidders – 50% off the property list-price GNND and HUD approved Non-Profit/Govt Agency Non- Profit/Govt - Full time employment & must live and work in Revitalization Area - Information on becoming a HUD Approved Non-Profit Non- Organization is at www.hud.gov Requirements: – Property must be located in a designated Revitalization Area – Buyer must live in the home for at least 36 months 3% LISTING BROKER COMMISSION TO BE PAID ONLY ON – Buyer nor spouse may not have owned title to property in last 12 months LOTTERY ROUND PROPERTIES , NOT GNND PROPERTIES – Bidder nor spouse cannot have ever before participated in GNND program GNND eligibility will be indicated on the listing
  • 4. Additional GNND notes Get Connected! Resources for agents Must bid 100% of the listing price WWW.HUDPEMCO.COM - Listing site, calendar of events, updates, registration, forms, etc. Can utilize any type of financing or cash deal Other Important Sites - www.HUD.gov – as a national resource for HUD information - www.HUDHomeStore.com – HUD listings FHA Financing on GNND - www.HCD.ca.gov - California Dept. of Housing and Community Development – Must qualify for entire contract amount prior to discount Social Media Networks – Can finance into the mortgage all reasonable and - networking, news, updates, featured listings, featured info. customary closing costs, including prepaids and real estate - Facebook, Twitter, Active Rain, LinkedIn, YouTube Facebook, commissions PEMCO Buyer Outreach Events HUD will NOT pay any closing costs or real estate commissions on GNND properties HUD WILL ALLOW THE $100 DOWN ON THE GNND PROGRAM Keep your eyes and ears Expectations for Agents open! Quality in all work and all aspects of working with HUD and this process Professionalismwhen interacting with the buying public, other selling agents, and everyone and Agents play a critical every aspect involved in the HUD Selling Process Communication role in the success of thewith not only buyers and those involved with your transaction, but also with the PEMCO team to express concerns or suggestions or ideas that become evident HUD Sales Program to you as you work in the field and become involved in HUD selling Motivation We want to hear from to make the sales and move HUD Properties! Teamwork you! as a real estate community and with PEMCO to work toward the continued betterment of the California HUD sales process and ensure that the HUD process is always operating as successfully as possible Registering with HUD Any licensed real estate agent can sell Steps to Selling HUD HUD homes Homes BROKERAGES, not individual selling agents that actually register with HUD Get your NAID number When a brokerage registers with HUD, Register at the brokerage will receive a NAID www.HUDHomeStore.com number, which will be used by ALL agents in that brokerage
  • 5. Create a Selling Agent Registering with HUD Account Easy and free To become registered, your principle Will need your brokerage’s active NAID brokerage’ broker will need to complete the number to set up this account Broker Registration Package found at You will log into this account later when you www.HUDHomeStore.com begin the bidding process – NAID Package sent to Santa Ana HOC www.HUDPEMCO.com Accuracy is extremely important HUD Home Store link Or go directly to www.HUDHomeStore.com Process takes 6-8 weeks 6- Register as Bidder in the top right corner Must renew annually Instructional videos found on www.HUDHomeStore.com Finding properties Who is the LLB? HUD/PEMCO contracts Local Listing Brokers to provide FULL listing services on HUD Unlisted properties owned by HUD Homes – www.HUDPEMCO.com LLB Responsibilities: HUD Home Store Link o Lists properties on MLS and posts properties to their Or www.HUDHomeStore.com websites – Search field on first page o Most appropriate and mainstream MLS for area – Input address and view property contacts o Place professional, quality sign in yard o Provides routine inspections and reports o Customer Service & Contract Review & Informational When available for sale: resource on HUD listings and HUD sales process – Local Listing Broker (LLB) sign in the yard o Provide wide market exposure of the HUD sales – Listed on MLS process and the properties – www.HUDPEMCO.com o Provides access to HUD properties to ALL NAID registered brokers by providing key codes or meeting Provides link to HUD Home Store agents at property regardless of MLS affiliation – Recommended method of searching for HUD Homes – Free, public-access website public- No current solicitation Listing Periods Listing Codes•Properties will list Daily!!•Lottery Properties Some online listings are accompanied with •7 days for special buyer types•New listings codes representing the financing •Insurable/Insurable with Escrow options and/or property conditions of •30 Day Exclusive Owner Occupant Bidding Period Comprised of: •9 Days Sealed Bidding the property for sale. •Sealed = Bids will accumulate over the length of this 9 day bidding period and will be reviewed on the 10th day of this period •20 Days Daily Bidding (o/o bids reviewed daily) ? •All bidders allowed on day 31 •Uninsurable •5 Days Sealed Exclusive Owner Occupant Bidding Period •All bidders allowed on day 6 13
