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Short Sale Package and HUD-1 form

By
Real Estate Broker/Owner with Home Solution Real Estate Services SC 64867

Are you doing more and more "short sales" these days?  If you're an active agent, the answer to that question is most likely a resounding "YES!"  I've been actively listing and successfully selling and closing "short sales" for about a year now.  Until now, one of the more frustrating aspects of putting together a short sale package for a lender is that they require a HUD-1 showing the Seller's side of the transaction.  In South Carolina, the Buyer selects the closing attorney, who prepares the HUD-1.  At the time the short sale package is prepared and presented to the lender, the Buyer has most likely not selected an attorney.  Not wanting to wear out my welcome with my preferred attorney by asking them to prepare countless "free" HUD-1's for deals that may or may not close, I began searching for software that would assist me in preparing these preliminary or "DRAFT" HUD-1 forms myself, to include in the short sale package.  After trying several free packages, EUREKA!  I came across - TSS Software's FREE HUD-1.  Agents can use the software at http://www.freehud-1.com.  Just as their website proclaims, no fees, no obligations, no catch.  Best of all, the software is web-based, so you can access your HUD-1 anywhere you have Internet access.

 

Tips to remember in preparing the preliminary or "DRAFT" HUD-1 for your short sale package:

  • Plainly mark the HUD-1 as "preliminary" or "draft" for "short sale consideration only"
  • Enter in sections 400 and 500 any pro-rata taxes or assessments that may be due or may be refunded. When projecting the closing date, allow 90 days from the date the package is being submitted, and be certain to note the projected closing date.
  • Enter the details of the commission in section 700.
  • If the Seller is to pay a specified dollar amount toward Buyer's closing costs, you may simply enter this amount in the Sellers column at the bottom of the 800's, and note that it is for Buyer Closing Cost assistance.  You don't need to estimate each of the individual Buyer closing costs that this will be used to pay
  • Estimate the attorney's fees and document preparation fees the Seller pays; your estimate should be on the high side of what the customary range for fees is in your area.Enter these in the 1100's section.
  • Calculate all the transfer fees, deed stamp/taxes, etc using a calculator or Excel spreadsheet.  Double and triple check your calculations, then enter the amount in the HUD-1 in the 1200's section.
  • Include any fees for property preservation, utilities turned on specifically to accommodate inspectors, pest inspection, and any other fees or costs incurred for the transfer of the property.  These fees should be included in the Seller column in the 1300's.
  • Print the preliminary HUD-1, review it, have your broker or another agent review it, and make any needed changes.

. . . and may all your short sales be approved and close within 30 days!

 

 

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Wondering what you'd NET on the sale of your home, or looking for a Realtor® who can help you get your home SOLD?  Tired of throwing away your money on rent, and want to consider all your options? Contact me for a free professional consultation to discuss your choices, and let's get started.

 

Teresa B Cooper, CPA Emeritus, Realtor® of Distinction
1-888-485-4356
teresabcooper@gmail.com

 

Jen Bowman
Keller Williams on the Water - Holmes Beach, FL
Realtor - Anna Maria Island & Bradenton FL

I've been using a quick and easy free HUD 1 that I found from one of our Active Rain member's blog. I have it bookmarked and have been using it a lot lately.  I haven't been marking it as preliminary or draft though. I will start doing that. Thanks for the tip!

Aug 11, 2009 12:00 PM
Teresa Cox King
RE/MAX of Orange Beach - Orange Beach, AL
Orange Beach and Gulf Shores, Alabama

Oh wow.  Are you sure agents should be preparing a HUD 1?  We are licensed to sell real estate and this seems to be the job of a title company.  We do prepare estimated closing costs in my area for buyers and sellers, but HUD1's?  Not my area of expertise and I feel this is a job of the closing title company I use for my short sales.  You could include the seller's title company choice as part of the negotiation on your contract on your short sales, there in S.C. correct?  Just wondering what responses the post will have and if I am just being overly cautious.

