Thread: Ofori HUD REO Property Training - How to List and Sell HUD Homes

Below is all the information from the recent HUD REO training call with Ofori that is a great resource if you are looking to learn more about HUD homes.

This presentation is being conducted by Ofori & Associates,
REO and is intended for sole use of the Ofori Neighborhood
Listing Broker network. The intended users are Ofori &
Associates personnel and approved real estate listing
brokers and sales agents in the Ofori Neighborhood Listing
Broker network. Information in this presentation is subject
to change at any time by the Ofori Quality Control staff.

}Separate contractors responsible for property management and
marketing/sales
}One web site for everything -HUDHomestore.com
}New Broker registration process
}New Commissions 50/50 Split for Listing Broker and Selling Agent
(up to 3% each)
}Exclusive owner occupant bid period changes
}Earnest money submitted with the contract

Mortgagee Compliance Manager (MCM)
}Performs a variety of pre and post conveyance
services to protect HUD s interests.
}Reviews the title package to ensure that the title is
clear of any known encumbrances.
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Field Service Manager (FSM)
}Contractors that provide property maintenance and
preservation services such as:
- Perform Initial Cleaning
- Conduct Inspections
- Secure Properties
- Conduct Routine Maintenance and Repairs
- Contact to activate utilities

Asset Manager (AM)
(i.e., OFORI, PEMCO, HOMETELOS)
}Markets and sells HUD properties
}Selects Neighborhood Listing Brokers and assigns Listings
}Reviews all bids submitted through HUDHomestore.com
}Serves as your main contact in every HUD sale
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" Newest Asset Management Contractor selected by
HUD to market and sell its single-family homes.
"Ofori & Associates, PC is the parent company of
Ofori & Associates, REO
"Ofori & Associates, PC was established in
1991as a CPA and management consulting firm
in Washington, DC.
"Offers a full scope of accounting, auditing,
financial, computer design and automation
support services to a wide range of clients.

Atlanta, GAHartford, CT
For Contract Areas 1A & 2AFor Contract Areas 2P & 3P
2000 RiverEdge 10 Columbus Blvd.
rd
Parkway3Floor
Suite 300Hartford, CT 06106
Atlanta, GA 30328
860.246.7700
770.955.5880
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Ofori Contract Areas Include: 1A, 2A, 2P, and 3P
Total: 25 States, plus Puerto Rico and USVI

A HUD-owned property. . .
}had a FHA insured loan,
}was foreclosed by the lender,
}lender transferred ownership to HUD in return for
payment of the insurance claim.

- Listings & Bids
- Property Listings & Bid Results
- Click on State
- Search by city, zip code or Property Case Number
Øwww.hudhomestore.com
ØMLS
HUDHomestore.com is the FINAL word!

You can click on the state or use the Search  function
to locate HUD homes.
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" Myth: HUD Homes are low-end housing.
" Fact: HUD homes are available in a variety
neighborhoods, condition and prices ranges.
" Myth: HUD Homes are not worth the low-end housing.
" Fact: HUD homes are offered at fair market value
based on a recent appraisal.
"Myth: HUD will pay for you to totally
remodel and update your HUD Home.
"Fact:HUD Homes are
SOLD AS-IS

ü HUD does not make or offer warranties or guarantees on a
property.
ü HUD will not make any repairs to the property after the
property has been deemed safe secure and marketable.
ü Buyers are strongly encouraged to get independent home
inspections.
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1. Owner-Occupants
2. Investors
3. Government Agencies & HUD Approved
Non-Profit Organizations

"Owner Occupants
q Given priority during certain bid cycles
q Must occupy the house for 1 year
q Cannot participate in future HUD sales for 2 years
"Investors
q Cannot bid until Day 31
q No restriction on purchase quantity
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"Government Agencies & HUD Approved Non-Profits
q Programs designed to stabilize and revitalize
communities by offering special incentives to
home buyers.
q The Good Neighbor Next Door (GNND) program
offers firefighters, EMTs, police officers and
teachers significant discounts for purchasing
homes in in designated revitalization areas.

"HUD offers 50% discount off of the list
price to eligible buyers.
"Buyer cannot own another home for one
year after closing.
"Buyer must occupy home as primary
residence for a period of 3 years.
"Eligible participants must work in the
same area as the location of the home.
"Properties must be located in HUD
designated revitalization areas.
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" Buyer must bid 100% of the list price.
"Can utilize any type of financing or cash deal.
"When using FHA &
"Buyer must qualify for entire contract amount prior to discount
"Can finance into mortgage all reasonable and customary
closing costs
"HUD will not pay any closing costs or real estate commissions.

