frequently-asked-questions

Enter Your Search Terms below or click on the applicable category to review a list of our frequently-asked-questions (faqs).

  • 1. Property Management
  • 2. About WILMOTH
  • 3. Bank Owned Homes
  • 4. Buying
  • 5. Fannie Mae Owned Homes
  • 6. Realtors
  • 7. HUD Owned Homes
  • 8. Leasing
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  • 1. Is there a Code of Ethics to guide property management operations?
     

    As members of the National Association of Residential Property Managers (NARPM), our company participates in regular Code of Ethics training.  These are the standards of membership for  the largest residential property management organization in the world.

    WILMOTH Group has signed a statement that WILMOTH will operate under the standards of the NARPM Code of Ethics.  This commitment includes the highest standards of ethical practice toward the public, our clients, their tenants, the care of your properties, and protection of your funds.  We also commit to promote high standards of business ethics, professionalism, and fair housing practices.

    Our Code of Ethics commits to Standards of Professionalism to:

    • Protect The Public
    • Not Discriminate
    • Uphold our Duty to our Clients
    • Commit to certain Tenant Obligations
    • Care of Each Managed Property
    • Protect all Funds in our Possession
    • Provide Truth in Advertising

    Do you prefer to hire a manager that has been educated and subscribes to a Code of Ethics?

    WILMOTH Group makes ethical operations a keystone of our business.

    Want to know more?  Read the NARPM Code of Ethics and Standards of Professionalism, subscribed to by WILMOTH Group.

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  • 2. What happens if I need a distribution outside the normal monthly time?
     

    No Problem!  WILMOTH understands your needs for distributions may not always fit a pre-defined schedule.

    We know that sometimes the funds are not available at the normal distribution date, but maybe they are a week or two later.   Just send us a request in writing (email is fine) and we will send you your available funds whenever they are needed!

    In the same manner, if we have a large bill we have to pay for your property, and the reserves do not cover it, we might request you to send us more money at other times in the month.

    After all, we are partners in this venture, and the schedule sometimes needs to be broken!

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  • 3. Does WILMOTH Have A Monthly Distribution Schedule?
     

    WILMOTH processes the receipt and accounting of funds the same way every month to follow this distribution schedule.

    1st - 5th of month- Management Fees for previous month are applied

    5th- 10th of month- all outstanding bills on properties are paid

    10th to 13th of month- final review of each owner's statement

    By the 15th of the month- Monthly distributions are electronically sent to each owner's bank account

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  • 4. Do You Require A Reserve Balance? How Is It Managed?
     

    Yes, we do ask our owners to keep $300 in reserve for emergencies and incidentals associated with maintenance of the property.

    Specifically an Owner will agree to submit an initial $300 per unit managed and to maintain a $300 balance in the Reserve.  The Reserve is only to be used for emergencies, minor maintenance requests, and other incidentals.

    Without the prior written consent of the Owner,  WILMOTH may also make ordinary repairs and alterations (provided the expenditures for any one item of repair or alteration shall not exceed the sum of $300.00).  Under circumstances that WILMOTH reasonably considers to constitute an emergency, the Reserve funds may not be adequate and the Owner will be asked to replenish the account and reimburse WILMOTH.

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  • 5. What if a tenant is placed in my property and they quickly need to be evicted?
     

    As hard as we attempt to screen all applicants (with credit, employment, previous rental and criminal history reports) there are no guarantees that your new tenant has a history that predicts future performance. When all of our screening is not enough, and we evict a tenant within the first six months of tenancy, WILMOTH protects our owner clients with an EVICTION PROTECTION GUARANTEE. Simply, after the eviction is completed, WILMOTH will NOT charge a new Finder Fee to locate a new one!

    We want to avoid evictions at all costs. We offer this GUARANTEE to move a lot of the risk from our clients to us if the tenant does not work out.  It also means we have skin in the game, with you, in selecting the best tenants.

     tenant-screeningHow WILMOTH Tenant Screening Reduces Evictions

    Life as a rental property owner can be either sweet or sour and it usually starts with the people who occupy your property. When we are renting a property it is always exciting to be told by a potential tenant that they wish to complete an application for rent. The application process is a most important step to determining whether or not to enter a lease.

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  • 6. What happens when there is a tenant emergency with my house and it is outside normal business hours?
     

    24 hour securityWILMOTH managers recognize that your tenant's do not want to be left stranded with no heat, a broken pipe, or any other tenant emergency that can cause damage or discomfort. Of course, as an owner, you want to know your home is protected. How we provide trained, professional, service on holidays and the middle of the night is one of the areas where our solutions provide clients unique service.

    We are affiliated with an after-hours emergency dispatch service.  In the rare event of an after-hours tenant emergency,  tenants are provided a toll free number to call.  This number is NOT just a answering service, but trained property managers with detailed instructions from us as to how to service all tenant emergencies, and a directory of all of our contractors. This service means you are NOT depending on your manager to be able to answer the emergency call when they are sleeping or on a lake boating. It also means professionals are taking the tenants calls and assisting them. Often assistance is simply just providing instructions to stop the damage, or flip a breaker! If the trained manager determines the issue is a tenant emergency worthy of after-hours service (and costs) they will dispatch help immediately.

    Tenants Reading This- our after hours service line is 1-855-559-5525.

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  • 7. How Easy Is It For Me To Monitor The Performance Of My Property?
     

    Very! We offer a web-based owner portal that you will gain access to when you first sign up with WILMOTH. When you log in, you will be able to see information on your properties, and multiples of different financial reports that will allow you to see performance on as frequent of a basis as you desire! The really great part of this owner portal is there are over 20 different reports available to allow you to see your investments in many, possibly new, ways. These reports may be printed or saved as a pdf file on your computer. Updated daily, and always available, WILMOTH transparency starts with your Owner portal!

    WILMOTH Manager Owner Reports

     

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  • 8. What is your process of documenting the condition of my home at tenant move in?
     

    The tenant move in process allows us to make every effort to demonstrate and document the condition of your property.  We also stress to all owners that a home should first be in move-in condition so this process is one of demonstrating and not documenting.  Nevertheless, there are likely to be items found during the move-in.  The tenant should be made to feel comfortable that reasonable items found in the first week (this is a variable measure-whatever seems adequate) should be reported.  Unless it is considered move-in damage, the tenant should feel comfortable that the owner will repair the item and it not be considered their responsibility or potentially something to be offset with their deposit.

    Most importantly, the move-in inspection allows for documenting the condition of the home.  We keep this record, along with photographs we take prior to the move-in to have an accurate representation of the condition of your home before we gave the keys to the tenant.

    To learn more about our move-in process:

    tenant move in

    The Tenant Move In

    The tenant move in process we have created and reformed through the years allows us to accomplish two important objectives:

    1. Note and document the move-in condition for later reference

    2. Demonstrate the home’s important features to the tenant

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  • 9. What are the timelines for cash flow through my property management account?
     

    When you own investment rental property, your returns are measured in cash flow and appreciation.

    WILMOTH will provide management services with a goal of providing the owner regular, dependable, cash flow.   How do we provide cash flow maintenance?  With documented and reliable systems.

    Cash flow is generated from rent.  Rent is paid by tenants.  WILMOTH will be selective and choose a tenant that will pay and pay on time.  If a problem arises, we will move quickly to remove the tenant and find another one to eliminate down time.

    As those monthly rent payments are received, we systematically process your funds and deliver them to you each and every month.  Electronically to your designated bank account to speed up the process.

    Our cash flow maintenance timelines:
    • 1st – 5th of month- Management Fees for previous month are applied
    • 5th- 10th of month- all outstanding bills on properties are paid
    • 10th to 13th of month- final review of each owner’s statement
    • By the 15th of the month- Monthly distributions are electronically sent to each owner’s bank account.

    Every month..rinse and repeat!

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  • 10. Will I save any money if I bring my portfolio to you to manage?
     

    multiple-property-discountYes you will!  We appreciate clients who decide they want to use WILMOTH for their investing needs and offer discounts.  Unlike some companies, the discounts on management fees are not based on all units being within a specific building or geographic area.  Our discounts are based on units owned by ownership unit or party.  We know that many owners will have properties under different entities.  The key is majority ownership by the client.  If you have a large portfolio, lets discuss how we can facilitate the ownership groups.

    The fee discount starts with six units managed.

    We hope all of our multiple property owners will consider the benefits of working with WILMOTH to increase their returns.

     

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  • 11. What if you find out my tenant is violating the lease?
     

    Tenant-behaviorUnfortunately, tenants break leases.  Several questions are reviewed when this occurs.

    Is this a great, good, or bad tenant?

    Does the tenant realize they are violating the terms of the lease?

    If the tenant is a great or good tenant, they may not be aware they are violating the lease.  If they are a bad tenant the lease violation may be the straw that breaks the lease!

    We occasionally have to place tenants in our "Behavior Modification" program.  The idea with this program is that a great or good tenant needs to be put on notice of their lease violation and given a chance to fix the problem.  Bad tenants do not qualify for this program.

    Examples where behavior modification may be used are making random lease payments, not paying late fees, unapproved pets in properties, or using the back yard as additional parking.  With behavior modification we will:

    Notify- give the tenant notice that there is a lease violation and determine a path to resolution.

    Implement-implement the resolution plan with a strict deadline for remediation.

    Inspect-to determine if the remediation was successful

    The reason behavior modification is only offered to great and good tenants is nine times out of ten it will be successful.  With bad tenants, there is such a low probability of success, rarely is it worth trying to remedy.  The path taken should be to include the violation in the eviction.

    We believe in tenant behavior modification and work with all parties to make it a success!

    Indianapolis Property Management

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  • 12. Is WILMOTH an electronic payment and receipts Manager?
     

    Yes..we have implemented a complete set of options to utilize modern electronic payment systems to expedite and facilitate the ease and flow of all cash receipts and distributions.

    At WILMOTH, our tenants pay their rent electronically.  We utilize an electronic payment system to expedite all financial matters.  Tenants who pay their rent on-line  speeds up the processing of your cash by at least three business days!

