It has been over 2 years now since HUD changed their Management & Marketing (M&M) program, now M&M III, that had been in use since about 1999. See my 2 previous blogs - this is #3 in a series I plan over the next weeks/months.
How Does HUD Acquire Ownership
Selling HUD Homes - the Journey
Field Service Managers (FSMs) and Asset Managers (AMs) have been hired by HUD to prepare the properties for marketing, get the homes listed as soon as possible, and partner with local listing brokers to give HUD the fastest sale for the highest net possible.
Once the property has been successfully conveyed to HUD, the FSMs start to work and are responsible to:
- Inspect the properties
- Prepare the properties for sale
- Arrange for ongoing maintenance of the home, i.e. mowing, pest treatment etc
- Make payments for utilities, HOA dues and other fees as necessary
AMs have an entirely different range of responsibilities:
- Price HUD Homes competitively for the market and condition of property
- Secure the highest possible net return for HUD
- Sell the HUD Homes as quickly as possible
- Seek owner occupant opportunities
- Timely reporting and delivery of settlement proceeds to HUD
The AMs should be in constant contact with FSMs so that the properties are maintained to HUD standards and may request some cosmetic repairs if in the best interest of HUD. They are responsible for following HUD procedures for marketing the properties and are contracting with listing brokers to list the homes in MLS, provide access and support the AM in the final closing process. AMs are required to adhere to federal Fair Housing laws in the marketing, advertising and sale of HUD Homes.
There are 10 geographic areas and each area is divided among up to three AMs (I believe this is still true) The AMs will contract with local listing brokers to:
- List the property in MLS
- Place for sale signs/riders on the property
- Complete pre-inspections, take photos, do CMAs, schedule showings
- Make homes available for showing by HUD registered agents
- Help educate agents on sales procedures
- Keep AMs updated at all times
This certainly is not an all inclusive list for the FSMs and AMs, it is meant to give you a brief explanation of the separation of duties and responsibilities in the new HUD program.
According to all material that I have read, HUD has mandated that commissions will be split 50/50 between the listing and selling brokers. This is a major change from the previous M&M II, where the listing broker was only paid if they found the buyers - the selling agent received the commission based on the offer they presented to HUD for their buyer. The listing broker's commission cannot be changed by the selling broker, however the selling broker, to my knowledge, can enter a lower commission for their side if they wish to help their buyer get their bid approved by netting a higher amount to HUD.
Next time I will talk about the Selling Process for HUD Homes, starting with the NAID # (Name Address ID)
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