Ø Special incentive program to sell HUD foreclosed
homes for owner-occupants only.
Ø Available to owner-occupants who qualify for FHA
financing.
Ø Property does not have to be in a revitalization area
Ø Buyer must live in the home as primary residence.
Ø Excellent program for first-time homebuyers.
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Ø Market and sell Ofori property
listings;
Ø Real estate professionals who know
the communities they serve well;
Ø Act as Ofori representatives in the
community; and
Ø Partner with our Outreach Marketing
Team to organize and present
community outreach programs.

Core NLB Roles & Responsibilities. . .
An Ofori NLB is expected to have:
üExperience in listing single-family homes
ü Extensive knowledge of the neighborhood of the listed homes
ü An office in close proximity to the listed home.
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Core NLB Roles & Responsibilities. . .
An Ofori NLB shall provide and maintain:
ü At all times, Monday Friday from 8:00 AM 5:00 PM, a designated
administrative person to take listings assignments, issue timely performance of
required tasks and track the progress of listings, contracts and closings.
ü At all times, 7 days a week, from 8:00 AM 5:00 PM, a licensed real estate
agent available to accept calls from interested parties and other real estate
agents and give appropriate information on all listed homes.
ü A designated administrative person to respond to emergency calls at all times,
24 hours a day, 7 days a week

Core NLB Roles & Responsibilities (Cont d) . . .
ü Prepare Broker Price Opinions (BPOs) and input it in Ofori s database within 48
hours of listing assignment.
ü Enter listings into MLS and other advertising and marketing media
ü Complete 3 key inspections:
§ Initial Inspection Report within 24 hours of assignment
§ Ready to List Inspection Report, and
§ Ready to Close Inspection Report (not sooner than 5 days prior to closing).
ü Answer inquiries relating to the listed properties
ü Perform all other customary duties required from the listing date until post
closing.
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Ofori NLB Scope of Work Highlights
Property Valuations: Preparing the Listing Broker Opinion
"Comparable Sale and Listings Selection Criteria
" Similar Property style, age, type of property, site, condition, etc.
" Close Proximity within subdivision and/or up to one mile depending on
market (i.e., urban, rural, etc.)
" Recently Sold within 6 months or within 90 days for declining market.
"Adjustments
" Market Driven
" Based on value not cost

Ofori NLB Scope of Work Highlights
Tips to keep in mind when preparing property valuations. . .
Ø Basement area does not count as gross living area (GLA)
Ø Bedrooms and baths in basement are not included in the bed/bath count
Ø Similar properties include type of property. (Ex., comparable sale
selection for manufactured housing should only be other manufactured
houses in most cases.)
Ø FHA REO Appraisals are valid for 120 days from effective date of
appraisal for lending purposes. If the M&M Contractor s Appraisal has
expired, the lender is required to request a new one and the borrower
may be charged for a new FHA As-Is  appraisal.
Ø Ofori & Associates does not provide updated appraisals for lending
purposes.
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For a full description of Ofori NLB Roles
and Responsibilities and
Scope of Work, go to
www.oforireo.com
and click Brokers  tab.

This is the second half because it didn't fit in one post. Enjoy..

Ø Go to www.oforireo.com
"Click on Brokers  tab.
- Click on Neighborhood Listing Brokers  for
registration link.
Ø Read the instructions.
Ø Complete the forms.
Ø Send to Ofori.
Ø Can take up to 30 days to process.
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Note: Currently not accepting new NLB applications, however this is how the process
works . . .
Ø Go to www.oforireo.com
"Click on Brokers  tab.
- Click on Neighborhood Listing Brokers  for
registration link.
Ø Read the instructions.
Ø Complete the forms.
Ø Send to Ofori.
Ø Can take up to 30 days to process.

Procedures
Neighborhood Listing Brokers
Industry Meetings
Closing Agents
Forms

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NAID = Name Address Identifier
Ø To apply, go to www.hudhomestore.com; send your completed
package to the area HOC for processing not the AMs.
Ø If you are an Agent and don t know your NAID number, ask your
Broker.
Ø If you are a Broker and don t know your NAID, click on the
Check Current NAID Registration  status button and enter your
company SSN/EIN or call your HOC.