  • 6. Property Condition Codes LBP Stabilization Stipulations for HUD to complete a LBP assessment: - built before 1978 - owner-occupant owner-Code Indicates Description - FHA financing F Flood Zone Property is located in an area where coverage under the National Flood Insurance Program Must meet all of the above conditions may be required to obtain a loanHOA Homeowners’ Property is covered by a Homeowners’ Requests made to FSM for inspections through AM via Association Association which will most likely require HOA P260 at contract execution fees and dues to be paid by the home HUD will fund up to $4,000 occupant For stabilization exceeding $4,000 HUD will (at their sole discretion): LBP Lead-Based Property was built before 1978 and may a) cancel the sales contract and buyer receives 100% EM back Paint contain lead-based paint; LBP Addendum Form b) allow to change financing to 203(k), conventional, or 203(k) must accompany the sales contract streamline (only if less than $5,000) NO ONE IS TO ENTER THE PROPERTY WHILE STABILIZATION OCCURS. THIS WILL DELAY CLOSING. Financing Codes More About IECode Indicates Description “Repair Escrow” only applies to FHA 203(b) financing Escrow” NOT a gift from HUD IN Insurable Property meets FHA 203(b) financing Added to mortgage requirements; no obvious repairs necessary to – sales price remains the same insure an FHA loan to buyer On the listing you will see: IE Insurable w/ Property eligible for a 203(b) FHA loan; – Itemized list of required repairs Escrow necessary repairs total less than $5,000 – Total cost of these repairs – The 110% total that will be added to the mortgage Lender responsible for: UI Uninsurable Property requires more extensive repairs after – Repairs the close of escrow and is not eligible for FHA – Licensed contractor mortgage insurance in the property’s “as is” – CHANGE OF ESCROW: To change the repair escrow, a revised sales contract with new repair escrow amount listed on line #4 is is condition. needed. Also a lender letter listing the repairs and total amount amount of repairs. These figures must match line #4 on contract. Shows eligibility for FHA 203 (b); cash or conventional do not NO repairs prior to closing! apply Let’s look at Let’ www.HUDPemco.com and www.HUDHomeStore.com to learn about: News and Announcements Becoming HUD Registered Signing up for a Selling Agent Account How to Search for Listings Training and Events Calendar Social Media Networks A Listing’s: Listing’ – PCR (Property Condition Report) – Virtual Tours – As Is Value vs. List Price – Bid Deadlines – Property contacts
  • 7. FHA Buyer Benefits Showing and Advertising1. Appraisal is accepted by FHA HUD Homes lenders. No additional appraisal needed for FHA All Registered Selling Agents can show and loans. advertise any available HUD Property Must adhere to advertising/showing2. 1st extension is waived (applies guidelines to all O/O buyers) – Non-compliance could result in your brokerage’s Non- brokerage’3. Termite report is ordered and NAID number being suspended! active infestation is cleared Report Ad Non-compliance by downloading Non- and completing the form on our website4. LBP inspection & clearance. - Email: adnoncompsac@pemco-limited.com adnoncompsac@pemco- HUD pays up to $4,000 repair work.Advertising Regulations Advertising Regulations Do advertise HUD homes in a Be positive and proactive in your HUD Home advertising – Get creative! professional and ethical manner – Do not destroy, damage, or remove the advertising, Refer to HUD Homes as “HUD-owned” HUD- owned” including signage, of another HUD-registered selling or “HUD-acquired” or simply, “FOR SALE” HUD- acquired” SALE” listing agent for any HUD Property – Do not refer to or advertise properties as “distressed”, distressed” “foreclosed,” “government,” “must sell” or “repossessed” or any foreclosed,” government,” sell” repossessed” – Do not state or imply the price of the property differs from other adjectives with notable negative connotation the list price shown on the PEMCO’s Property Listing Site Closing Costs: Use “HUD will pay up to 3% closing costs” Do not place signage