Tri Cities Real Estate Market Leaders has been listing HUD Homes for Sale in Tri Cities Washington for over 3 years. We focus on Benton and Franklin Counties in Washington State. Since we have had the Local Listing Broker contract with BLB resources we have noticed a lot of changes in how HUD list homes for sale and its common for agents to submit offers on HUD homes that are not familiar with the process or the updates. If you are planning on Buying a HUD home or if you are a Realtor representing a buyer on a HUD home please contact the Local LLB in you area to discuss the offer process prior to submitting an offer online at the HUD home store so that you can make sure that there are no new updates that may effect the offer process.
Before we go into details about how to submit an offer on a HUD home let me explain what a HUD home is. A HUD home is a 1-to-4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim. HUD then Hires a Marketing and Management Contractor(M&M) by regions that are organized into diffrent sections of the United States. The M&M contractor then hires or sub contracts a Local Listing Broker to cover a county within their region. The Local Listing Broker sings an agreement with the M&M company (Asset Manager) in my case it is BLB resources. Then the Local Listing Broker and BLB resources work together to sell HUD Homes. In Washington State Local Listing Brokers are expected to take Date Time Stamped Inspection Photos and conduct outreach events to local Realtors to teach them how to submit offers on HUD Homes. The Asset Manager (BLBResources) will assign the Local Listing Broker Listings and Expect them to visit the property and take date time stamped photos within 24 hours. Then they will upload the Initial Inspection to a platform (Yardi) so that the asset manager can get an idea what the property looks like. The Local Listing Broker will then take marketing photos and E mail those into the asset managers. After all of the photos are complete the LLB will create a detailed BPO and submit that to the asset managers. The Asset Manager will then hire an FHA Appraiser to visit the property and create a full FHA Apppraisal. (Update: The FHA appraisal is confidential and will not be shared with the buyers for any reason.) After the Appraisal has been completed the Local Listing Broker will return to the home to conduct the Prior to List Inspection to make sure the house is ready to go on the market. The local listing broker has to check for a bunch of diffrent items during this inspections and they have to take date time stamped photos to back up their findings. The LLB has to make sure the house is vacant, clean and that no vandalism has occured. HUD homes are winterized and the power is off so taking photos can be a little tricky depending on the weather conditions.
When the house has been deemed ready to list the Asset Manager will send the LLB a Listing Report leting the LLB know the list price and the the home has been added to the HUD Home Store. The Asset Manger looks at the BPO and the Appraisel to determine the list price for the home. The LLB's next step is to Add the house to the MLS, install the required signs, hang a lock box then submit the home to the LLB's advertissers. This is a critical step since the Asset Manager will audit the LLB every 30 days and ask for compies all of the Ads and how much money the LLB spent advertising HUD Homes. When I list a HUD home I spend about $2,000 a month advertising them. I submit full page magazine ads to Homes and Land and the Real Estate book in 3 counties. That does not incude all of the interent advertising. The Asset Manager like to see the LLB using featured listings on paid account with Realtor.com, Zillow and Trulia. The LLB is required to visit the property every 2 weeks to do a Routine Inspection with Date times stamped photos. They are also required to complete a prior to close inspection with date time stamped photos prior to the home selling.
Anyway, back to submitting an offer on a HUD home. When you are ready to submit an offer on a HUD home visit the HUD Home Store and navigate to the home that you are interested in Bidding on. Before you place your BID make sure the buyer is pre approved and has a pre approval letter for the offer amount and finance type. Then just click on the property and click the submit offer tab. To submit the offer you will need a NAID number. The Naid number does require updates. (To Check the Status of your NAID number visit the HUD home store and click on NAID in the Navigation bard.) After you have entered your NAID number you will only be asked a few quisions and you will be done submitting your online BID.
If your online BID is accepted you are required to get the contract to the Asset Manger within 2 days. To accomplish this the Selling Agent and the Buyers should meet upon finding out that the offer was accepted so that they can creat the contract package that has to be mailed to the Asset Manager. In my case I work with BLB Resources in Washington State. The contract will require you to match your contract with the BID. It is important that if your client bid as an owner occupant that they will in fact plan on living in the residence. The selling agent and the buyer must sign the contract with Blue ink and over night mail the contract back to the asset manager ASAP to make the cut off date for when the contract is due.
After the Asset Manager receives the contract they will check it for errors. If they can not find any errors they will Ratify the contract and e mail all parties a PDF copy upon ratification. Upon recieving the Ratified contract package the selling agent and the buyer will have 2 weeks to complete the home inspection. Two Weeks may sound like a long time but remember these properties have no power and they have no water. So the buyer will be asked to pay the FSM a fee to allow for the water to be turned on so the FSM can re winterize the house after the inspection. The FSM info for Washington State can be found here PKMG Utility Activation Request. The buyer will be required to call the power and the water company to have them turn the services on under the buyers name. IF their are fees for this activation then the buyer must pay those fees. Whenever water is being turned on to a home that has been winterized or vacant for a long period of time greate caustion should be used to ensure no flooding occurs. During the home inspection the buyer can cancel their contract and recieve their EM back as long as they are within the protection period. HUD will not make any repairs to the home and all HUD homes are sold As IS.
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