Ø You must have a NAID in order to submit bids.
Ø Allow sufficient time to process your NAID
application; it could take 4-6 weeks.
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FHA Loan Financing Codes
CodeDescription
INInsurableAppraisal indicates the property
meets 203bminimum property
requirements (MPR), finance
requirements, no obvious repairs
necessary.
IEInsurable with EscrowProperty eligible for 203b FHA
loan; necessary repairs total less
than $5,000.
UIUninsurableAppraisal indicates property does
not meet minimum property
requirements (MPR) and/or
requires more than $5,000 in MPR
repairs.

" Any licensed real estate agent can show any available HUD property.
"HUD registered listing brokers or selling brokers may advertise
HUD properties and hold open houses. However you must first gain
approval from the appropriate Asset Manager to do so.
" All brokers and agents must adhere to advertising and showing
guidelines.
" Non-compliance could result in your brokerage s NAID number
being suspended!
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"All agents must sign-in when showing a property.
"All advertising should be done in a professional ethical
manner.
q Do not destroy, damage or remove the advertising
signage of another HUD-registered selling or listing
agent on a HUD property.
"Do not false advertise by implying that you or your company
is HUD or a division of a Government entity.

"Do not refer to HUD properties in a negative manner
(i.e., Distressed , Foreclosed , Must Sell , or Repossessed ).
"Acceptable References to HUD Homes include &
HUD-Owned , HUD Acquired  or For Sale 
"Only an Ofori NLB can place signage in an Ofori property s yard.
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"Do not refer to HUD properties in a negative manner
(i.e., Distressed , Foreclosed , Must Sell , or Repossessed ).
"Acceptable References to HUD Homes include &
HUD-Owned , HUD Acquired  or For Sale 
"Only an Ofori NLB can place signage in an Ofori property s yard.

" HUD Homes can be purchased by any qualified buyer. Decisions are
not based on: race, color, religion, national origin, gender, handicap
(mental or physical), sexual orientation, familial status or disability.
"Always adhere to federal, state, county city and real estate
commission advertising regulations as well as the Truth in Lending
Act when advertising HUD listings.
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Ofori & Associates, REO
Q & A
www.oforireo.com | 877.331.4391

}Go to www.hudhomestore.com
}Print the confirmation page.
}Ensure that the information on the bid sheet
matches what is entered on the contract.
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Earnest Money
How much $$ is needed?
}$500 if sales price is $50,000 or less
}$1,000 if sales price is over $50,000
}50% of Listing Price for vacant lots
}Earnest Money forfeited or refunded in whole or part for failure to
close.

Earnest Money (Cont d)
What to do with the money?
}Funds are to be submitted with the contract.
}Funds need to be in the form of a cashiers
check, certified check or money order made
payable to: HUD
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}IMMEDIATELY Notify Ofori when a deal falls
apart!
}NEVER allow anyone to perform any work of any
kind before closing!
}DO NOT give a HUD key to prospective purchasers
or inspectors.

NO REPAIRS
BEFORE
CLOSING!

COMPLETE
THE CONTRACT
FIRST!

Properties list daily!
Ø Lottery Properties 7 calendar days for special buyer types
(ex., GNND, HUD Approved Non-profits & Government Agencies)
Ø New Listings
§ Insurable & Insurable with Escrow
o 30 Days - Exclusive Owner Occupant Bidding
- 10 Days - Sealed Bidding
- 20 Days Daily Bidding
(Opened simultaneously)
o All Bidders allowed on Day 31
§ Uninsurable
o 5 Days Sealed Exclusive Owner Occupant Bidding
o All bidders allowed on Day 6

To check results, go to www.oforireo.com
- Listings & Bid
- Property Listings / Bid Results
- Choose State
- Real Estate Agent Corner, Click Bid Results 
When are bids opened:
- If your bid is listed in Bid Results , Ofori must receive the completed
contract and all addenda within 2 business days of the announcement.


"Review your contract package to ensure everything is correct
before submitting it.
"Feel free to contact the NLB assigned to the property to ask
questions you may have before sending in your contract
package.
"The role of an Ofori NLB is the help ensure that contracts get
submitted correctly the first time.

