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Presented byNicole James Real Estate Group
Part of our
Home Buying Orientation
Who are we ?
• Nicole James Real Estate Group is a full service real
estate firm serving Raleigh-Durham, all surrounding
areas of North Carolina and Atlanta Georgia
• Est in 2008, principal brokers – Tiffany Nicole & Gerald
James have sold over 1,000 homes;
• Tiffany - top 1% agent with the exclusive CLHMS
designation; public affairs background; Realtor since 2005
• Gerald - Army veteran, engineering background, & Duke
MBA - extensive experience in real estate & investments
• Developed a team of professional Realtors to best serve
clients in response to the changing real estate market
• Committed to service with an emphasis on
accountability, reliability, timeliness and enthusiasm
• We believe a successful real estate transaction relies
upon the strength of relationships & proficiency of
"getting things done"
• As your buyer’s agent, we will passionately work on
your behalf & provide the best guidance to help
you make the best real estate decisions
Why work with us ?
Strong Team
We are a team of
high-quality
professionals
Maximize Return
As an independent firm, we
can work with you closely
to maximize your return
Integrity
We have uncompromising
integrity & will represent
your best interests
Proven Success
A consistent top
performer
Latest Resources
We utilize the latest
real estate resources
REO, Bank Owned, Foreclosures
• REO – Real Estate Owned aka Bank Owned, different names for Foreclosures
• HUD Homes are a type of REO homes that are owned by the US Gov’t
• At one point were FHA Loans (backed by US Gov’t) that defaulted and were foreclosed by the lender
• The lender than transfer ownership of home to HUD (Dept of Housing & Urban Development)
• HUD place these homes on the market for sale through listing brokers
HUD Basics
• HUD homes can be single family homes, townhouses, condominiums, manufactured homes, or multiple family homes up to four units
• SOLD as-is, no representations or warranties
• Repairs can not be made before closing, no exceptions
Who Can Purchase a HUD Home• Any individual regardless of race, color, sex, religion, national origin,
handicap, or familial status
• Any legal company
• HUD approved nonprofit or Gov’t entity
Purchasing HUD Homes
• Only HUD registered brokers may submit electronic bids for HUD owned properties on behalf of buyers
• All bids are placed at http://www.HUDhomestore.com
• Great opportunity to purchase a home at a discounted price• Almost always HUD properties need repairs and/or updating
• List price on HUD properties are based on an appraisal• However buyers can bid whatever amount they think house is worth
• Unlike online sites, there are no displayed current highest bid
Purchasing HUD Homes
• HUD properties has bidding periods• Availability is subject to the HUD/Asset Manager accepting bids or removal
• Lottery Period – first bidding period available when a property is listed on HUDhomestore.com; only applicable to non-profits & GNND participants
• Exclusive Bidding Period• First bidding deadline for 10-days; no bids are viewed until day 11
• Goes to a daily deadline after day 11 if no acceptable bids
• Only owner occupants can submit bids during the Exclusive Period
• Investors can NOT submit a bid during the Exclusive Period
• Extended Period• Bidding period after exclusive if no acceptable bids – 14 to 30 days
• All bidders including Investors can bid during the Extended Period
Purchasing HUD Homes
• Information needed for Bids• Full legal name
• Mailing address
• Email and contact number
• Bid amount – purchase price & requested closing cost up to 3%
• Bid type (cash, FHA, conventional)
• SSN, EIN, or TIN
• Earnest Money Deposit (EMD)• $500 if purchase price is $50,000 and less
• $1,000 if purchase price is $50,001 - $250,000
• $2,000 if purchase price is $250,001 and more
• Certified check or money order only (no personal checks)
Types of Bidders
• Owner Occupant• Purchase with the intent to live in the property as their primary residence for
at least 12 months
• Cannot have purchased another HUD property as an owner occupant in the previous 24 months
• Misrepresentation is a serious offense that may constitute fraud & an investigation by the Office of Inspector General. Investigations not only will focus on buyers, but also on brokers & agents representing the buyer
