I have a "clear to close" from the HUD title company. Now what?
Congratulations! Now, you actually schedule the closing. HUD's title company REQUIRES at least six business days between scheduling and the actual close date. That is not negotiable (though it may vary a little from one HUD closer to another, the timeframe is clearly spelled out on the closing instructions that came with your signed contract).
The lender
should communicate with the HUD title company about documents and figures. Be sure that the lender understands the six day rule. You will be working closely with the lender to determine when the documents are sent and when the buyer will actually sign.
Most HUD closings require the funds to be sent BEFORE the buyer signs final documents. You should clearly warn your client and the lender of that fact. In my market, the funds have to be sent at least 24 hours before the buyer closes. Since this is a dramatic departure from other closings, be sure the lender understands.
Unless you live in the same city where the HUD closer is located, HUD will send a notary to witness your buyer's signature. You will be asked to provide the location for that final step, usually your office or the lender's office.
When does the buyer get keys? The buyer does NOT get keys. Following closing, the buyer's agent accompanies the buyer to the property and uses the key in the lockbox to let the buyer into the house. The keys should then be placed back into the lockbox for the listing agent to retrieve. It is the responsibility of the buyer's agent to notify the listing agent that closing is complete and that the buyer has been given access. Buyers then should rekey all locks. HUD keys are the sole property of HUD and are NEVER to be given to a buyer.
When do you get paid your commission? The notary sent by HUD will overnight the signed documents to HUD's title company. After the title company receives and processes the documents, the commission checks are cut and mailed to the respective real estate brokers. Unfortunately, those checks are not usually sent via overnight delivery, so it may be a few days before your broker receives the check.
The lender
should communicate with the HUD title company about documents and figures. Be sure that the lender understands the six day rule. You will be working closely with the lender to determine when the documents are sent and when the buyer will actually sign. Most HUD closings require the funds to be sent BEFORE the buyer signs final documents. You should clearly warn your client and the lender of that fact. In my market, the funds have to be sent at least 24 hours before the buyer closes. Since this is a dramatic departure from other closings, be sure the lender understands.
Unless you live in the same city where the HUD closer is located, HUD will send a notary to witness your buyer's signature. You will be asked to provide the location for that final step, usually your office or the lender's office.
When does the buyer get keys? The buyer does NOT get keys. Following closing, the buyer's agent accompanies the buyer to the property and uses the key in the lockbox to let the buyer into the house. The keys should then be placed back into the lockbox for the listing agent to retrieve. It is the responsibility of the buyer's agent to notify the listing agent that closing is complete and that the buyer has been given access. Buyers then should rekey all locks. HUD keys are the sole property of HUD and are NEVER to be given to a buyer.
When do you get paid your commission? The notary sent by HUD will overnight the signed documents to HUD's title company. After the title company receives and processes the documents, the commission checks are cut and mailed to the respective real estate brokers. Unfortunately, those checks are not usually sent via overnight delivery, so it may be a few days before your broker receives the check.
An agent who sells a HUD property must be prepared for a few extra steps in the process, but the reward is an undiscounted commission and a happy buyer!
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