    When a tenant enters a rent payment into our system a request is sent to their bank.  In three business days or less WILMOTH either receives those funds, can see that they are delayed for some reason, or receive notice that the tenant has insufficient funds.  Unfortunately, when a tenant has insufficient funds an owner will also see the rent payment entered by the tenant is reversed.  Even with the possibility of a reversal, we know much faster of a problem than in the old days when collections came with paper checks and returns could take up to two weeks to discover!

    We settle all accounts with our owners no later than the 12th of each month.  A distribution to the owner is calculated and processed by an electronic payment via ACH.  Depending on the type of bank account the owner has, receipt of these funds by ACH may take up to three business days.  Owners receive an email immediately informing them of the amount of funds being sent to their bank account.

    No paper checks!  Faster funds delivery to you!

    See our timeline and find out about other types of owner distributions.

     

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  • 13. How much do you mark-up repair and maintenance charges?
     

    vendorsZero!

    Frankly, there are two basic models of property management companies.

    One type of company is truly a contractor offering property management services.  Their revenues are based on the ongoing need for maintenance and repairs at the homes they manage.  They serve as your vendor for anything to do with your home and you pay the manager's prices for their repair and maintenance charges or renovation work.

    The alternative is your manager serves as your advocate to provide maintenance, repairs and renovations at the true market value.  Often you benefit from below market pricing due to the long-term relationship and volumes of business your manager refers to these vendors and contractors. The bids and receipts for payment are available for your inspection.  The process is transparent.  The manager is paid through their management fees or in the case of a vacant home, a separate agreed fee for overseeing the process.

    We believe in transparency and serving as our clients advocate.  We also do not think a system that motivates the manager to perform potentially unneeded repairs and maintenance is in the best interest of the owner.  Therefore WILMOTH will always serve as your fiduciary and find solutions based on your best interests.  Bids and receipts are posted and available for your inspection.  We use trusted vendors who have worked with WILMOTH for many years.  Our fees do not increase by providing maintenance and repairs to your occupied home.

    Of course, it is the owner's choice what type of manager they prefer.  We just like always being transparent.

    Indianapolis Property Management

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  • 14. Why Do You Want To Use Email-Can't We Just Talk?
     

    Please understand that you will get the fastest, and best, response if you utilize email. We work as a team and often your question or request needs to be routed to the right party. We are able to work most efficiently when all parties have access to the written word. We know many people still want to discuss on the phone their questions and requests. We respect that, but we also emphasize that you will get the fastest, most accurate, response when you utilize email.  Sure..we can give you a call.  In fact, we enjoy talking just as much as you!  Your question will likely be answered much faster though if we can utilize our systems and team to research and respond via an email.  Plus, we always have a written record of past discussions.

    If you just have to talk..go ahead and call us. But now you know why we prefer to use email.

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  • 15. Can I expect positive property value creation?
     

    There are two investment components to the strategy of "buy and hold".  One is income derived from the rental of the home.  The second is appreciation of the asset.  Over the last few years, income was the primary component as appreciation in many markets leveled out.  Appreciation is cyclical and local so there is no set assumption as to when that component may create significant value.  Your rental asset though is valued on both components.  A standard valuation of a rental home is not a comparable sales study typically completed by a REALTOR-unless the buyer will be an owner-occupant.

    So, the measurement of the value of your rental home becomes a factor of the successful gross and net income received combined with any increases in your equity.  WILMOTH can certainly be a factor in the improvements in your gross and net income.  We can also make many suggestions of improvements we have seen made to a property that will help appreciation be maximized.

    For more ideas on how to improve the appreciation part of the increased value question, here are a couple of articles we prepared for our owners.  Combine some of the strategies you will read in these articles with strong management practices and you will experience property value creation in a positive measure.

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  • 16. How Do I Find Documents Regarding My WILMOTH Property Management relationship?
     

    Visit the Owner portal at www.WILMOTHManager.com and log in.  Click on the Rental Owner tab.  All of your relevant documents (agreements, leases, manuals, addendums) can be found ready for download.

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  • 1. Is Your Firm Licensed?
     

    Yes, our company and brokers are licensed with the real estate departments in both Indiana and Florida. We have a spotless record of practicing real estate in all locations!

    Indiana License CO19400095

    Florida License- CQ1030093

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  • 2. What industry groups are you members of and do they sanction your performance?
     

    WILMOTH Group is a member of the following industry groups and organizations. Each organization has standards and codes of ethics we adhere to and follow. We believe in the importance of active participation and approval by these organizations.

    Property Management- National Association of Residential Property Managers

    Default Servicing- US REO Partners, REOMAC, REOBrokers.com

    REALTOR Associations- National Association of Realtors, Florida Association of Realtors, Indiana Association of Realtors, Metropolitan Indianapolis Board of Realtors, Realtor Association of Fort Myers and the Beach, Greater Tampa Board of Realtors, Sarasota Board of Realtors.

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  • 1. What is the Corporate-Bank Addendum all about?
     

    Almost all corporate owned properties require an additional document be executed known as the "Addendum". This document is in addition to the signed Purchase Agreement and any counter offers. It carries additional terms unique to purchasing a corporate owned property. Please don't "just sign" this Addendum!  Take time to read it and understand to what you are agreeing.  Most Addendums are highly in favor of the Seller.  The Addendum addresses many loopholes that have been exploited by Buyers in standardized purchase agreement documents. In some cases the Purchase Contract terms may actually be presented on the required contract forms and the Realtor purchase agreement document discarded.

    Addendums typically carry a charge per diem if the property does not close by the agreed upon close date.  If this clause exists it will state that it goes into effect if the fault for not closing on time is on the buyer or lender.

    No changes are allowed to these seller's addendum. Always remember, all contracts are subject to the seller's management approval.

    A deal is not a deal until the documents are completely signed by the seller!

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  • 2. Why do I have to provide a Proof of Funds or a Pre-Approval?
     

    As a standard rule, purchasing bank-owned properties requires making available with your offer documentation that the purchaser either has the funds or is approved for bank financing. When a buyer submits this information with their offer, and their offer is accepted, in general it eliminates the financing contingency of the purchase agreement. Why? Because the point of the requirement is to prove to the seller that the proposed purchaser does not face any problems on completing the purchase-they either have funds or a mortgage pre-approval in place.

    When the proof of funds is provided as cash, then the method for purchasing the property needs to be cash. Please do not come back after the offer is accepted and let us know that your buyer now wants to use financing. If you are the buyer, or the agent representing that buyer, if this occurs please be aware that the seller may choose to cancel the purchase agreement and retain the earnest money due to non-performance under the terms of the accepted contract.

    If you submit a pre-approval and it has a lot of contingencies, or it is very sketchy as to how much of an approval it really is, please be aware that the seller may choose to accept an offer that provides a more solid proof of funds. About the only thing that can cancel an agreement that has been accepted with the type of proof of funds required, is a low appraisal. With bank-owned properties, that is extremely rare since in general they are being purchased at a discount.

    Contract and lender letters MUST specify the type of loan and the LTV the borrower is seeking.

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  • 3. Will a cash offer be looked at favorably?
     

    Cash offers are normally looked upon more favorably than financed offers. Therefore, the banks normally frown upon trying to change to financing. They will not allow mortgage companies or private lenders to be included on the HUD settlement statement if the accepted purchase offer stated "cash" terms. Cash "AS-IS" offers are not contingent upon having the funds available to close or the condition of the property. The buyer should be fully informed that (at a minimum) Earnest Money will be forfeited if they do not close the property. Selling institutions do not consider credit lines to be a form of cash. Credit lines are conventional loans.

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  • 4. How much earnest money must be submitted?
     

    In general, the earnest money deposit (EMD) is negotiable. In the case of HUD homes there are set rules. The HUD rules are actually fairly good guidelines to utilize when making your offer on any bank owned home.

    When bidding on a HUD home a $1,000 earnest money deposit (EMD) is required on all offers for properties listed over $50,000. Under $50,000 requires a $500 EMD.  For vacant lots 50% of the list price is the required EMD.

    A couple of other things to remember when making an offer on a bank owned home.

    Generally, a minimum of 10% is required for cash purchases.

    All Earnest Money Deposits must be in the form of a Cashiers Check or Money Order.

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  • 5. Will I get an answer to my offer over the weekend?
     

    No-unless we are processing responses received on a Friday afternoon. The seller's representatives work normal five day a week schedules and are not available over the weekend. Any offer submitted over the weekend will be presented the following business day. Any offer submitted on line will be date and time stamped. The bank will know when you submitted your offer.

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  • 6. How long does it take to receive an response to an offer?
     

    Corporate sellers may take up to 7 - 10 days to provide a response to an offer.   Please plan and prepare for the  extra time for the seller to respond to an offer. Your offer will be timely submitted. If you have not heard a response by your expiration date and time, we are not ignoring your requests --we simply do not have an answer from the seller. Each Asset Manager representing the corporate owner works with hundreds of properties at any given time and they try to respond timely, but unfortunately, this cannot always be done. As soon as we have a response, we will promptly forward it on to you.

    Also, the listing agent has no control over the corporate seller's decision making process which may affect the time for a response to an offer. On rare occasion they will respond in the first 48 hours. However, more than likely they will respond in 3 to 5 days. Please be patient and resist the urge to call us frequently to check on progress.  WILMOTH Group will notify you immediately when we receive a response. Some corporate sellers will not look at offers until the property has been on the market for 5 to 10 days.  Remember...we all share the same goal of selling the property.  If you have not heard from us it is because we have no update to give you-certainly not because we are ignoring you!

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  • 7. What does it mean that this property is sold as-is ?
     

    When a property is being sold as-is no repairs will be made by seller. No repairs will be made for HUD owned homes. If an inspection contingency is included in the offer, any response should only include any major structural or safety issues over $500 and should include a possible credit amount at closing, along with 2 contractor bids.

    There are no guarantees that any allowance will be given. The properties are already priced assuming repairs are needed.

    If the property is sold "AS-IS"  it should be assumed that some work of some type is needed and the offer should be reflective of this information. The seller realizes that work needs to be done and has already priced the property accordingly.

