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The United States Dept. and Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) are revamping the HUD REO program, effective this month. HUD owned property sales will more closely resemble bank owned property sales.
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22 Comments on HUD Enacts Sweeping Changes to HUD REO Sales Program
Hmmm, while I doesnt surprise me that the HUD is making changes, some of these changes kind of surprise me... 5% to 3%? 10 days to 30 days for owner/occupant?????
The listing agencies now receive up to 30% ... MUCH more incentivizing than the small flat fee they received prior to this change.
I LOVE the extension of owner/occupant priority ... Hopefully HUD will put more anti-fraud measures into place to catch investors who call themselves owner/occupants.
Good information, There are more reasons now to work with HUD properties than ever before.
I am very excited about the changes ... I just posted an invitation for a Free Webinar ... marketing with a focus on HUD Homes: "Create an e-MAIL Newsletter Campaign for HUD Homes Using MailChimp."
I just saw a HUGE type ... Listings agents get THREE PERCENT, not THIRTY PERCENT. That's a Super Blooper if ever I saw one. OMG!
Not that HUD cares but I think 30 days for owner occupant is too long.Cut that in half and you have a good comprimise. I get the lower listing agent commission, it falls in line with most other REO programs.
I know this is probably going to be covered in the webinar, but can I go to the HUDHomeStore site and register now even if I don't have clients interested in a particular HUD home at the moment?
Joan, You can register as long as your brokerage has an NAID number. You don't need clients in hand to register.
Big mistake for Hud to switch this up,,,,,,,,,,,buyers dont want to wait 30 days to have a bid results and then get beat out on bid. Most will back out of transcation before the 30 days is up and say I found something eles. Agents dont want 3% for this kind of hassle,,, and alot of Hud homes wont go FHA finacing due to condition,,, when the buyer finds this out after the bid is accepted. I see alot of upset buyers, upset agents over this...............It will be worse than before.
what you dont understand frances,,,,,whats to love,,,,,,,,,,now your buyer has to wait 30 days to find out if they won the bid.............sounds like alot of waiting to get rejected on the bid because they didnt bid high enough. Its was better when the bid results were sooner not longer,,,,reducing the commision from 5 to 3,,,,,whats to love about the new program
The 30-day wait seems a bit long and it may reduce the number of bids, increasing a buyer's chance to win. I would not be surprised to see the initial wait time to 10 days with a daily bid opening for owner occupants for the 20 days following that.
In many market areas bid statistics reflect commissions of 3% or less, so I do not think this will have a marked effect on sales.
What's to love?
First the intial bid time is 30 days for all bids generated, the other problem is all hud homes are inferior in condition as to regular mls sales, where is the incentive to bring a ready and willing buyer to these properties if the commision is the same as other properties,,,,also 203k loans are a headache, more work for the agent to educate the buyer on the process............most lenders dont want to deal with them. I see alot of properties falling out of escrow which they do now. The goverment needs to liquidate this vacant, inferior, as-is, homes , not futher restrict the flow of properties with longer waiting periods, now with the new property management teams all you have is more middle men to take the commisions from brokers who where good at selling these types of properties,,, alot of these experts with move on.
I disagree. I think that many HUD homes are EXCELLENT value and provide good opportunities for buyers to become homeowners. 203(k) financing requires a lender who knows how to process that type of loan ... like anything else, knowledge and savvy are key to a successful transaction.
Most of the changes to the HUD Homes REO program make sense, in my estimation.
your whats to love will never replace the 5% commision, thats the main reason many agents worked these properites, to take that away will hinder had sales futher, big mistake, 203k loans where always there thats nothing new, as for everthing being in one place is no advantage at all, putting the properties on there list at random with make it even harder to track..............I thought our goverment was in fiancial trouble,,now they made it more difficult to sell these homes and recover the money they lost............big blunder,,, what eles is new.
Frances Im from california sales prices are alot higher than tucson I can live with 3% in most cases,, but your property values are 40-90k for most of the hud homes, you should be screaming mad they made the change to 3%. commision on a 50k deal is $1500 in your area ,it should be $2500, thats a big hit , and you love the new change?
I am less motivated than ever to sell HUD homes. For one, this is the first place I have been able to find out any information concerning the changes in the owner occupant bid deadline. Why doesn't HUD have a handbook on the website like they used to? If there's one there, I haven't been able to locate it. The extra incentive to deal with HUD's "special" contract, paying for overnight service to their M&M contractor, having to drive 45 minutes to an hour to get to their "special" title company to close, scheduling inspections, utilities for inspections, getting special permission for inspections......UGHH. Most HUD homes in my area are not owner occupant homes. The two 203k loans I have done were a nightmare for myself, my buyers and the lenders. The 30 day owner occupant period is ridiculous even though the simultaneous period is only 11 days. Investors lose interest after that. My investors don't even want to look at HUD homes anymore. Most of the HUD homes in my area are in the 50-100k range, which is a popular first time buyer price range but the houses usually need a minimum of 20k to be move in ready.
Kalene,
There is a broker handbook on the website.
Each property detail page has a series of tabs. The "Addendums" tab houses the that guide as well as inspection reports and contracts.
Focus of the program is owner occupant purchasers. Sounds like a good 203(k) lender would be well received in Kansas City. 8-)
see I told agents would be less interested in selling the inferior hud home, also after sometime watching the new hud sales program in action,,,,,its diffently not going as planned,,,,,,numerous homes on extended lists now, not getting the action they had before,,,,,,,,,like I said big mistake,,,,,,,,,,and the listing agents are clueless on the hud process, have you seen there listing decriptions,,,,,,,,,,,,,,Hud home corner lot,,, nesteled amounst towering pines, beutiful view,,,,,,,,,,,,,,,,,what,,,,,,,,,stop right there are you kidding me its a hud repo,, with dirty carpets or no carpets, broken windows, weeds, needing paint and repairs,. plus its an as- is sale...........just say Hud home for sale make offer ,,,,,,,,,,,,
I would like to clarify the matter of the owner/occupant bidding period. Bids will be opened on the 11th day ... bids are opened daily after that ... if there is no acceptable owner/occupant bid at the end of 30 days, investors bids are received and opened on Day 31.
commission change for a hud specialist (over 10 yrs) has been horrible and the listing agents have an unfair advantage of mls, listing flyers online, online name on hudhomestore, paid 3% even if they don't sell and 6% if they do AND THEY STILL ARE NOT SELLING THE MAJORITY. yet, buyers agents get max 3% = these changes stink and listing brokers would do it for 1% guaranteed.