HUD Real Estate Agent Contract Confusion?

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Often when an agent is selling a HUD they don’t appreciate there are completely different contracts to fill out. Knowing this is essential in advising your client with the most productive contract review process. HUD has specific contracts that are unique to your state standard forms.

How Will Your Buyer Be Holding Title? Line Item #2 on the Housing And Urban Development contract asks for how your buyer will be holding title. While in the past this often could be left blank until your buyer decides, this has changed and the best procedure is to discuss this with your buyer prior to submitting your offer and enter in to the contract how they’ll be holding title. Common ways of holding title can be found by calling your local title company.

Repair Escrows On Line Item #4 This is an unpopular area. Most realtors perceive this as the total cost of escrow but it has nothing to do with the “escrow” at all. I’ll make it simple. If using FHA financing you’ll need to ascertain via the HUDHomeStore website to see if the home you are bidding on requires a repair escrow. Repair escrows are called for when using FHA lending. Any repairs mandated under $5000 require a 203b repair escrow. Any repairs called for over $5000 are a 203k repair escrow. If you aren’t using Federal Housing Lending then the 203b or 203k area doesn’t apply. ONLY if you are using FHA financial support do you need to fill this section out. Even if the property has a repair escrow on it and you are using non-FHA financing then you need not worry about this section. Check the box “seller is paying cash or applying for conventional or financing not involving FHA” and begin.

Earnest Money Procedures on Line Item #12. This line corresponds to the processes and rights HUD to your EMD when your consumer fails to perform. The most misconceived part is that there are two lines on which call for initials and those lines are confusingly close to one another. Time and again, if there are married purchasers on the contract, an agent will have one consumer initial a single line and the other on the following line to the right. Wrong. Confusing for sure. Correct, no! One is a “buyers initials” line and the other is reserved for HUD’s “authorized agent”. Execute both of your buyers initials on the first line set aside for “purchaser”. Be cautious as this will get your contract rejected if you fail to execute these lines properly.

What are some everyday mistakes you see other newly licensed brokers make?

Learn more about getting started as a real estate agent. Stop by Len Dietrich’s site where you can find out all about a real estate academy and what it can do for you.. Check here for free reprint license: HUD Real Estate Agent Contract Confusion?.

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Tags: getting started as a real estate agent, hud.gov, Real Estate, real estate academy, Real Estate Agents, real estate broker, real estate brokers, real estate training, selling real estate, short sales

Article Citation
MLA Style Citation:
Dietrich, Len "HUD Real Estate Agent Contract Confusion?." HUD Real Estate Agent Contract Confusion?. 5 Feb. 2011. uberarticles.com. 24 Apr 2012 <http://uberarticles.com/real-estate/hud-real-estate-agent-contract-confusion/>.

APA Style Citation:
Dietrich, L (2011, February 5). HUD Real Estate Agent Contract Confusion?. Retrieved April 24, 2012, from http://uberarticles.com/real-estate/hud-real-estate-agent-contract-confusion/

Chicago Style Citation:
Dietrich, Len "HUD Real Estate Agent Contract Confusion?" uberarticles.com. http://uberarticles.com/real-estate/hud-real-estate-agent-contract-confusion/

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