    Special Notes: Corporate sellers will not accept any contingency on the sale of a buyer's home. Sellers will not pay for Home Warranties. With the exception of HUD owned homes, most of our houses do not qualify for all forms of financing - especially FHA. See our HUD homes section to learn more about using FHA financing for HUD homes.

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  • 8. How does the process of making an offer work with a bank owned property? Do you propose the offer to the lender and they accept, decline or make a counter offer?
     

    We submit the offer like any other property. The bank usually has a threshold of what they can accept based on multiple valuations they have on hand. That price is discounted by the days on market…the longer on market the lower they can accept. They will counter offer unless they consider the offer ridiculous. One mandatory item is that you must have a satisfactory proof of funds.

    The bank will require that all offers be submitted to them on a summary form which is called the "Offer Worksheet." This is aimed at simplifying the process for the Asset Manager, who will more often than not, have a large number of properties under management and often in multiple States with vastly different real estate contracts. This worksheet will have the "basics" only (Price, Terms, Concessions, Closing dates, etc.). The Wilmoth Group prepares this "Offer Worksheet" based from the terms of the purchase agreement we receive.

    Since all offers are submitted to the seller on the worksheet (or online via the "Offer Summary") your counter offer may come back in the "worksheet" format (Simple details of what the bank is willing to accept) or via an unsigned Counter Offer. The Wilmoth Group will respond back to you either verbally or via a counter offer form. Users of the "Make An Offer" system will receive an acceptance, counter offer, or rejection through the system.

    Offers by "Letter of Intent" will not be accepted.

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  • 9. What does it mean that this property is a bank owned home and sold as-is?
     

    When a property is being sold "as-is" no repairs will be made by seller. If an inspection contingency is included in the offer, any response should only include any major structural or safety issues over $500 and should include a possible credit amount at closing, along with 2 contractor bids. There are no guarantees that any allowance will be given. The properties are already priced assuming repairs are needed. In this situation, the seller is not agreeing to make any repairs nor is willing to lower the price for repairs needed on the property. If the property is sold "AS-IS" and no repairs or refurbishments have been made - it should be assumed that some work of some type is needed and the offer should be reflective of this information. The client realizes that work needs to be done and has already priced the property accordingly. Special Notes: Banks will not accept any contingency on the sale of a buyer's home. Sellers will not pay for Home Warranties. Please understand that most of our houses do not qualify for all forms of financing - especially FHA.

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  • 10. When I make an offer, how long does it take to receive an answer?
     

    Sellers may take up to 7 - 10 days to respond to submitted contracts. Please allow extra response time for the seller to respond to offers. Your offer will be timely submitted. If you have not heard a response by your expiration date and time, we are not ignoring your requests --we simply do not have an answer from the bank. Each Asset Manager representing the corporate owner works with hundreds of properties at any given time and they try to respond timely, but unfortunately, this cannot always be done. As soon as we have a response, we will promptly forward it on to you.

    We have no control over the bank's decision making process. On rare occasion they will respond in the first 48 hours. However, more than likely they will respond in 3 to 5 days. Please be patient and do not call to check on progress. The Wilmoth Group will notify you immediately when we receive a response. Some banks do not look at offers until the property has been on the market for 5 to 10 days. Please be considerate, we are all working towards the common goal of closing on the subject property. IF YOU HAVE NOT HEARD FROM US IT IS BECAUSE WE HAVE NO UPDATE TO GIVE YOU- NOT BECAUSE WE ARE IGNORING YOU.

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  • 11. Why do I not get back a signed purchase agreement when I am told my offer is accepted?
     

    A common source of confusion on bank owned homes is what constitutes an actual contracted agreement. All bank-owned properties will give a verbal acceptance only until the bank's specific purchase contract terms (in the form of a bank addendum to the purchase contract) are executed by both the buyer and the seller. There are situations where the bank addendum is not executed and returned in a timely manner to the bank and the bank proceeds with accepting another offer. It is imperative that if you receive an acceptance for a bank owned property that you execute the bank addendum and return it within the demanded time frames. Finally, please understand that no offer is fully accepted until the Seller signs the Addendum package returned to them.

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  • 12. Who chooses the title company?
     

    With the exception of HUD owned homes, the bank chooses. WILMOTH (as listing agent) has no say in the matter either. This is due to the fact that the seller has significant amounts of Title work completed during the Foreclosure process. TITLE COMPANY CONTACT INFORMATION COMES WITH THE SIGNED DOCUMENTS FROM THE SELLER. In all likelihood the Listing Agent WILL NOT HAVE this information prior to receiving this document package. We are waiting too and will forward the information as soon as it becomes available. Continued multiple and/or daily queries slow down the process for everyone involved. Please be considerate, we are all working towards the common goal of closing on the subject property.

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  • 13. What happens with Board of Health fees, unpaid taxes, and sewer liens?
     

    Local Boards of Health do not always timely file liens on properties. The title insurance only covers recorded liens. The title company will make all efforts possible to identify any liens that could cloud the Title. These charges will be paid by the seller at closing in order to provide clear title at the date of closing. It is in the interest of your buyer to check with the local Board of Health to make sure there are no outstanding bills that have not yet been recorded. This is the same with sewer liens. Also, if the subject property is a newer build, it is in the interest of your buyer to check if the assessed taxes are correct.

    Notify the Title Company with written records of any pertinent information.

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  • 14. What happens if there are multiple offers for a property?
     

    If the seller receives multiple offers on a property, buyers may be requested to submit their highest, best and final offer by an agreed upon date and time. This is fairly common and the process is handled a little differently by each seller. In all cases except HUD homes, WILMOTH will communicate with all buyers and provide a deadline to change their offer if desired. With HUD homes all bidding is coordinated through HUD and notices will usually come from HUD or an Asset Manager providing the opportunity to rebid for your buyer at the HUDHomestore.com. With HUD homes please remember, WILMOTH does not have any involvement in the bidding process.

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  • 15. Can I take possession before the closing in order to start making repairs?
     

    Due to liability risks, the Purchaser is not to take possession until Seller has been funded (closing is final). No repairs to be performed by the Purchaser prior to this time.

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  • 16. Do you have any information on a Home Owners Association?
     

    If this is a bank-owned property, HOA information is not routinely obtained. However, if we have information, we will gladly provide it as well as any contact information if available.

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  • 17. Will the owner accept contingent sales?
     

    It is highly unlikely that any bank would accept a contingent sale. If the bank accepts your offer then finds out that the buyer really does need to sell a home in order to purchase (and you haven't disclosed that) the sale will be immediately cancelled. Don't expect to have the earnest money returned in this type of situation.

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  • 18. Will the bank pay for any repairs?
     

    Please understand that this home is being sold "AS-IS." If the bank has rehabilitated the home, their scope of work has already been determined and can not be changed. As a rule, ONLY issues which are LENDER REQUIRED will be addressed. REO Asset Managers are VERY familiar with what constitutes a Lender Required repair and will not approve "cosmetic," "dated", or "wear and tear" related issues. Note: with HUD homes no repairs will be made. These homes are already either approved for FHA financing or they are not.

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  • 19. Can the buyer cancel if they find something wrong?
     

    The buyer has the right to cancel the contract and receive their deposit back if they do so within their contractual time frame (unless specifically noted). Note-HUD Homes are sold as-is. A document called the Earnest Money Deposit Addendum which is a part of the contract package details the terms for return of earnest money. Inspections are encouraged on all homes.

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  • 20. How do I get the utilities on in a property I am interested in?
     

    Any inspection requested by the buyer is intended to be only for buyer's information. We will have utilities turned on to accommodate the inspection (with exception of HUD properties where buyer and agent are responsible and coordinated with the Field Services Manager-FSM).

    If a property has to be de-winterized for the purposes of an inspection, buyer will be required to sign an addendum stating "If buyer does not close on property, for any reason, buyer will be responsible for the cost of having property re-winterized by Seller approved vendor"

    Utilities will be turned on if safe to do so. Depending on the timing of the winterization, it is quite possible that plumbing repairs will be needed and the water may not be able to be turned on. Please keep these factors in mind when making an offer. If an inspector/appraiser is unwilling to turn on pilot lights, main water valve, etc., it is the buyer or buyer's agent responsibility to make arrangements to have them turned on and off again.

    Electricity will be turned off as of the day of closing; please make arrangements to have utilities transferred to the buyer.

    Remember- HUD home procedures for utilities are determined by the FSM.  Please contact the FSM listed with the HUD property and follow their procedures for utility activation.

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  • 21. How To Set Up An Inspection?
     

    It is absolutely essential that you give us 3 BUSINESS DAYS NOTICE PRIOR to scheduling your inspection. Some utilities (such as electricity) will likely be on prior to your making an offer, others will not (such as gas or propane) The Listing Agent has NO control over the work schedules of the local utility companies. As such the Listing Agent will not be responsible for re-inspections and/or associated fees. It is not a bad idea to visit the property a day PRIOR to the inspection to check if systems are on and working.
    NOTE: Purchases of HUD homes require a different process for inspections of which we are not involved. If you need to set up an inspection for a HUD home ratified contract you will need to coordinate it with the Field Services company (FSM). They are the only party who can authorize utility activation and approve access for the sales agent, their buyer and the inspector.

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  • 22. Can the buyer complete an inspection?
     

    Just like any other sale, your buyer has the right to fully inspect the property within the frame of the inspection contingency of the purchase agreement. Seller will not order or pay for any inspections.

    The seller, or our company, will not approve any pre-contract inspections. Additional utilities will not be turned on, de-winterizations will not occur. Radon tests will not be performed etc. This is the purpose of the inspection contingency. Assess the property the best you can in the condition it is in (everybody else will be looking at it the same way). Negotiate a successful offer and include an inspection contingency. Then you can complete an inspection and address anything found under approved conditions in an inspection response.

    HUD-owned homes inspection procedures are coordinated with the Field Services company only AFTER the HUD purchase agreement has been ratified (executed) by HUD.

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  • 23. What are realistic time frames to complete the transaction?
     