in a HUD property’s property’ yard. Only the LLB can do so. Do not imply exclusivity – Agents can use directionals but do not abuse this right! limit directionals to an appropriate number – The HUD Home Sales Process is an OPEN Selling Process Excessive use of directionals will be handled on a per case basis, at the discretion of PEMCO, Ltd. 20 20 Showing HUD Homes:Advertising Regulations Electronic Lock Boxes Always include the Equal Housing Opportunity Logo HUD Properties will now have Electronic Lock Always include a HUD-Home Disclosure and link to HUD- Boxes placed on them the HUD listing site www.HUDHomeStore.com & – Lock Boxes placed on by LLB www.HUDPemco.com for more information. – Report Missing Keys to LLB Note any flood plain zones, or other warning – MLS will have information about Lock Box information as it appears on the property’s Internet property’ listing, if applicable I don’t have an Electronic Lock Box Key, can I don’ Adhere to all federal, state, county, city and real still access? estate commission advertising regulations as well – YES! Provide following info to LLB to coordinate access as compliance with the Truth-in-Lending Act when Truth- in- advertising HUD Properties State specific real estate license – Including but not limited to: Blind Advertising, regulations Driver’s license or identification card Driver’ regarding directionals, etc. directionals, Your NAID # 20 19
  • 8. Showing Guidelines Fair Housing It is HUD’s mission to increase homeownership, HUD’ You must sign the sign-in sheet sign- support community development and increase access to affordable housing free from discrimination. discrimination. No open houses Areas of Illegal Discrimination: – EXCEPTION: Listing Brokers may hold an – Race – Color open house on their listing ONLY during – Religion 11 am- 2 pm. am- – National Origin – Sex Always secure the property when – Handicap – mental or physical leaving and return key to the lockbox – Familial Status Please review details in handbook 21 21 Complete the Sales Contract Accepted Offer ContractsPackage with your buyer before CA, OR, WA, AK, & HI send to: you bid Buyer’s signature is your permission to Buyer’ PEMCO, LTD. place a bid on their behalf 1601 Response Road, Suite 260 If offer is accepted, you only have two Sacramento, CA 95815 (2) business days to submit the entire Office: 916-927-7313 916- 927- contract package to PEMCO Attention: Contracts – Sales Contract, Addendums, Earnest Recommend Delivery Confirmation/Tracking Money, Pre-Qual letter, etc. Pre-The HUD Sales ContractPackage Electronic HUD-9548 Sales Contract / Condition of Sale HUD- Note that the Sales Contract for a HUD Sale is a unique contract, different from your state Contract forms contract, Electronic filing of HUD-9548 contract addendum HUD- Owner-Occupant Certification (if applicable) Owner- “For Your Protection: Get a Home Inspection” Inspection” Radon Gas and Mold Notice Lender Letter of Commitment / Pre-Qualification Letter Pre- Forfeiture & Extension Policy (Addendum A, Rev. 6/15/2009) Lead-Based Paint Addendum (if applicable) Lead- Flood Zone Addendum (if applicable) Notice to Purchaser Addendum (if applicable) Earnest Money Check with the Earnest Money Certification Form All documents must be signed in BLUE ink. See http://www.hudpemco.com/2S_forms.htm 22
  • 9. FHA Amendatory Clause Earnest Money Deposit Amounts (certified funds ONLY Cashier’s Cashier’ Check or Postal Money) Will not be executed on HUD Sales – $500 for sales price $50,000 or less – $1000 for sales price $50,001 and up Addendum not required; HUD Homes are exempt from the clause EM is made payable to “HUD OR BUYER’S NAME” BUYER’ NAME” (BOTH NAMES on check separated by word OR) and send with Sales Contract to PEMCO unless property is in OREGON (refer to next slide) The FHA Amendatory Clause is intended to ensure that prospective home buyers with FHA-backed loans receive important information in a timely manner about the house to PEMCO will send EM to HUD Designated Closing be purchased. In particular, the Amendatory Clause stipulates Agent to be held and managed that if buyers have not received information about the appraised value of the home they intend to buy, the buyers are not obligated to purchase the home. EM may be entirely or partially forfeited or refunded if contract fails to close – Specifics outlined in Forfeiture and Extension Policy The HUD Home BiddingClosing Agents Process Chicago Title (Northern CA) HUD Homes are sold via an online electronic bidding process Tiempo Escrow II (Southern CA) – Only way to buy a HUD Home Fidelity National Title (OR) Guardian Escrow (Hawaii) In promotion of homeownership, buyers