Selling HUD Homes

Last month, PEMCO offered a free seminar on selling HUD homes in Sacramento. A HUD home is a one-to-four unit residence acquired as a result of a foreclosure on an FHA-insured mortgage. In California, PEMCO is the marketing and management contractor who sells HUD homes.

After HUD acquires the property, the property is appraised, title issues resolves (if needed), and HUD’s discount sales programs are determined for eligibility.

In order to show or submit contracts on HUD homes, you must be a registered real estate broker who is properly registered with HUD. Homes are first offered to individuals in possession of a Federal Registration number related to disaster relief efforts from Hurricanes Katrina, Wilma, and Rita. They are then offered to owner occupant purchasers with any remaining houses available to all buyers, including investors.

Any licensed agent whose brokerage is registered with HUD can sell and show HUD homes. To register your brokerage, go to hudpemco.com and download the Broker Registration Package (must be completed by primary broker). All forms must be completed accurately and entirely and mailed or delivered to PEMCO’s Atlanta office. Once processed, the brokerage will be sent a NAID Number which is used by all agents in that brokerage to place bids on HUD homes. The entire application process takes six to eight weeks.

NAID numbers must be renewed annually.

When HUD homes are available for sale they are listed on MLS and on the PEMCO website. All new properties are listed on Fridays.

Agents are encouraged to show and advertise HUD homes. Once you have a buyer interested in a HUD home, keys may be obtained by the LLB of the property or by going to the HUD office and providing:

• California real estate license
• Driver’s license or identification card
• The NAID number application to you as either the broker or selling agent

The selling agent is required to have a signed and completed sales contract package, including the earnest money deposit, completed before submitting an electronic bid for a buyer. If accepted, you have two (2) business days to submit the completed Sales Contract Package to PEMCO.

The deadline for submitting a bid for Initial and Extended Listings is 11:59pm, the day prior to bid opening. The highest acceptable net bid will be tentatively accepted on the day bids are reviewed. Bid results will be posted by 1pm.

If a property remains in the market for an extended period of time with no acceptable offers, PEMCO will reduce the price of the property and then re-list it on the market.

The winning bidder must submit a signed, complete and correct sales contract package to PEMCO within two (2) business days of the bid’s official acceptance. Contract packages must be hand-delivered or send via over-night mail to PEMCO’s office.

Once a contract package is received in completion, PEMCO will sign off on the package on behalf of HUD.

If PEMCO received your contract on time, but corrections are required, you will receive a correction notice via fax or email and have two (2) business days to make the corrections and resubmit it via mail or hand-delivery.

At closing, all required paperwork will be reviewed and signed. The buyer will make payment to the closing agent in certified funds, and the closing agent will make payment to the selling broker, HUD and any others necessary. The new owners are required to have the property’s licks re-keyed or changed after the close of the sale.

Now that you know the process to sell a HUD homes, get out there and sell, sell, sell!