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Managing Resales
Presenters:Emily Higgins, Burlington CLTEtta Habegger, Thistle CLT
National Community Land Trust ConferencePortland, ORAugust 17, 2005
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Steps in the Resale Process
Before sale: educate owners Sale: owner notifies CLT of sale Price: setting the Limited Resale Price Marketing: finding a qualified buyer Buyer: the sales contract Pre-closing: working with clients, partners
and funding sources Closing: who attends? After closing: data entry, file cleanup
Burlington CLT Started in 1984 through municipal seed
grant Parent organization of a NeighborWorks®
HomeOwnership Center Statistics
Over 350 community land trust homes in three-county area (200 condos, 6 duplexes, 144 houses)
Also have 270 below-market rental apartments, 125 Co-op apartments, and Commercial and non-profit facilities
CLT has over 2,500 membersApprox. 150 resales, 1987-present
Thistle CLT
Part of Thistle Community Housing, a non-profit CDC with homeownership through the CLT and rental homes
Statistics217 homes throughout Boulder County, Colorado
(work primarily in 3 cities)• Scattered Sites - 5 houses, 4 townhomes• Sunnypoint - 15 condos• Buena Vista - 39 condos, 10 townhomes• Mapleton – 135 mobile homes • Inclusionary zoning condos – 9 condos
47 resales, 1998 - present
Working with potential buyers
Criteria: General homebuyer education course
and individual counseling – can be provided by CLT or partnering agency
CLT-specific education - group or individual meetings – include info about CLT model, available homes, eligibility, CLT process
Required application for income verification
Potential buyers - criteria (cont.) Screening process can include income
and asset certifications CLTs can require minimum available
funds and investment in home Financing - buyer qualifies with lender
(may include down payment assistance programs)
CLTs can restrict buyers to first-time buyer or not owning other residential property at time of CLT purchase
Beginning the Resale
Homeowner informs CLT they want to sell CLT sends template letter explaining
process Must have written notice of intent to sell;
clear expectations re timing are helpful Structure: CLT can purchase directly from
seller (elect to exercise purchase option). If not, then sale occurs directly between seller and qualified buyer.
Sales Price
CLTs may structure their resale formulas in a number of ways, e.g.• Appraisal based• Index based• % increase
Qualified capital improvements may be allowed
The CLT may take a Lease Reissuance Fee Realtors’ sales commissions may be
allowed
Price Example - BCLT
Order fair market “fee simple” appraisal to determine current value
Subtract old appraised value from new appraised value to determine appreciation
Option price calculation: BCLT takes fee from appreciation and determines grant and mortgage for new buyer
Appraisal and calculation to seller
Marketing Options
Notify qualified applicants Website with “homes for sale” Flyers, postcards Local papers Counselors, housing and community
partners, homebuyer classes Open Houses, showings of home Current CLT owners and clients
Buyer Selection
Selection process to determine buyer – options include “first come, first serve,” lottery, creating a score based on criteria
Prioritization may include:Income - % of Area Median Income
(AMI)# in householdAbility to secure loanLive or work where CLT home is located
“The Deal”
Sales Contract • BCLT: Sign Tri-Party Purchase and Sale
Agreement (Seller, BCLT, Buyer)• Thistle: Sales contract between Seller and
Buyer; use CLT Sales Contract Addendum Timeframe set for inspection, financing,
closing Details of deal to attorneys, lender,
funders, title company, Realtors (if involved)
Tracking sheets are key
Pre-Closing
Review financing: GFE, TIL, loan app. Inspection: CLT can negotiate repairs
with seller, buyer Identify Resources for rehab needs, e.g.:
– BCLT has stewardship fund (20% of fees) to help with big ticket repairs
– Revolving loan fund for rehab costs Legal document review meeting
Closing
CLT staff should attend Sign legal docs, bring funds if needed,
gift bag to happy buyer! Take copies of all documents signed by
CLT and HUD-1 Proceeds check – deposit
After Closing
Clean up file: have consistent order Summary sheet of the deal Data into tracking databases Notes about buyer for future story? Make sure CLT gets original recorded
documents back! Stay in touch with new owner (e.g.
Thistle does a check in 3 months after purchase)
Tips
Stay organized: have tracking systems and clear procedures
Try to document steps so they can be duplicated: manual, samples
Clear communication about who does what during process: coordination internally, with clients and other partners
Clear policies and process for exceptions : managers, board, committee?
Presenters
Emily Higgins, Burlington CLT, Burlington VT
[email protected] www.getahome.org Etta Habegger, Thistle Community
Housing, Boulder, CO [email protected] www.thistlehousing.org