who are bidding as an owner-occupant owner- Stewart Title of Alaska (Alaska) receive priority for a given amount of time. GBS, LLC (WA) Agents must submit bids on a buyers behalfAdditional Notes about Submitting a Bid – BiddingBidding over the “as is” value is”Bids can be submitted 24/7 but are not reviewed The “as is” value = the appraised value is”Holidays or weekends Bid may be higher or lower than AS IS priceDaily Bid Deadline is 9:59 p.m. PST (11:59 Central You can NOT get a 2nd appraisal when usingTime) FHANo time preference in bidding PEMCO will notify you if you overbid and requires submission of proof of fundsIf PEMCO receives two acceptable bids which are theexact same amount, we will select the winning bid by Notice to Purchaser Addendum completedrandomized electronic drawing. and submitted with Contract Package Buyer must bring cash to closingIf you place a bid you wish to withdraw, you must o Can NOT financecancel this bid prior to the day’s bid deadline. Bid day’ o A “Subject to Value” will not support the overbid Value”cancellation form found on www.HUDPemco.com amount 26
  • 10. Submitting a Bid - Let’s go online together & Let’Overbidding complete a Sales Contract Options if you have overbid: Go to www.HUDHomeStore.com and find a property to bid on - If using FHA, proceed with closing Sales contract packages for all buyers in all and verify funds. Buyer pays overbid states found at www.HUDPemco.com amount. (Forms Tab) - Use cash or conventional Complete your Sales Contract using a blue - Cancel contract pen Back up offer Video tutorials available online 24/7 at Relist – www.HUDContractDemo.info – www.HUDPackageDemo.infoSubmitting a Bid Lines 1 & 2 The following slides are to assist you with LINE 1: Print purchaser’s full, legal purchaser’ questions on the contract page name and property address (address Bids will be submitted online found on HUDHOMESTORE.COM) The information entered on the bid submission page will become the first page Line 2: Print buyer’s full, legal name buyer’ of the sales contract along with vesting. Vesting MUST be Your instructional facilitator will provide you filled in. Vesting can be changed later a sales contract to complete for practice purposes only using an addendum, but in order to accept contract, vesting must be present.Line 3 & EM amount Line 4 Line 3: Offered Sales price of property Line 4: Check financing type. If FHA, (1st line) and earnest money amount be sure to check FHA Box PLUS the (2nd line) to be held by PEMCO (3rd FHA type box ( i.e. 203B, 203B repair line) escrow). If using FHA 203B repair Earnest Money Deposit escrow, list repair escrow amount on$50,000 or less =$500; $50,001 and line (repair escrow info found on more = $1,000. Certified funds HUDHomeStore.COM). HUDHomeStore.COM). (cashier’s check or PO Order) to be (cashier’ made payable to: BUYER OR HUD (both names on check).
  • 11. Line 4 Continued Lines 5 & 6 Use TBD “to be determined” on 3 determined” Closing Cost – Line 5 – HUD will allow up to 3% the purchase price of the spaces. property to go toward closing costs “down payment of $ TBD” TBD” – Enter this numeric figure (not percentage) on Line 5 “in the amount of $ TBD” TBD” Commission – Line 6a – HUD will allow UP to 3% of the purchase price of the “for TBD months” months” property to go toward agent commission If cash or conventional, check – Line 6b will populate 3% for Listing Broker Commission appropriate box. Repair escrow does REMEMBER: Lines 5 and 6a affect the net to HUD. NOT apply!Lines 7 & 8 Lines 9 & 10 Line 7: NET to HUD (offered sales Line 9: 45 days in escrow EXCEPT if price minus closing costs & using 203K financing, then it will be 60 commissions). Winning bid is always days determined by NET to HUD. Line 10: Choose “may” if buyer wants may” Line 8: Purchasing Type: Select to be a possible back up bidder if appropriate type of purchaser (i.e. award was not made to him/her. owner occupant, investor, NP)Lines 11 & 12 Line 13 Certification of Line 11: If property was built prior to 1978, LBP addendum must be with Purchaser Use Blue Ink! contract. If buyer uses FHA financing, Line 13: Purchaser must print full, HUD will pay up to $4,000 to stabilize legal name and sign full, legal name LBP issues. and include complete address of Line 12: Purchaser MUST initial on existing residence and phone number the line provided for purchaser. Both (not property to be purchased). Be initials on same line or above line if sure name(s) on lines 1, 2, & 13 all name(s) more than one buyer. DO NOT initial match! Same legal name(s), same name(s), on the line provided for seller (this is spelling, same individual(s). individual(s). for HUD).
