Selling VA and HUD Homes

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Basics of how real estate agents go about selling VA and HUD foreclosures by Wolkia.

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Selling VA and HUD Homes

  1. 1. Selling VA and HUD Homes by:  Tina Merritt Wolkia.com
  2. 2. What are VA and HUD Homes? <ul><li>Otherwise known as &quot;government homes&quot;, the Department of Veteran's Affairs sells their foreclosed properties as &quot;VA Homes&quot;. </li></ul><ul><li>FHA foreclosures are sold by the Department of Housing and Urban Development as&quot;HUD Homes&quot;. </li></ul>
  3. 3. The Basics <ul><ul><li>Government-owned homes are usually listed in MLS </li></ul></ul><ul><li>  </li></ul><ul><ul><li>Many have combo lockboxes instead of Supra boxes </li></ul></ul><ul><li>  </li></ul><ul><ul><li>REIN contracts may or may not be used.  Addendums are generally required. </li></ul></ul><ul><li>  </li></ul><ul><ul><li>Homes are sold &quot;as-is&quot; and may or may not be eligible for financing </li></ul></ul><ul><li>  </li></ul><ul><ul><li>You are dealing with the government.  Efficiency is not their forte </li></ul></ul><ul><li>  </li></ul><ul><ul><li>Home sale contingencies or other unusual contingencies are not accepted </li></ul></ul>
  4. 4. Things to Keep in Mind <ul><ul><li>A foreclosed home is generally a &quot;neglected&quot; home - if the owners couldn't make their house payments, you can assume they were not having their HVAC serviced regularly </li></ul></ul><ul><li>  </li></ul><ul><ul><li>Most government owned homes have been winterized.  If the buyer wants a home inspection, they will have to pay to have the property de-winterized and re-winterized </li></ul></ul><ul><li>  </li></ul><ul><ul><li>Use a lender and closing agent who are familiar with government owned homes </li></ul></ul><ul><li>  </li></ul><ul><ul><li>It is not uncommon to have title issues.  Warn your buyer ahead of time that the closing date is not set in stone </li></ul></ul>
  5. 5. More Stuff..... <ul><ul><li>$1000 EMD may be required </li></ul></ul><ul><li>  </li></ul><ul><ul><li>Early possession is NEVER permitted </li></ul></ul><ul><li>  </li></ul><ul><ul><li>HUD/VA homes are exempt from disclosure </li></ul></ul><ul><li>  </li></ul><ul><ul><li>HUD/VA will generally not make repairs unless it is something that happened while the property was under contract </li></ul></ul><ul><li>  </li></ul><ul><ul><li>VHDA affadavits can be difficult to get signed - get those to the bank ASAP </li></ul></ul>
  6. 6. VA Owned Homes <ul><ul><li>MLS is not always accurate!  Always check:  http://va.reotrans.com before showing or submitting an offer </li></ul></ul><ul><li>  </li></ul><ul><ul><li>Countrywide pre-approval required on all offers; however, buyer is not required to use Countrywide </li></ul></ul><ul><li>  </li></ul><ul><ul><li>  Allow 2-3 business days for a response </li></ul></ul><ul><li>  </li></ul><ul><ul><li>Veterans who are owner-occupying are usually given priority </li></ul></ul><ul><li>  </li></ul><ul><ul><li>Countrywide is now managing all VA properties.  Offers are submitted on REIN contracts and then countered with VA addendums </li></ul></ul>
  7. 7. FHA/HUD Homes <ul><li>Here is the address for the lastest on HUD Homes in Virginia: </li></ul><ul><li>http://www.tenmanagement.com/listings/state.do?code=VA </li></ul><ul><li>  </li></ul><ul><li>  </li></ul><ul><li>HUD Homes are bid online ONLY!  When you submit a bid, it is binding and you are attesting that you have a bonafide buyer and EMD in hand! </li></ul>
  8. 8. More on HUD Homes... <ul><li>HUD Homes and the bid process: </li></ul><ul><ul><li>Investors cannot bid until the property goes through the &quot;owner occupant&quot; stage </li></ul></ul><ul><ul><li>UI= UNINSURABLE - property will NOT qualify for FHA financing due to condition </li></ul></ul><ul><ul><li>IN= INSURABLE - repairs may be noted on listing </li></ul></ul><ul><ul><li>USE Long and Foster's Federal ID # when you bid (you can obtain this # from Beth). </li></ul></ul>
  9. 9. Zero Tolerance Policy - All names and Identification numbers entered on the initial bid submission must be correct and spelled as they legally appear on the Driver’s License and Social Security Card. All the information on the initial bid submission must match the 9548 contract. If any names or identification numbers are entered incorrectly on the initial bid submission or the initial bid submission does not match the 9548 contract, HMBI on behalf of HUD will cancel your contract. Because of this policy, we strongly recommend viewing or obtaining a copy of the buyer(s) Drivers License and Social Security Card prior to submitting the initial bid and completing the sales contract.
  10. 10. <ul><li>To ensure that you submit an acceptable Sales Contract, please take a moment and ensure that the following are correct: </li></ul><ul><li>  </li></ul><ul><ul><li>Where Real Estate agent signatures and/or initials are required, only the broker signs the contract and initials other documents. </li></ul></ul><ul><ul><li>  </li></ul></ul><ul><ul><li>The purchaser must sign the radon, gas and mold form and lead-based paint addendum. </li></ul></ul><ul><ul><li>  </li></ul></ul><ul><ul><li>It is MANDATORY that the earnest money be a cashier's check or money order ONLY - no personal checks </li></ul></ul><ul><ul><li>Line 5 of the Sales Contract: Closing Costs: HUD pays certain Closing Costs UP TO 3% of the purchase price, IF the closing costs are inserted on line 5 of the sales contract. Click here to view HUD Notice H-2006-12 explaining which closing costs are allowable and the maximum amount in your appropriate state. </li></ul></ul><ul><ul><li>Line 6b of the Sales Contract is left blank. </li></ul></ul><ul><ul><li>Line 9 of the Sales Contract must reflect 45 days. </li></ul></ul><ul><ul><li>Line 12 of the Sales Contract: All purchasers must initial line 12 of the Sales Contract. </li></ul></ul><ul><ul><li>Line 12 of the Sales Contract: The &quot;other addendum&quot; box must be checked </li></ul></ul>

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