Forms can be downloaded from. . .
www.oforireo.com
Ø Sales Contract Forms fillable in PDF format
Ø Most required Addenda
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Atlanta, GA Hartford, CT
For Contract Areas 1A & 2AFor Contract Areas 2P & 3P
2000 RiverEdge Parkway10 Columbus Blvd.
Suite 3003rd Floor
Atlanta, GA 30328Hartford, CT 06106
770.955.5880860.246.7700

If you use overnight delivery service. . .
Ø Keep the air bill or tracking number.
Ø Track delivery progress on the delivery service
company s web site.
Ø If you have tracking problems, call the delivery
service company to verify delivery.
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DON T PANIC!
GET YOUR TRACKING NUMBER AND
CALL OFORI BEFORE THE DEADLINE!!!

Correction
must be received within
24 hours!
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Ø Ofori sends a letter with the contract indicating who the Closing Agent
will be.
Ø OFORI, as HUD s representative, keeps the original.
§ A copy is sent to the Sales Agent.
§ A copy is sent to the NLB to add info. to MLS.
§ A copy is sent to the Closing Agent.

Don t Ask Closing Agents
to do what they are not
supposed to do!
ØClosing Agents are under contract with HUD, with contractual
obligations and restrictions.
ØDon t ask to change names, extend closing dates, etc. without
documentation and Ofori approval.
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ØContact your local Ofori office for specific requirements.
ØWrite Amendment  on the top of the contract (9548) or
addendum:
- state what the contract currently says,
- state the requested changes, also
- include the phrase All other terms to remain the
same. 
ØThe document MUST be signed by everyone involved in the
transaction (i.e., Broker, Agent, ALL Buyers, etc.)

Ø Send the document with the proposed changes
to Ofori.
Ø Ofori will:
1. Review the request,
2. Sign the document, if approved, and
3. Send copies to both the Broker and the
Closing Agent

IMMEDIATELY
after the need for the change is
identified!

Closing Timeframe
All sales are expected to close within
45 days
(For all contracts in 2P and 3P)
(Line 9 of the contract)
60 days for 203K FHA Loans (For 1A and 2A)
after the date Ofori signed the contract.
But things happen sometimes . . .

Extension Requests
Send to Closing Agent . . .
Ø The Request For Extension of Closing Date  form
Ø The appropriate documentation
Ø The Closing Extension Fee
BEFORE THE CONTRACT
EXPIRES!

Extension Requests (Cont d)
" Ofori & Associates, as HUD s Representative, may grant an extension of
closing time in increments of 15 days.
" Extension Request and all supporting documents need to be to HUD s
Closing Agent no later than 48 Hours prior to expiration of the sales
contract.
Contract Sales PriceExtension FeeCost Per Day
Equal to or less than $150.00$10.00
$25,000
$25,001 to $50,000$225.00$15.00
Over $50,000$375.00$25.00
Some Approved Fees Waived.
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On Day 46
WITHOUT AN APPROVED EXTENSION,
THE CONTRACT IS DEAD!

Effective April 1, 2011 HUD is offering a broker bonus to
selling brokers for properties that close in:
"30 calendar days of the date the Sales Contract is executed for
properties in Georgia
"40 calendar days of the date the Sales Contract is executed for
properties in Illinois and Indiana.
$500 Bonus $750 Bonus $1,000 Bonus
for Sales Price Betweenfor Sales Price Between for Sales Price of
$25,000 and $75,000$75,001 and $150,000$150,001 and Above
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The following conditions must be met in order to receive the
broker bonus:
"Preliminary bid must be submitted on or after April 1, 2011
"A loan or commitment letter from lender must be submitted with
the sales contract if purchase is to be mortgaged, or if paying cash,
a certification letter from a financial institution stating sufficient
funds are available to complete the sale.
"The words  Broker Bonus  must be written or typed at the top of
the signed Sales Contract.
"The selling broker must complete and sign the HUD Notification
regarding the broker bonus sales initiative.

ü Contact the FSM prior to doing inspections.
ü Encourage homebuyer to get an independent
home inspection within first 15 days after
contract ratified.
ü Check our web site REGULARLY for news and
important messages.
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Ofori & Associates, REO
Thank you for being here!
We look forward to working with YOU!
www.oforireo.com | 877.331.4391

Ofori NLB Training. Enjoy!!

Our specialty is not selling the HUD listings, that is all of the members of this real estate forum. However, we do provide an app that will assist you in keeping track of your inspections! Check it out, it's free.

I haven't actually got involved in HUD homes. I list Fannie properties. Is the commission structure good on HUD properties. I believe the old HUD program paid no commission or something so minimal that nobody ever wanted to work with them.

Would love to get Ofoir HUD properties. I need to spend some more time going after more REOs. Sometimes you get so busy with the REO work that you have that you forget or don't have time to get more of them.