    Generally you will have 30 (to 45) days from mutual acceptance to close the transaction.

    Often the proposed closing date on the original offer is unrealistic due to the elongated negotiation and acceptance process with the seller. The seller's Asset Manager knows that you can't close in a week and a half (unless your offer is cash).   Asset managers know that appraisals, inspections and the loan process take time.

    They will assume that you have taken the time prior to making an offer to become pre-approved for the loan and that there will be no trivial delays beyond the 30 (to 45) day closing period.

    Read the Seller Addendum carefully – there is often a per diem late fee assessed for tardy closings. The corporate seller will not suffer delays due to the purchaser's lender not performing in a timely manner. Begin your inspections upon being alerted that your offer is accepted.

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  • 24. How can I make sure my offer is received?
     

    Realtors-You will receive an email confirmation within 24 hours of submitting your offer. For HUD bids at HUDHomestore.com make note of the confirmation number you receive immediately after submitting the bid.

    Buyers Not Represented By a Realtor- You will receive an email confirmation

    Multiple offers normally result in a request for a highest and best offer. Escalation clauses will not be accepted by the banks.

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  • 25. Why are some sellers requiring "pre-approval" from their lending divisions?
     

    Some Bank Sellers are starting to request buyers to get pre-approvals from their own lending institution. They are having many transactions fall apart due to buyer credit issues. All offers accompanied by a pre-approval will be presented regardless of the source of the pre-approval; however, it is up to seller as to how they view the pre-approvals. Some will reject your offer if their lending areas have not reviewed and issued a pre-approval. We recommend you play the game by their rules.

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  • 26. I am working with a buyer who does not have a Social Security number. Can they place a bid or make an offer?
     

    If your buyer does not have a Social Security number, they will need to have a Taxpayer Identification Number (TIN). These are commonly applied for and issued to non-US citizens who have business or personal interests in the United States that would require paying taxes. The Selling Agent will need to enter the TIN in the same format as a Social Security Number would appear (xxx-xx-xxxx). If they win the bid, the bidder will be required to provide a copy of the letter issued by the United States government assigning them the TIN with the rest of the contract package.

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  • 27. Can I assign the purchase contract after it is accepted?
     

    No - Corporate sellers do not allow assignments of contracts.

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  • 28. Will the bank allow repairs required for our mortgage before we close?
     

    NO!  Sorry..we have never seen any owner, corporate or one with sense and a good advisor, allow a potential buyer complete repairs required for a mortgage prior to closing. That is just a really bad idea. Your best hope is the seller will make some repairs that are needed to close. With bank owned properties though, the most common response from the seller is "did they not understand what I meant when I said sold as-is"? In other words, ask your mortgage lender for a better way to handle the problems..like a post closing repair escrow.

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  • 29. Will This Home Qualify For FHA/VA Financing?
     

    FHA and VA loans are sometimes the most competitive options in rates and availability. However many properties that are "Bank owned", are sold "As Is" and most likely will not pass FHA inspections/appraisals. In additions to this, the Seller/Bank will not do the work for the property to pass inspections/appraisals. A buyer attempting to purchase an REO property with FHA financing, often experiences cancellation of their contract due to inspection/appraisal issues. These cancellations often will cost the buyer in lost dollars for inspections and appraisals.

    A possible alternative would be FHA/203k. This would entail that you work with the lender upfront to have the FHA inspector/appraiser view the property before submitting an offer to see if the property could be financed by this method. An offer could then be written with 203k financing and extra time could be requested for repairs estimates and a projected closing date.
    HUD homes designate if they will qualify for FHA financing. See the HUD home FAQ for more information.

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  • 30. Best Practices For Preparing An Offer on A Bank Owned Home?
     

    We suggest you review this post from our blog.

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  • 31. Can I submit a back-up offer on a bank-owned home?
     

    The bank will have us hold any back up offer in situations where we are managing the bidding process (NOT HUD or Fannie Mae). If the accepted deal falls out, the bank may, or may not, ask for the back- up offers first. They often tell us to place the property back on the market and let all parties resubmit new offers. Unfortunately, if it is pending it means we have an accepted offer and the bank is not requesting or considering any more offers.

    When we have posted a listing as "Active- Back Up Offers" the frequent question asked is: "Noticed you are taking Backup offers. Is there still time to get one in?" Back up offers status means the bank has accepted an offer and not all documents are executed. It is our way of trying to let you know the situation has not officially pended but that there is an accepted offer.

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  • 32. Offer Confirmations
     

    All offers submitted, as instructed, to WILMOTH Group (some corporate owned homes will require an on-line submittal to a third party unaffiliated with our brokerage)  will receive a confirmation of receipt. If you do not receive a confirmation of receipt within one business day of submitting the offer, please send an inquiry to offers@wilmothgroup.com stating the property address, when you submitted the offer, where the offer was submitted, and the buyers name. We will respond back to you with further instructions

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  • 33. Will the commission be different if I sell a corporate owned home?
     

    Unless otherwise noted, the buyers agent commission offered on the MLS/BLC will be the amount paid.  There is an exception that would be noted.  At the discretion of the corporate seller, the buyers agent commission (BAC) may be paid on the net sales price, not the gross. Realtor Association rules require us to offer a minimum BAC. You will have the option of choosing to instead receive what the bank pays under their specific terms. In these situations, the BAC offered on the BLC/MLS listing sheet is an estimate of what will be paid. The buyer agent cooperative commission offered may be accepted by a selling agent, or you may choose to accept what the bank offers. In general the alternative buyer agent commission is calculated on the net purchase price and will not be paid if buyer is also the selling broker. It averages around 2-3%. We do not know the exact amount until HUD's are prepared.

    Note: HUD owned homes have a different practice for how HUD selling agent commissions are paid.  Please read through this post in order  to understand how HUD commissions are calculated and paid.

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  • 34. When Can I Tell My Client That They Have A Deal?
     

    A common source of confusion on bank owned homes is what constitutes an actual contracted agreement. All bank-owned properties will give a verbal or email acceptance only until the bank's specific purchase contract terms (in the form of a bank addendum or specific purchase contract) are executed by both the buyer and the seller. There are situations where the bank contract or addendum is not executed and returned in a timely manner to the bank and the bank proceeds with accepting another offer. It is imperative that if you receive an acceptance for a bank owned property that you execute the contract or bank addendum and return it within the demanded time frames.

    Finally, please understand that no offer is fully accepted until the Seller signs the Contract or Addendum package returned to them with buyer's signatures.

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  • 35. What Should I Do If I am sent a Multiple Offer Form?
     

    When WILMOTH Group receives a second offer on one of our bank owned  listings, all negotiations on the first offer will stop per the banks instructions (unless the bank tells us to accept the first offer already presented.) Our procedure after receipt of a first offer is to:

    Send to all parties with offers submitted, and all future offers submitted, a bank required Multiple Offer Disclosure form. This form to be completed by all buyer's agents. This form MUST be returned with a Purchase Agreement that reflects the buyer's highest and best offer. The Multiple Offer form is specific to each seller and it also MUST be completed completely.

    If your Buyer had the first offer you will be contacted and informed we are now in a multiple offer situation and that you will need to submit a Multiple Offer Disclosure form.

    It is important to advise your Buyer that when a Multiple Offer Disclosure is requested they are being given ONE chance to make their "Highest and Best" offer. Therefore, if your Buyer was the first to submit you may change the purchase agreement if the Buyer so desires (recognizing that there are now going to be multiple offers and those will all be considered highest and best offers). Please advise your Buyer that this is a one time offer opportunity. There will not be requests for revised offers. The Seller might choose one offer to work with and make a counter offer to it but this is your Buyer's one chance to make their best offer.

    The Seller might do one of several things: they might reject all offers, decide to accept one offer or counter one offer. When we have a final decision from the Seller we will alert you.
    Unless the property has moved to an Active B (back up) status, no offer has been accepted. The status will be changed immediately if an acceptance occurs.

    Finally, under NO circumstances will  WILMOTH Group reveal the content of any other offer received. Please DO NOT ask as it reflects negatively on your professionalism and if such practices are allowed they hurt the credibility of our industry.

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  • 36. How does "Multiple Offers" work with bank-owned homes?
     

    If more than one offer is received on a property, the Bank/Seller might chose to respond in several ways. They might ask all for Highest and Best. If a highest and best is requested, final offers will be due by a pre-determined time.  Some banks also have a Multiple Offer Disclosure form that must be executed by the Buyers Agent, the Buyer, or both.

    In a Multiple Offer situation the bank might chose to counter only one offer and reject others.  For a revised offer to be considered, you must complete the requested form within the time frames stated for your buyer. If you choose to not do so - your offer will be submitted in its original form and it will be noted to Seller that you did not complete this form. You may not change or write on this form in any way.. only check the appropriate applicable boxes, and signature lines.

    If the deadline for submission of Multiple Offers has passed, you will be asked to return the Multiple Offer Notification (MON) form ASAP. In this situation, we will submit the original offer as soon as we receive and as submitted. When the MON form has been returned, we will submit the revised offer. Please understand that if this is the situation, offers are actively being negotiated and we have no control over when a Buyer or a Seller will accept an offer."

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  • 1. What is the Corporate-Bank Addendum all about?
     

    Almost all corporate owned properties require an additional document be executed known as the "Addendum". This document is in addition to the signed Purchase Agreement and any counter offers. It carries additional terms unique to purchasing a corporate owned property. Please don't "just sign" this Addendum!  Take time to read it and understand to what you are agreeing.  Most Addendums are highly in favor of the Seller.  The Addendum addresses many loopholes that have been exploited by Buyers in standardized purchase agreement documents. In some cases the Purchase Contract terms may actually be presented on the required contract forms and the Realtor purchase agreement document discarded.

    Addendums typically carry a charge per diem if the property does not close by the agreed upon close date.  If this clause exists it will state that it goes into effect if the fault for not closing on time is on the buyer or lender.

    No changes are allowed to these seller's addendum. Always remember, all contracts are subject to the seller's management approval.

    A deal is not a deal until the documents are completely signed by the seller!

