The main criteria about dealing with HUD is DO NOT TRY USE LOGIC. If you do, you will need antidepressants! For example:
1) You have to be a HUD approved brokerage to sell a HUD home - although at least here in Idaho nothing on their form to become HUD approved is any more restrictive than getting a broker's license (I don't think they have ever turned one down unless they didn't include a form).
2) Everyone including Realtor's have to sign in - Here in Boise, we use electronic lockboxes so it encodes the data and time of who opened the lockbox, but we still are supposed to sign in. What do they do with the paper?
3) I had to get permission to turn on utilities for only 72 hours yet the time schedule they asked for is in days! I put down May 7-10 and they made me redo the paperwork for 8-10. Isn't 1pm May 7 - 1pm May 10 72 hours?
4) Utilities can only be on for 72 - good luck coordinating the appraiser and inspector in a 72 hour window when we aren't supposed to talk to the appraiser under the new guidelines!
5) You have to pay $150 (to rewinterize the property) to turn the utilities on through the servicing company and must have permission in writing to turn them on or your offer can be terminated. We did submit the money only to get a call that they need the buyers address to return the check since it is beyond the time of re-winterizing (they admitted they never published that).
6) HUD requires all extensions will "only be granted in 15 calendar day increments". When that moved my closing date to a Sunday does it default to the previous Friday or the following Monday?
7) The buyer has to pay the extension fee with the application even if HUD is the one that isn't prepared to close (although it will be reimbursed at closing). They generated a letter to that effect including the form, so why didn't they just originate the form that they know how to use better than we do?
8) Every form has to be signed or it is subject to being rejected with your offer. Isn't it ironic that they forms are not signed when their letters are sent from their computer but ours have to be?
9) Closing costs are supposed to be "standard and customary" yet they don't pay for appraisals in Boise which is our "standard" (I know it is different than most areas of the country) but why not say "national standard"?
10) HUD won't pay for a standard owner's title policy. Shouldn't that have been covered in #9 above?
11) Appraisals: HUD has their property appraised prior to putting it on the market. Here in Boise, many of them are selling for above list price due to bidding wars. Since the sales price is above appraisal, the buyer is expected to come to cash with extra money for closing and no one can talk to the appraiser about adjusting for the fact the home had multiple offers (we don't even know if we are in multiple bid situations any more to know if we need to offer more or not).
12) HUD insured escrow repairs: These sound like they are included but they are not! If you want them fixed, you need to add them to the price and create a type of 203k loan!
These are not easy homes to deal with if you are a logical thinker. Sometimes, I think it would be easier to only show HUD homes in the morning before my brain is fully functional or after Happy Hour for the same reason. I think if I had an 80 IQ I wouldn't question things and my life as a Realtor might be lot simpler since I would just "go with the flow".
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