Today I wrote two offers. One is on a HUD property and the other is on a Fannie Mae property. Both offers are different to write then the normal offers. We will talk about the HUD property today.
When writing up a HUD offer the first thing to make sure of is that your broker has an NAID number. If he doesn't you can't write it up. You have to refer it elsewhere. The next thing you have to do (unless you have already done it) is to register yourself with HUD. When you update your sale person license it is important to update your HUD account. I didn't and had to do it while my client was watching me.
Now go to http://www.hudhomestore.com. Search for the house in question. You can do it by address or case number. You can do a general search of homes in your area. When you find the home in question take a look at it. Make sure you are not in the homeowner period if you have an investor. One great thing about HUD, Fannie Mae and Freddie Mac is that they all give the homeowner a first look period. This evens the playing field out for your homeowners. They often cannot compete with the investor.
Make offer. Fill out everything. Make sure to put in the commission and any closing costs your buyer is asking for. If your offer is accepted they will ask for copies of the drivers license and social security cards. Might as well grab them when you make the offer. Think about whether you are willing to be the backup offer. Think about how much you want for closing costs. I often try to bid $100 more then the natural bid. Keep in mind that if you are going FHA your buyer is stuck with the appraisal and will have to come up with any overbid with cash. That can really put a damper on a HUD bid. I know an agent who bid $30 K over and when their client got the bid as a backup they realized this and had to get out of the offer. Make sure you realize that HUD works on Eastern time.
HUD offers are not the same as normal offer. Make sure you know what you are doing. You can really screw your buyer if you don't! It is different not hard. Hit submit offer and wait. You will be waiting for the bid period to end. At the beginning there is a long bid time. After that it is every day. When you expect them to move on your bid check the Hud home store. There is a place to check bids. HUD does contact you if you get the bid.
OK now is when the fun starts. HUD wants original signatures. Yours, your broker and the buyers. Then they want it within 48 hours. If you fail to get everything to HUD in the time allotted they cancel the deal. You become very good friends with one day delivery. Of course they just send you stuff via email and fax. If you have questions call them. They try to be helpful.
When you are making a HUD bid remember the government will make no repairs. They will allow you to inspect the property but you have to pay to re-winterize it and for the gas, water and electric to be turned on. This will cost your buyer an extra $120. What you see is what you get.
Your loan officer has to be ready to close ahead of time. They want the HUD ahead of time and will not take it before or after they want it. Keep track of the dates. Your buyer will pay for a late closing. With HUD every t needs to be crossed and every i dotted. If you are careful you will close your deals.
When dealing with HUD you want an experience agent like me!