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  • 2. Will a cash offer be looked at favorably?
     

    Cash offers are normally looked upon more favorably than financed offers. Therefore, the banks normally frown upon trying to change to financing. They will not allow mortgage companies or private lenders to be included on the HUD settlement statement if the accepted purchase offer stated "cash" terms. Cash "AS-IS" offers are not contingent upon having the funds available to close or the condition of the property. The buyer should be fully informed that (at a minimum) Earnest Money will be forfeited if they do not close the property. Selling institutions do not consider credit lines to be a form of cash. Credit lines are conventional loans.

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  • 3. How much earnest money must be submitted?
     

    In general, the earnest money deposit (EMD) is negotiable. In the case of HUD homes there are set rules. The HUD rules are actually fairly good guidelines to utilize when making your offer on any bank owned home.

    When bidding on a HUD home a $1,000 earnest money deposit (EMD) is required on all offers for properties listed over $50,000. Under $50,000 requires a $500 EMD.  For vacant lots 50% of the list price is the required EMD.

    A couple of other things to remember when making an offer on a bank owned home.

    Generally, a minimum of 10% is required for cash purchases.

    All Earnest Money Deposits must be in the form of a Cashiers Check or Money Order.

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  • 4. Why did the seller not sign the counter offer?
     

    You may receive a Seller's Counter Offer with no signatures. These forms are generated by the bank's Asset Manager or the outsource company (and often come to the Listing agent as an email attachment). Once an offer is accepted the entire "package" (which may include the Offer as well as Counters, Addendums, copy of the check, et.al.) is sent to the bank for signatures.

    Once you are informed that your offer is accepted, it is. (acceptance may be accompanied by the aforementioned worksheet). REO departments and Asset managers give the "OK" and then go to their managers for signatures. (It is highly unlikely to have an Asset Manager "un-accept" an accepted offer. Yes, you could be the first, but it is highly unlikely.) We realize it is an unusual business practice to agree to offers orally, but corporate sellers often have their own way of doing business and we appreciate your understanding.

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  • 5. How does the process of making an offer work with a bank owned property? Do you propose the offer to the lender and they accept, decline or make a counter offer?
     

    We submit the offer like any other property. The bank usually has a threshold of what they can accept based on multiple valuations they have on hand. That price is discounted by the days on market…the longer on market the lower they can accept. They will counter offer unless they consider the offer ridiculous. One mandatory item is that you must have a satisfactory proof of funds.

    The bank will require that all offers be submitted to them on a summary form which is called the "Offer Worksheet." This is aimed at simplifying the process for the Asset Manager, who will more often than not, have a large number of properties under management and often in multiple States with vastly different real estate contracts. This worksheet will have the "basics" only (Price, Terms, Concessions, Closing dates, etc.). The Wilmoth Group prepares this "Offer Worksheet" based from the terms of the purchase agreement we receive.

    Since all offers are submitted to the seller on the worksheet (or online via the "Offer Summary") your counter offer may come back in the "worksheet" format (Simple details of what the bank is willing to accept) or via an unsigned Counter Offer. The Wilmoth Group will respond back to you either verbally or via a counter offer form. Users of the "Make An Offer" system will receive an acceptance, counter offer, or rejection through the system.

    Offers by "Letter of Intent" will not be accepted.

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  • 6. Who chooses the title company?
     

    With the exception of HUD owned homes, the bank chooses. WILMOTH (as listing agent) has no say in the matter either. This is due to the fact that the seller has significant amounts of Title work completed during the Foreclosure process. TITLE COMPANY CONTACT INFORMATION COMES WITH THE SIGNED DOCUMENTS FROM THE SELLER. In all likelihood the Listing Agent WILL NOT HAVE this information prior to receiving this document package. We are waiting too and will forward the information as soon as it becomes available. Continued multiple and/or daily queries slow down the process for everyone involved. Please be considerate, we are all working towards the common goal of closing on the subject property.

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  • 7. What happens with Board of Health fees, unpaid taxes, and sewer liens?
     

    Local Boards of Health do not always timely file liens on properties. The title insurance only covers recorded liens. The title company will make all efforts possible to identify any liens that could cloud the Title. These charges will be paid by the seller at closing in order to provide clear title at the date of closing. It is in the interest of your buyer to check with the local Board of Health to make sure there are no outstanding bills that have not yet been recorded. This is the same with sewer liens. Also, if the subject property is a newer build, it is in the interest of your buyer to check if the assessed taxes are correct.

    Notify the Title Company with written records of any pertinent information.

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  • 8. What happens if there are multiple offers for a property?
     

    If the seller receives multiple offers on a property, buyers may be requested to submit their highest, best and final offer by an agreed upon date and time. This is fairly common and the process is handled a little differently by each seller. In all cases except HUD homes, WILMOTH will communicate with all buyers and provide a deadline to change their offer if desired. With HUD homes all bidding is coordinated through HUD and notices will usually come from HUD or an Asset Manager providing the opportunity to rebid for your buyer at the HUDHomestore.com. With HUD homes please remember, WILMOTH does not have any involvement in the bidding process.

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  • 9. Can I take possession before the closing in order to start making repairs?
     

    Due to liability risks, the Purchaser is not to take possession until Seller has been funded (closing is final). No repairs to be performed by the Purchaser prior to this time.

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  • 10. Do you have any information on a Home Owners Association?
     

    If this is a bank-owned property, HOA information is not routinely obtained. However, if we have information, we will gladly provide it as well as any contact information if available.

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  • 11. How To Set Up An Inspection?
     

    It is absolutely essential that you give us 3 BUSINESS DAYS NOTICE PRIOR to scheduling your inspection. Some utilities (such as electricity) will likely be on prior to your making an offer, others will not (such as gas or propane) The Listing Agent has NO control over the work schedules of the local utility companies. As such the Listing Agent will not be responsible for re-inspections and/or associated fees. It is not a bad idea to visit the property a day PRIOR to the inspection to check if systems are on and working.
    NOTE: Purchases of HUD homes require a different process for inspections of which we are not involved. If you need to set up an inspection for a HUD home ratified contract you will need to coordinate it with the Field Services company (FSM). They are the only party who can authorize utility activation and approve access for the sales agent, their buyer and the inspector.

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  • 12. Can the buyer complete an inspection?
     

    Just like any other sale, your buyer has the right to fully inspect the property within the frame of the inspection contingency of the purchase agreement. Seller will not order or pay for any inspections.

    The seller, or our company, will not approve any pre-contract inspections. Additional utilities will not be turned on, de-winterizations will not occur. Radon tests will not be performed etc. This is the purpose of the inspection contingency. Assess the property the best you can in the condition it is in (everybody else will be looking at it the same way). Negotiate a successful offer and include an inspection contingency. Then you can complete an inspection and address anything found under approved conditions in an inspection response.

    HUD-owned homes inspection procedures are coordinated with the Field Services company only AFTER the HUD purchase agreement has been ratified (executed) by HUD.

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  • 13. What are realistic time frames to complete the transaction?
     

    Generally you will have 30 (to 45) days from mutual acceptance to close the transaction.

    Often the proposed closing date on the original offer is unrealistic due to the elongated negotiation and acceptance process with the seller. The seller's Asset Manager knows that you can't close in a week and a half (unless your offer is cash).   Asset managers know that appraisals, inspections and the loan process take time.

    They will assume that you have taken the time prior to making an offer to become pre-approved for the loan and that there will be no trivial delays beyond the 30 (to 45) day closing period.

    Read the Seller Addendum carefully – there is often a per diem late fee assessed for tardy closings. The corporate seller will not suffer delays due to the purchaser's lender not performing in a timely manner. Begin your inspections upon being alerted that your offer is accepted.

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  • 14. How can I make sure my offer is received?
     

    Realtors-You will receive an email confirmation within 24 hours of submitting your offer. For HUD bids at HUDHomestore.com make note of the confirmation number you receive immediately after submitting the bid.

    Buyers Not Represented By a Realtor- You will receive an email confirmation

    Multiple offers normally result in a request for a highest and best offer. Escalation clauses will not be accepted by the banks.

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  • 15. Can I assign the purchase contract after it is accepted?
     

    No - Corporate sellers do not allow assignments of contracts.

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  • 16. Will the bank allow repairs required for our mortgage before we close?
     

    NO!  Sorry..we have never seen any owner, corporate or one with sense and a good advisor, allow a potential buyer complete repairs required for a mortgage prior to closing. That is just a really bad idea. Your best hope is the seller will make some repairs that are needed to close. With bank owned properties though, the most common response from the seller is "did they not understand what I meant when I said sold as-is"? In other words, ask your mortgage lender for a better way to handle the problems..like a post closing repair escrow.

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  • 17. Will This Home Qualify For FHA/VA Financing?
     

    FHA and VA loans are sometimes the most competitive options in rates and availability. However many properties that are "Bank owned", are sold "As Is" and most likely will not pass FHA inspections/appraisals. In additions to this, the Seller/Bank will not do the work for the property to pass inspections/appraisals. A buyer attempting to purchase an REO property with FHA financing, often experiences cancellation of their contract due to inspection/appraisal issues. These cancellations often will cost the buyer in lost dollars for inspections and appraisals.

    A possible alternative would be FHA/203k. This would entail that you work with the lender upfront to have the FHA inspector/appraiser view the property before submitting an offer to see if the property could be financed by this method. An offer could then be written with 203k financing and extra time could be requested for repairs estimates and a projected closing date.
    HUD homes designate if they will qualify for FHA financing. See the HUD home FAQ for more information.

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  • 18. What Are The Details of the Fannie Mae Deed Restriction?
     

    If you are placing an offer on a Fannie Mae forelcosure, in order to receive an acceptance of your offer, you will be required to accept some special restrictions. These restrictions are added to the Deed you will receive at closing, making it impossible to ignore and subsequently are called the Fannie Mae Deed Restriction.

    The exact language used on this deed restriction is as follows:

    Buyer cannot sell/encumber property for more than 120% of purchase price for a period of 3 months from the date of close.

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  • 19. What does "Proof of Funds" mean?
     

