Presented by Nicole James Real Estate Group...REO, Bank Owned, Foreclosures •REO –Real Estate...
Transcript of Presented by Nicole James Real Estate Group...REO, Bank Owned, Foreclosures •REO –Real Estate...
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