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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