    It is strongly recommended that your offer be submitted with a proof of funds or a preapproval letter.  In fact, many corporate, and investor, sellers insist on receiving proof of funds with any offer.  A proof of funds provides assurance to the seller that the proposed buyer has financial capacity to perform on their offer.

    Corporate sellers will likely favor offers that specifically show the proposed buyer's financial capacity to complete the purchase as proposed.

    For a buyer using borrowed funds the pre-approval should include the amount for which the buyer is qualified, type of loan, contact information for the lender, and a current date or no more than 30 days old.

    Cash offers should have a proof of funds letter or a copy of a statement showing funds available in excess of the purchase price. Current bank statements or recent letters (less than 7 days old) from a bank representative are acceptable documents.

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  • 20. Why Do You Want To Use Email-Can't We Just Talk?
     

    Please understand that you will get the fastest, and best, response if you utilize email. We work as a team and often your question or request needs to be routed to the right party. We are able to work most efficiently when all parties have access to the written word. We know many people still want to discuss on the phone their questions and requests. We respect that, but we also emphasize that you will get the fastest, most accurate, response when you utilize email.  Sure..we can give you a call.  In fact, we enjoy talking just as much as you!  Your question will likely be answered much faster though if we can utilize our systems and team to research and respond via an email.  Plus, we always have a written record of past discussions.

    If you just have to talk..go ahead and call us. But now you know why we prefer to use email.

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  • 1. What is the Corporate-Bank Addendum all about?
     

    Almost all corporate owned properties require an additional document be executed known as the "Addendum". This document is in addition to the signed Purchase Agreement and any counter offers. It carries additional terms unique to purchasing a corporate owned property. Please don't "just sign" this Addendum!  Take time to read it and understand to what you are agreeing.  Most Addendums are highly in favor of the Seller.  The Addendum addresses many loopholes that have been exploited by Buyers in standardized purchase agreement documents. In some cases the Purchase Contract terms may actually be presented on the required contract forms and the Realtor purchase agreement document discarded.

    Addendums typically carry a charge per diem if the property does not close by the agreed upon close date.  If this clause exists it will state that it goes into effect if the fault for not closing on time is on the buyer or lender.

    No changes are allowed to these seller's addendum. Always remember, all contracts are subject to the seller's management approval.

    A deal is not a deal until the documents are completely signed by the seller!

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  • 2. Why do I have to provide a Proof of Funds or a Pre-Approval?
     

    As a standard rule, purchasing bank-owned properties requires making available with your offer documentation that the purchaser either has the funds or is approved for bank financing. When a buyer submits this information with their offer, and their offer is accepted, in general it eliminates the financing contingency of the purchase agreement. Why? Because the point of the requirement is to prove to the seller that the proposed purchaser does not face any problems on completing the purchase-they either have funds or a mortgage pre-approval in place.

    When the proof of funds is provided as cash, then the method for purchasing the property needs to be cash. Please do not come back after the offer is accepted and let us know that your buyer now wants to use financing. If you are the buyer, or the agent representing that buyer, if this occurs please be aware that the seller may choose to cancel the purchase agreement and retain the earnest money due to non-performance under the terms of the accepted contract.

    If you submit a pre-approval and it has a lot of contingencies, or it is very sketchy as to how much of an approval it really is, please be aware that the seller may choose to accept an offer that provides a more solid proof of funds. About the only thing that can cancel an agreement that has been accepted with the type of proof of funds required, is a low appraisal. With bank-owned properties, that is extremely rare since in general they are being purchased at a discount.

    Contract and lender letters MUST specify the type of loan and the LTV the borrower is seeking.

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  • 3. How much earnest money must be submitted?
     

    In general, the earnest money deposit (EMD) is negotiable. In the case of HUD homes there are set rules. The HUD rules are actually fairly good guidelines to utilize when making your offer on any bank owned home.

    When bidding on a HUD home a $1,000 earnest money deposit (EMD) is required on all offers for properties listed over $50,000. Under $50,000 requires a $500 EMD.  For vacant lots 50% of the list price is the required EMD.

    A couple of other things to remember when making an offer on a bank owned home.

    Generally, a minimum of 10% is required for cash purchases.

    All Earnest Money Deposits must be in the form of a Cashiers Check or Money Order.

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  • 4. Will I get an answer to my offer over the weekend?
     

    No-unless we are processing responses received on a Friday afternoon. The seller's representatives work normal five day a week schedules and are not available over the weekend. Any offer submitted over the weekend will be presented the following business day. Any offer submitted on line will be date and time stamped. The bank will know when you submitted your offer.

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  • 5. How long does it take to receive an response to an offer?
     

    Corporate sellers may take up to 7 - 10 days to provide a response to an offer.   Please plan and prepare for the  extra time for the seller to respond to an offer. Your offer will be timely submitted. If you have not heard a response by your expiration date and time, we are not ignoring your requests --we simply do not have an answer from the seller. Each Asset Manager representing the corporate owner works with hundreds of properties at any given time and they try to respond timely, but unfortunately, this cannot always be done. As soon as we have a response, we will promptly forward it on to you.

    Also, the listing agent has no control over the corporate seller's decision making process which may affect the time for a response to an offer. On rare occasion they will respond in the first 48 hours. However, more than likely they will respond in 3 to 5 days. Please be patient and resist the urge to call us frequently to check on progress.  WILMOTH Group will notify you immediately when we receive a response. Some corporate sellers will not look at offers until the property has been on the market for 5 to 10 days.  Remember...we all share the same goal of selling the property.  If you have not heard from us it is because we have no update to give you-certainly not because we are ignoring you!

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  • 6. What does it mean that this property is sold as-is ?
     

    When a property is being sold as-is no repairs will be made by seller. No repairs will be made for HUD owned homes. If an inspection contingency is included in the offer, any response should only include any major structural or safety issues over $500 and should include a possible credit amount at closing, along with 2 contractor bids.

    There are no guarantees that any allowance will be given. The properties are already priced assuming repairs are needed.

    If the property is sold "AS-IS"  it should be assumed that some work of some type is needed and the offer should be reflective of this information. The seller realizes that work needs to be done and has already priced the property accordingly.

    Special Notes: Corporate sellers will not accept any contingency on the sale of a buyer's home. Sellers will not pay for Home Warranties. With the exception of HUD owned homes, most of our houses do not qualify for all forms of financing - especially FHA. See our HUD homes section to learn more about using FHA financing for HUD homes.

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  • 7. How does the process of making an offer work with a bank owned property? Do you propose the offer to the lender and they accept, decline or make a counter offer?
     

    We submit the offer like any other property. The bank usually has a threshold of what they can accept based on multiple valuations they have on hand. That price is discounted by the days on market…the longer on market the lower they can accept. They will counter offer unless they consider the offer ridiculous. One mandatory item is that you must have a satisfactory proof of funds.

    The bank will require that all offers be submitted to them on a summary form which is called the "Offer Worksheet." This is aimed at simplifying the process for the Asset Manager, who will more often than not, have a large number of properties under management and often in multiple States with vastly different real estate contracts. This worksheet will have the "basics" only (Price, Terms, Concessions, Closing dates, etc.). The Wilmoth Group prepares this "Offer Worksheet" based from the terms of the purchase agreement we receive.

    Since all offers are submitted to the seller on the worksheet (or online via the "Offer Summary") your counter offer may come back in the "worksheet" format (Simple details of what the bank is willing to accept) or via an unsigned Counter Offer. The Wilmoth Group will respond back to you either verbally or via a counter offer form. Users of the "Make An Offer" system will receive an acceptance, counter offer, or rejection through the system.

    Offers by "Letter of Intent" will not be accepted.

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  • 8. What does it mean that this property is a bank owned home and sold as-is?
     

    When a property is being sold "as-is" no repairs will be made by seller. If an inspection contingency is included in the offer, any response should only include any major structural or safety issues over $500 and should include a possible credit amount at closing, along with 2 contractor bids. There are no guarantees that any allowance will be given. The properties are already priced assuming repairs are needed. In this situation, the seller is not agreeing to make any repairs nor is willing to lower the price for repairs needed on the property. If the property is sold "AS-IS" and no repairs or refurbishments have been made - it should be assumed that some work of some type is needed and the offer should be reflective of this information. The client realizes that work needs to be done and has already priced the property accordingly. Special Notes: Banks will not accept any contingency on the sale of a buyer's home. Sellers will not pay for Home Warranties. Please understand that most of our houses do not qualify for all forms of financing - especially FHA.

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  • 9. When I make an offer, how long does it take to receive an answer?
     

    Sellers may take up to 7 - 10 days to respond to submitted contracts. Please allow extra response time for the seller to respond to offers. Your offer will be timely submitted. If you have not heard a response by your expiration date and time, we are not ignoring your requests --we simply do not have an answer from the bank. Each Asset Manager representing the corporate owner works with hundreds of properties at any given time and they try to respond timely, but unfortunately, this cannot always be done. As soon as we have a response, we will promptly forward it on to you.

    We have no control over the bank's decision making process. On rare occasion they will respond in the first 48 hours. However, more than likely they will respond in 3 to 5 days. Please be patient and do not call to check on progress. The Wilmoth Group will notify you immediately when we receive a response. Some banks do not look at offers until the property has been on the market for 5 to 10 days. Please be considerate, we are all working towards the common goal of closing on the subject property. IF YOU HAVE NOT HEARD FROM US IT IS BECAUSE WE HAVE NO UPDATE TO GIVE YOU- NOT BECAUSE WE ARE IGNORING YOU.

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  • 10. Why do I not get back a signed purchase agreement when I am told my offer is accepted?
     

    A common source of confusion on bank owned homes is what constitutes an actual contracted agreement. All bank-owned properties will give a verbal acceptance only until the bank's specific purchase contract terms (in the form of a bank addendum to the purchase contract) are executed by both the buyer and the seller. There are situations where the bank addendum is not executed and returned in a timely manner to the bank and the bank proceeds with accepting another offer. It is imperative that if you receive an acceptance for a bank owned property that you execute the bank addendum and return it within the demanded time frames. Finally, please understand that no offer is fully accepted until the Seller signs the Addendum package returned to them.