  • 12. Certification of Purchaser Certification of BrokerContinued Continued Line 13: Purchaser’s social security Purchaser’ Line 14: Broker’s business name and Broker’ number. If incorrect, we will request a address. This must be the principal copy of identification (i.e. driver’s driver’ broker who is registered with HUD. license and social security card). Principal broker may provide letter Line 13 (cont): Include date contract authorizing agent to sign on his/her is signed in designated area. behalf. This letter must be on broker Line 13 (cont): DO NOT sign on line letterhead, original signature, and for seller - Secretary of HUD- this is HUD- accompany each contract. reserved for HUDCertification of Broker orauthorized agent signing Submitting a BidContinued Line 14 (cont): EIN number or SS# in Review your bid and confirm to submit space provided Bid Confirmation Number will be Line 14 (cont): broker’s NAID number broker’ provided. Line 14 (cont): broker’s phone number broker’ – Enter conf # on page 1 of populated contract package. It will auto-populate on Electronic auto- Line 14 (cont): broker’s signature (or broker’ Filing of 9548 Contract Addendum (pg 4) designated broker signing on behalf of – A populated contract package is available at principal broker –must have letter) www.HUDPemco.com for you to complete. Accuracy is critical as it will auto populate the information you input on page one (version 1.9)Avoid Common Errors! Check Bid Results1. Social Security Numbers On the bid deadline day, all offers are reviewed2. The buyer’s name must match buyer’ and then accepted, rejected, or counter- counter- exactly on lines 1, 2 and 13 offered.3. After the contract/bid submission Bids are usually posted at Noon the day after the close of bidding (start 2-day deadline) prints out: 2- PEMCO will notify you via email if your bid is 1. All signatures must be in blue ink accepted and the information will be posted on HUD Home Store along with any back-up offers back- 2. Initials on line 12 acknowledging that may be acceptable. Be pro-active and pro- the EM Policy. Only initial on buyer’s buyer’ check HUDHomeStore.com for results. line (if 2 buyers, both initial on same line).
  • 13. Submitting the Contract Contract Correctionsfor a Winning Bid HIGHLY Recommended: Request LLB to review 2 business days to return corrected contract prior to sending to PEMCO. contract Ensure the entire package is received at PEMCO’s PEMCO’ office within two days of the notification May require a new contract package Hand Deliver or Overnight Mail the package. Contract will be canceled or awarded Recommended to use tracking method. to next highest bidder if the contract is PEMCO will sign off on the contract and forward it returned still containing errors via email to selling agent and closing attorney – The day selling agent receives the ratified contract is the contract’s official “Acceptance Date” contract’ Date” 30 Contract Revisions If you need to change items on the contract: You can not use white out or liquid paper on any contractual documents! - contact PEMCO immediately - PEMCO must approve and implement these revisionsCorrections required by PEMCO may mean writing a new sales contract, anew Pre-Qual Letter, obtaining your buyers signatures again …. Note: Changes to the indicated method of Make every effort to submit your contract correctly the financing will always require a new original first time! contract 30The Closing Timeline Home Inspections Optional, but highly recommendedNormal Closing closes 45 days from contract acceptance 15 day Due Diligence PeriodCash Closing closes 45 days from contract acceptance – Borrower must have the home inspection in the first 15203k Closing closes 60 days from contract acceptance days to avoid losing EM if they should cancel due to property issues found during the home inspection. The clock begins when contract has been accepted by PEMCO and property moves to Step 8 MUST Have FSM Authorize your Utility Activation Form for your Home Inspection Cannot begin process until contract signed 48 hours to complete home inspection after last utility is turned on. Must turn off utilities after inspection 31 31