Aug 11, 2009 12:15 PM
Teresa Cooper
Home Solution Real Estate Services - North Charleston, SC
SC Lowcountry - Charleston, Dorchester, Berkeley

Hey Teresa - no, we're not preparing final HUD-1's, and all parties know these are not the final numbers.  In fact, the numbers on these HUD-1's are the SELLER SIDE only.  Like you, I was very leary of this at first.  I had developed an Excel spreadsheet to calculate all the closing costs and expenses, and the amount remaining for the lender.  I submitted this to the lenders as part of the short sale package.  That worked fine until about the last six months, when all the lenders I am working with began insisting that these same numbers be presented on a HUD-1 form.  You say you prepare estimated closing costs.  I assume you mark these documents as "estimated".  Marking the HUD-1 document I prepare for the lender as "Preliminary" or "Draft" and "For short sale consideration only" is much the same.  It's the same information, with the same level of confidence, presented in a specified format, rather than an informal format.

 

Yes, I'm interested to see how other Realtors are doing this.  Are there attorneys out there willing to prepare countless "free" preliminary HUD-1's for short sale package submissions?

Aug 11, 2009 12:40 PM
Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

I do have a settlement company that will prepare a draft HUD-1 for me.  Though I do use an on-line form to give me a head start.

Aug 11, 2009 12:58 PM
Ginger Harper
Coldwell Banker Sea Coast Advantage~ Ginger Harper Real Estate Team - Southport, NC
Your Southport~Oak Island Agent~Brunswick County!

Thanks so much for sharing this.

Ginger

Aug 22, 2009 10:57 AM
Wanda Bond
Weichert, Realtors® - Brockwell & Portwood - Chester, VA
1st Choice for Selling Chesterfield & Central VA

Thank you...thank you...thank you...I'm new to real estate (less than a year); am presently obtaining my Certified Distress Property Expert designation; and wouldn't you know it?  My first listing is a short sale. On the market only three days, I got an offer. And I was cool with that until it dawned on me that I have no idea how to do a HUD-1 statement. Of course, I know what they are. I've closed several transactions on the buyer's side. But before I ran to my broker cying, "The sky is falling...the sky is falling," I thought I'd search Active Rain to see if I could find HELP for preparing a HUD-1. As always, Active Rain comes through for me.  Of course, I'll still have my broker go over whatever I put together for the bank but I just breathed a sigh of huge relief in knowing there's somewhere I can go to at least get a preliminary start without bugging my broker, my fledgling contact list of lenders, title companies and real estate attorneys. 

Aug 26, 2009 03:58 AM
Lorinda Ward
Keffer Realty - Norfolk, VA
Serving, Hampton Roads Virginia. Norfolk, Chesapeake, Va Beach

I just signed up for the free hud 1 website but I have never used them.  Thank you for your post.

Sep 22, 2009 10:44 AM
Leslie Jeffers
Collini Real Estate LLC - Vineland, NJ
First time buyers, sellers, New Jersey Real Estate

Very helpful, thanks so much!

Sep 12, 2010 03:59 PM
Anonymous
Vicki Rhonemus
Just tried to sign up and it's no longer free or available .... Ther is a 30 free trial and then it's 14.95 per month
Sep 21, 2011 03:16 PM
#9
1~Judi Barrett
Integrity Real Estate Services 116 SE AVE N, Idabel, OK 74745 - Idabel, OK
BS Ed, Integrity Real Estate Services -IDABEL OK

Like Vicki above, I checked it out and it is no  longer free.  I wonder were you grandfathered in at free, or did the cost change for everyone already using it...

Jun 29, 2013 08:44 PM
Teresa Cooper
Home Solution Real Estate Services - North Charleston, SC
SC Lowcountry - Charleston, Dorchester, Berkeley

Judi - seems that good things never last, do they!

You can go to this link at the HUD website:

http://www.hud.gov/offices/adm/hudclips/forms/files/1.pdf

 

Download the file, and open it, and it should allow you to use Adobe to fill in the form.

 

 

Jul 03, 2013 09:50 AM
Anonymous
Sam

For fillable HUD1 or any application form online get it at PDFfiller.com http://goo.gl/rSHURw
It's a great service you can upload your own PDF file so you can edit or fill it out online and sign the document, save, print, email and even fax it. Also you can find the right fillable form anytime using the form search engine that contains more than 10 Million forms. Check it out there is no harm in trying.

Oct 23, 2013 10:38 PM
#12