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  • 11. Who chooses the title company?
     

    With the exception of HUD owned homes, the bank chooses. WILMOTH (as listing agent) has no say in the matter either. This is due to the fact that the seller has significant amounts of Title work completed during the Foreclosure process. TITLE COMPANY CONTACT INFORMATION COMES WITH THE SIGNED DOCUMENTS FROM THE SELLER. In all likelihood the Listing Agent WILL NOT HAVE this information prior to receiving this document package. We are waiting too and will forward the information as soon as it becomes available. Continued multiple and/or daily queries slow down the process for everyone involved. Please be considerate, we are all working towards the common goal of closing on the subject property.

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  • 12. What happens with Board of Health fees, unpaid taxes, and sewer liens?
     

    Local Boards of Health do not always timely file liens on properties. The title insurance only covers recorded liens. The title company will make all efforts possible to identify any liens that could cloud the Title. These charges will be paid by the seller at closing in order to provide clear title at the date of closing. It is in the interest of your buyer to check with the local Board of Health to make sure there are no outstanding bills that have not yet been recorded. This is the same with sewer liens. Also, if the subject property is a newer build, it is in the interest of your buyer to check if the assessed taxes are correct.

    Notify the Title Company with written records of any pertinent information.

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  • 13. What happens if there are multiple offers for a property?
     

    If the seller receives multiple offers on a property, buyers may be requested to submit their highest, best and final offer by an agreed upon date and time. This is fairly common and the process is handled a little differently by each seller. In all cases except HUD homes, WILMOTH will communicate with all buyers and provide a deadline to change their offer if desired. With HUD homes all bidding is coordinated through HUD and notices will usually come from HUD or an Asset Manager providing the opportunity to rebid for your buyer at the HUDHomestore.com. With HUD homes please remember, WILMOTH does not have any involvement in the bidding process.

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  • 14. Can I take possession before the closing in order to start making repairs?
     

    Due to liability risks, the Purchaser is not to take possession until Seller has been funded (closing is final). No repairs to be performed by the Purchaser prior to this time.

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  • 15. Do you have any information on a Home Owners Association?
     

    If this is a bank-owned property, HOA information is not routinely obtained. However, if we have information, we will gladly provide it as well as any contact information if available.

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  • 16. Will the owner accept contingent sales?
     

    It is highly unlikely that any bank would accept a contingent sale. If the bank accepts your offer then finds out that the buyer really does need to sell a home in order to purchase (and you haven't disclosed that) the sale will be immediately cancelled. Don't expect to have the earnest money returned in this type of situation.

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  • 17. Will the bank pay for any repairs?
     

    Please understand that this home is being sold "AS-IS." If the bank has rehabilitated the home, their scope of work has already been determined and can not be changed. As a rule, ONLY issues which are LENDER REQUIRED will be addressed. REO Asset Managers are VERY familiar with what constitutes a Lender Required repair and will not approve "cosmetic," "dated", or "wear and tear" related issues. Note: with HUD homes no repairs will be made. These homes are already either approved for FHA financing or they are not.

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  • 18. Can the buyer cancel if they find something wrong?
     

    The buyer has the right to cancel the contract and receive their deposit back if they do so within their contractual time frame (unless specifically noted). Note-HUD Homes are sold as-is. A document called the Earnest Money Deposit Addendum which is a part of the contract package details the terms for return of earnest money. Inspections are encouraged on all homes.

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  • 19. How do I get the utilities on in a property I am interested in?
     

    Any inspection requested by the buyer is intended to be only for buyer's information. We will have utilities turned on to accommodate the inspection (with exception of HUD properties where buyer and agent are responsible and coordinated with the Field Services Manager-FSM).

    If a property has to be de-winterized for the purposes of an inspection, buyer will be required to sign an addendum stating "If buyer does not close on property, for any reason, buyer will be responsible for the cost of having property re-winterized by Seller approved vendor"

    Utilities will be turned on if safe to do so. Depending on the timing of the winterization, it is quite possible that plumbing repairs will be needed and the water may not be able to be turned on. Please keep these factors in mind when making an offer. If an inspector/appraiser is unwilling to turn on pilot lights, main water valve, etc., it is the buyer or buyer's agent responsibility to make arrangements to have them turned on and off again.

    Electricity will be turned off as of the day of closing; please make arrangements to have utilities transferred to the buyer.

    Remember- HUD home procedures for utilities are determined by the FSM.  Please contact the FSM listed with the HUD property and follow their procedures for utility activation.

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  • 20. How To Set Up An Inspection?
     

    It is absolutely essential that you give us 3 BUSINESS DAYS NOTICE PRIOR to scheduling your inspection. Some utilities (such as electricity) will likely be on prior to your making an offer, others will not (such as gas or propane) The Listing Agent has NO control over the work schedules of the local utility companies. As such the Listing Agent will not be responsible for re-inspections and/or associated fees. It is not a bad idea to visit the property a day PRIOR to the inspection to check if systems are on and working.
    NOTE: Purchases of HUD homes require a different process for inspections of which we are not involved. If you need to set up an inspection for a HUD home ratified contract you will need to coordinate it with the Field Services company (FSM). They are the only party who can authorize utility activation and approve access for the sales agent, their buyer and the inspector.

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  • 21. Can the buyer complete an inspection?
     

    Just like any other sale, your buyer has the right to fully inspect the property within the frame of the inspection contingency of the purchase agreement. Seller will not order or pay for any inspections.

    The seller, or our company, will not approve any pre-contract inspections. Additional utilities will not be turned on, de-winterizations will not occur. Radon tests will not be performed etc. This is the purpose of the inspection contingency. Assess the property the best you can in the condition it is in (everybody else will be looking at it the same way). Negotiate a successful offer and include an inspection contingency. Then you can complete an inspection and address anything found under approved conditions in an inspection response.

    HUD-owned homes inspection procedures are coordinated with the Field Services company only AFTER the HUD purchase agreement has been ratified (executed) by HUD.

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  • 22. What are realistic time frames to complete the transaction?
     

    Generally you will have 30 (to 45) days from mutual acceptance to close the transaction.

    Often the proposed closing date on the original offer is unrealistic due to the elongated negotiation and acceptance process with the seller. The seller's Asset Manager knows that you can't close in a week and a half (unless your offer is cash).   Asset managers know that appraisals, inspections and the loan process take time.

    They will assume that you have taken the time prior to making an offer to become pre-approved for the loan and that there will be no trivial delays beyond the 30 (to 45) day closing period.

    Read the Seller Addendum carefully – there is often a per diem late fee assessed for tardy closings. The corporate seller will not suffer delays due to the purchaser's lender not performing in a timely manner. Begin your inspections upon being alerted that your offer is accepted.

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  • 23. How can I make sure my offer is received?
     

    Realtors-You will receive an email confirmation within 24 hours of submitting your offer. For HUD bids at HUDHomestore.com make note of the confirmation number you receive immediately after submitting the bid.

    Buyers Not Represented By a Realtor- You will receive an email confirmation

    Multiple offers normally result in a request for a highest and best offer. Escalation clauses will not be accepted by the banks.

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  • 24. I am working with a buyer who does not have a Social Security number. Can they place a bid or make an offer?
     

    If your buyer does not have a Social Security number, they will need to have a Taxpayer Identification Number (TIN). These are commonly applied for and issued to non-US citizens who have business or personal interests in the United States that would require paying taxes. The Selling Agent will need to enter the TIN in the same format as a Social Security Number would appear (xxx-xx-xxxx). If they win the bid, the bidder will be required to provide a copy of the letter issued by the United States government assigning them the TIN with the rest of the contract package.

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  • 25. Can I assign the purchase contract after it is accepted?
     

    No - Corporate sellers do not allow assignments of contracts.

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  • 26. Will the bank allow repairs required for our mortgage before we close?
     

    NO!  Sorry..we have never seen any owner, corporate or one with sense and a good advisor, allow a potential buyer complete repairs required for a mortgage prior to closing. That is just a really bad idea. Your best hope is the seller will make some repairs that are needed to close. With bank owned properties though, the most common response from the seller is "did they not understand what I meant when I said sold as-is"? In other words, ask your mortgage lender for a better way to handle the problems..like a post closing repair escrow.

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  • 27. Will This Home Qualify For FHA/VA Financing?
     

    FHA and VA loans are sometimes the most competitive options in rates and availability. However many properties that are "Bank owned", are sold "As Is" and most likely will not pass FHA inspections/appraisals. In additions to this, the Seller/Bank will not do the work for the property to pass inspections/appraisals. A buyer attempting to purchase an REO property with FHA financing, often experiences cancellation of their contract due to inspection/appraisal issues. These cancellations often will cost the buyer in lost dollars for inspections and appraisals.

    A possible alternative would be FHA/203k. This would entail that you work with the lender upfront to have the FHA inspector/appraiser view the property before submitting an offer to see if the property could be financed by this method. An offer could then be written with 203k financing and extra time could be requested for repairs estimates and a projected closing date.
    HUD homes designate if they will qualify for FHA financing. See the HUD home FAQ for more information.

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  • 28. What Are The Details of the Fannie Mae Deed Restriction?
     

    If you are placing an offer on a Fannie Mae forelcosure, in order to receive an acceptance of your offer, you will be required to accept some special restrictions. These restrictions are added to the Deed you will receive at closing, making it impossible to ignore and subsequently are called the Fannie Mae Deed Restriction.

    The exact language used on this deed restriction is as follows:

    Buyer cannot sell/encumber property for more than 120% of purchase price for a period of 3 months from the date of close.

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  • 1. What is the Corporate-Bank Addendum all about?
     

    Almost all corporate owned properties require an additional document be executed known as the "Addendum". This document is in addition to the signed Purchase Agreement and any counter offers. It carries additional terms unique to purchasing a corporate owned property. Please don't "just sign" this Addendum!  Take time to read it and understand to what you are agreeing.  Most Addendums are highly in favor of the Seller.  The Addendum addresses many loopholes that have been exploited by Buyers in standardized purchase agreement documents. In some cases the Purchase Contract terms may actually be presented on the required contract forms and the Realtor purchase agreement document discarded.