  • 14. Home Inspections www.HUDPemco.com click on forms; select 2S, find FSM’s utility activation form. Complete FSM’ Under Contract Vandalism form, provide a copy of sales contract (pg 1), submit payment in certified funds. FSM will grant permission for utilities to be activated. Download form, complete, and mail to You must be present at property for the VandalismSac@Pemco-Limited.com andalismSac@Pemco- inspection and have the utilities turned off after inspection. Options for moving forward toward closing AMS 2021 Hartel Street Levittown, PA 19057 800-781- 1558 Postponing closing and extension fees 22 Greeley Street, Ste. 5 603-423- CITYSIDE Merrimack, NH 03054 0313 33 Termite Inspections Stipulations for HUD to provide Termite and WDO Letter: - State or Zone Mandated - FHA financing Buyers cannot move in or start repairs prior to closing!! Buyer must use FHA financing! Selling agents must accompany HUD will fund section 1 treatment and repairs if buyer is using FHA financing buyers, inspectors, etc. to HUD Properties at all times prior to If the property does not meet above conditions: closing. - Buyer can have termite inspection performed at any time at their own cost if their contract is accepted - Buyer will be responsible for treatment and repairs 32Extensions Canceling the Contract Property Per Day Time Frame Total Extension Fee to Sales Cost Fee Buyer$0 - $25,000 $10 15-day increments $150.00 If you are made aware that a purchaser is not going to close, please contact PEMCO ASAP$25,001- $50,000 $15 15-day increments $225.00 – Do not let the contract just cancel on its own. On behalf of HUD, HUD, PEMCO will withhold EM deposit if contract cancels on its own.$50,001 + $25 15-day increments $375.00 Contract may not fall out of compliance. Extensions are purchased and granted in 15-day ‘packages’ except Use the “Contract Release” and “Earnest Money Disposition for 203(K) financing which will be 30 days Release” Request” forms from our website justify reason for Request” If the contract closes prior to the use of all 15 days, the remaining cancellation ‘per-day fee’ will be pro-rated to the buyer and refunded by escrow – accompanied with the necessary documentation to request a Must be submitted in the form of certified funds (cashier’s check or refund . Buyer has 30 days to request EM refund. PO money order) Email to: CancelSac@pemco-limited.com and copy the Local ancelSac@pemco- Fee and Request Form must be submitted to closing agents Listing Broker. no later than 5 days prior to expiration. Be sure to send copies of extension docs to listing broker to ensure communication is rec’d by PEMCO! * Important to submit these forms prior to the expiration of sales contract Waived fees available (per case basis. First extension waived if buyer is owner occupant). 32
  • 15. Pre-Closing Walk ThroughPre- Closing Protocol Recommend that you complete the day Closing documents need to be into prior to or the day of closing closing agent from the lender 5 days If lockbox removed coordinate with LLB to prior to closing retrieve key for buyer Closing agent submits to PEMCO If there are issues, vandalism, etc., contact PEMCO ASAP PEMCO signs documents and property Closing will be postponed to attend to issues is released to buyer – Extension fee waived 35 Complete the Survey! After Closing At closing, both you and your buyer will be provided with a short survey about the HUD Home Selling Process. From Property conditions to PEMCO’s helpfulness to The buyer can now have Closing Attorney assistance, the survey inquires about your utilities activated for experiences as a whole in your HUD Home Sale. permanent use and occupy the premises Please take the time to complete the survey. The PEMCO team strives to ensure the high-levels of satisfaction At their own expense, the buyer will need to have both agents and buyers are having in their HUD Transactions, the home’s locks changed or re-keyed home’ re- and the surveys provide extremely useful insights and data inhelping us to determine how pleased everyone is with our progress. If the survey is not given to you or your buyer – please, ask for it! LLB Contact Info The ACG Group, Realtors® Realtors® AM & HUD Contact Info 450 N. Mountain Avenue, Suite A Upland, CA 91786 PEMCO Sacramento Office General Questions E-Mail: E- 1601 Response Road, Suite 260 AgentQuestions@ACGRealEstate.com Sacramento, CA 95815 Accepted Contract Review E-Mail: E- HUDContracts@ACGRealEstate.com Office: 916-927-7313 916- 927- 877.ACG.ASAP x04 877-927-7313 877- 927- 877.224.2727 x 04 Santa Ana HOC Website: www.ACGRealEstate.com Santa Ana Federal Building24/7 ACG Inventory Check: www.ACGOffers.com 34 Civic Center Plaza, Room 7015 Santa Ana, CA 92701-4003
  • 16. Thank you for attending!