• Falsifying information regarding purchaser type is punishable by a fine not to exceed $250,000 and/or prison sentence of not more than two years
• Investor• Buyers who are purchasing a property as a second/vacation home as well as
buyers purchasing the property for reasons other than owner occupancy
Types of Bidders
• Good Neighbor Next Door (GNND)• In certain areas (revitalization areas), HUD homes are offered during lottery
period at a 50% discount▪ Not all properties in the lottery period are GNND eligible; must state GNND
• Requires a second mortgage with no interest payments▪ Must fulfill the three year occupancy requirement as their sole residence
▪ Certify eligibility every year
• Neither GNND candidates nor spouses can have owned any real property in the previous calendar year
• Full-time Teachers, Law Enforcement Officers, Firefighters, or EMT▪ Teachers must serve students from the area where the home is located
▪ Officers employed full time by a law enforcement agency (federal, state, local gov’t)
▪ Firefighter/EMT employed full time by a fire depart or emergency medical services (federal, state, local gov’t) serving the area where the home is located
Financing Options
• Cash, Conventional Financing or FHA to purchase HUD homes
• FHA (Federal Housing Administration) Loans• FHA loans are for owner occupants only - $100 Down Program
• Depending repairs – FHA 203B, FHA 203B with repair escrow, FHA 203K
• FHA 203B w/repair escrow• Money held in escrow for repairs to meet the minimum property standards
• Plumbing, Electric, Heating - Cosmetic Repairs are NOT considered
• Repairs must be made within 90 days after closing in order to be reimbursed
• FHA 203k• Type of FHA loan where you can finance renovation cost into the loan
• Typically repairs needed more than repair escrow allows ($5,000 / $10,000)
• Requires getting work estimate from licensed contractor
HUD’s “AS-IS” Policy
• All HUD homes are sold strictly “AS-IS”
• HUD does not make repairs on any property
• There are no representations or warranties, expressed or implied; no guarantees of condition, regardless of its FHA insurability
• The property may or may not meet local code or zoning requirements. It is the buyer’s responsibility to investigate compliance with local regulations
• A Property Condition Report (PCR) should be reviewed• Information purposes only; not a warranty of any kind
• Buyer’s responsibility to verify the accuracy of its content
• Strongly encouraged to have a home inspection
Home Inspection Policy
• Buyers are allowed a 15-day inspection period upon ratification
• Buyers must get authorization to activate utilities
• NO UTILITIES ARE TO BE ACTIVATED WITHOUT PERMISSION
• Utilities activation and expenses are the buyer’s responsibility
• Refer to the EMD Forfeiture policy should a buyer be dissatisfied with home inspection results
• All inspections & fees are at the cost of the buyers & will not be refunded should the buyers are dissatisfied with home inspection
Earnest Money Deposit Forfeiture Policy
• Investors• Forfeit 100% of EMD for failure to close regardless of reason
• Owner Occupants• Refund of EMD for the following circumstances:
• Death, serious illness or significant medical expenses in immediate family
• Loss of job by one of the primary breadwinners or substantial loss of income through no fault of the purchaser
• Other good cause as determined by the HUD / Asset Manager (AM)
• Forfeit 100% of EMD for the following circumstances:
• No documentation is submitted
• The documentation received fails to provide an acceptable reason for buyer’s failure to close
• The documentation is not provided within a reasonable time following cancellation
Extension Policy
• If closing does not occur on or before the specified date, an extension request has to be made at least 5 days prior to deadline
• Supporting documentation such as a lender letter is required
• Each extension, if approved, are for a period of 15 days
• An extension fee is required with each request – up to $375
• For owner occupants, the initial 15-day extension fee is waived
• Extension fees are non-refundable, however if closing occurs in less the 15 day period, the unused portion will be credited to the buyer
• Approval of an extension does not obligate HUD /AM to approve future extensions