    Addendums typically carry a charge per diem if the property does not close by the agreed upon close date.  If this clause exists it will state that it goes into effect if the fault for not closing on time is on the buyer or lender.

    No changes are allowed to these seller's addendum. Always remember, all contracts are subject to the seller's management approval.

    A deal is not a deal until the documents are completely signed by the seller!

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  • 2. Will a cash offer be looked at favorably?
     

    Cash offers are normally looked upon more favorably than financed offers. Therefore, the banks normally frown upon trying to change to financing. They will not allow mortgage companies or private lenders to be included on the HUD settlement statement if the accepted purchase offer stated "cash" terms. Cash "AS-IS" offers are not contingent upon having the funds available to close or the condition of the property. The buyer should be fully informed that (at a minimum) Earnest Money will be forfeited if they do not close the property. Selling institutions do not consider credit lines to be a form of cash. Credit lines are conventional loans.

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  • 3. I am a Realtor... what is the process for submitting an offer and what else do I need to know?
     

    **As Is**This is a bank owned property and is being sold in "As Is" condition. Please make sure that your buyer understands this. The bank acquired the property through foreclosure proceedings and does not have prior history or information regarding the condition of the property. There is no Sales Disclosure. Most banks have no inspections done on these properties. These properties have already been priced assuming that repairs are needed. FHA or VA financing will not typically work on these properties-with the exception of rehabbed properties that will be so noted in the MLS.

    **Submitting an Offer**When submitting an offer, please include proof of funds or preapproval letter stating amount that buyer is qualified for. When we submit your offer to the bank, we are also communicating buyer's ability to purchase the property. Your offer will not be submitted without proof of funds or preapproval. When your complete offer is received, we will fax you a confirmation of receipt. It is important that you submit cover sheet w/contact information. Your offer will be submitted to the bank in a timely fashion and you should expect a response within 48 business hours.

    **Offer Process**After you have submitted on offer, one option the seller may choose is to counter your offer. We will submit this counter to you on standard Realtor forms. It is not uncommon for another offer to come in during negotiation. If this happens, bank will call for "Highest and Best" on all submitted offers. Sometimes the bank will accept an offer, reject the others and occasionally they will choose to counter only one of the offers.

    **Accepted Offer**Once your offer has been accepted, you will receive the banks addendum which is unique to the negotiated transaction and supersedes the Purchase Agreement (PA). Each bank uses their own addendum and there will be multiple places for the buyer to sign and initial. Please review carefully with your buyer.

    **Terms of Acceptance**Bank addendum will specify the negotiated terms, disclosures and contract date. Please make sure that your buyer understands these terms. The addendum also stipulates a per diem penalty if buyer does not close by "contract date". If there is a lender involved, please make sure that the lender is aware of this date. The banks will enforce the per diem if buyer cannot close for any reason including "lender not being ready". Time is of the essence, which is why we require original signed docs back in 48 hrs. Earnest money needs to be in the form of a cashiers check or certified check, no exceptions. Some banks have preliminary title work completed, others start the title process only with a fully executed package.

    **Inspections**Property is being sold in "As Is" condition. If an inspection contingency is included in PA, responses should only address major structural or safety issues. The Bank will seldom make any repairs and will only occasionally grant an allowance at closing. The buyer is welcome to have an inspection done for informational purposes. We will have utilities turned on to accommodate the inspection. However, if property has to be "de-winterized" for the purposes of an inspection, buyer will be required to sign an addendum stating "If buyer does not close on property, for any reason, buyer will be responsible for the cost of having property re-winterized by Seller approved vendor"

    **Other Info** HOA information is not typically available. If we have, we will be happy to provide. Buyer will not be granted access to property for repairs of any nature prior to close. Buyer should plan on having a locksmith available to rekey immediately after closing. Lockbox and sign will be removed shortly after closing. Please ask buyer to leave both in place and they will be removed.

    Commission may be reduced due to any buyer concessions.

    Seller may not pay a selling commission to a selling agent purchasing a property for themselves . Please confirm, and do not assume, to find out if this applies to your transaction.

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  • 4. How much earnest money must be submitted?
     

    In general, the earnest money deposit (EMD) is negotiable. In the case of HUD homes there are set rules. The HUD rules are actually fairly good guidelines to utilize when making your offer on any bank owned home.

    When bidding on a HUD home a $1,000 earnest money deposit (EMD) is required on all offers for properties listed over $50,000. Under $50,000 requires a $500 EMD.  For vacant lots 50% of the list price is the required EMD.

    A couple of other things to remember when making an offer on a bank owned home.

    Generally, a minimum of 10% is required for cash purchases.

    All Earnest Money Deposits must be in the form of a Cashiers Check or Money Order.

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  • 5. Why did the seller not sign the counter offer?
     

    You may receive a Seller's Counter Offer with no signatures. These forms are generated by the bank's Asset Manager or the outsource company (and often come to the Listing agent as an email attachment). Once an offer is accepted the entire "package" (which may include the Offer as well as Counters, Addendums, copy of the check, et.al.) is sent to the bank for signatures.

    Once you are informed that your offer is accepted, it is. (acceptance may be accompanied by the aforementioned worksheet). REO departments and Asset managers give the "OK" and then go to their managers for signatures. (It is highly unlikely to have an Asset Manager "un-accept" an accepted offer. Yes, you could be the first, but it is highly unlikely.) We realize it is an unusual business practice to agree to offers orally, but corporate sellers often have their own way of doing business and we appreciate your understanding.

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  • 6. Can the buyer complete an inspection?
     

    Just like any other sale, your buyer has the right to fully inspect the property within the frame of the inspection contingency of the purchase agreement. Seller will not order or pay for any inspections.

    The seller, or our company, will not approve any pre-contract inspections. Additional utilities will not be turned on, de-winterizations will not occur. Radon tests will not be performed etc. This is the purpose of the inspection contingency. Assess the property the best you can in the condition it is in (everybody else will be looking at it the same way). Negotiate a successful offer and include an inspection contingency. Then you can complete an inspection and address anything found under approved conditions in an inspection response.

    HUD-owned homes inspection procedures are coordinated with the Field Services company only AFTER the HUD purchase agreement has been ratified (executed) by HUD.

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  • 7. What are realistic time frames to complete the transaction?
     

    Generally you will have 30 (to 45) days from mutual acceptance to close the transaction.

    Often the proposed closing date on the original offer is unrealistic due to the elongated negotiation and acceptance process with the seller. The seller's Asset Manager knows that you can't close in a week and a half (unless your offer is cash).   Asset managers know that appraisals, inspections and the loan process take time.

    They will assume that you have taken the time prior to making an offer to become pre-approved for the loan and that there will be no trivial delays beyond the 30 (to 45) day closing period.

    Read the Seller Addendum carefully – there is often a per diem late fee assessed for tardy closings. The corporate seller will not suffer delays due to the purchaser's lender not performing in a timely manner. Begin your inspections upon being alerted that your offer is accepted.

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  • 8. How can I make sure my offer is received?
     

    Realtors-You will receive an email confirmation within 24 hours of submitting your offer. For HUD bids at HUDHomestore.com make note of the confirmation number you receive immediately after submitting the bid.

    Buyers Not Represented By a Realtor- You will receive an email confirmation

    Multiple offers normally result in a request for a highest and best offer. Escalation clauses will not be accepted by the banks.

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  • 9. Where do I find HUD home contact information when the listing is not available at HUDHomestore.com?
     

    To find HUD home contact information visit.HUDHomestore.com. There is a link to Property Contacts in the header part of the site. Click on this link and enter the case number or street address. The contacts list tab from the original listing will appear.

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  • 10. What does a "Cancelled" bid mean on HUD Homestore?
     

    The offer I submitted on HUD HomeStore shows as a "cancelled bid" under "My Bidding History." What does that mean?

    It means your offer was not accepted. From this point you need to see if the property has received another accepted offer or if none of the offers received were acceptable and a new bidding period has started.

    Is the property still listed on HUDHomeStore.com? If so no offers were accepted and if your buyer desires to resubmit their offer, a new bid will need to be prepared.

    If the property is not on HUDHomeStore.com it most likely has a "provisionally" accepted offer. This means the terms have been accepted and the contract fulfillment is taking place. We will also show these properties as pending in the MLS/BLC and WILMOTHGroup.com.  As long as the contract process is proceeding satisfactorily and within terms, the property will not show return to HUDHomeStore.com. If the contract is not completed, we will change the status to Active on the MLS/BLC and WILMOTHGroup.com and the property listing will re-appear on HUDHomeStore.com.

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  • 11. What is the procedure for getting a HUD home de-winterized in order to complete a home inspection?
     

    In areas where winterization is required, all homes will not be able to complete a home inspection without a de-winterization being completed. It will be important that the request to complete a home inspection also note that the home will need to be de-winterized. This request will also go to the Field Services Manager (FSM) noted on the Contacts tab for each property on HUDHomeStore.com.

    Each FSM will have their own procedures but prepare your buyer for a request by the FSM for cash up front to pay for the de-winterization and re-winterization process. The amount to be charged will be set by each FSM so you will have to check with them first. Buyers WILL NOT be allowed to provide their own de/re winterization contractors.

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  • 12. Are all HUD home commissions for the selling agent locked?
     

    HUD home commissions (sales fee) to the selling agent will autopopulate on the sales contract at the rate offered by HUD. In general this rate will be 3%. The selling agent can always accept less for a HUD home commission (sales fee) payment.  Remember that whatever amount you enter on your bid, the selling agent compensation will affect the net amount of the bid.

    Certain properties are designated "hard to sell" properties by HUD and these will have a base $1250 payment as the HUD home commission.  This amount will autopopulate on your bid. In general, "hard-to-sell" properties are homes listed for less than $42,000 or that contain other issues. There is not a specific written policy for when the $1250 will apply. Here is a post from our blog to help you identify these "hard to sell" properties.

     

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  • 13. What does the IN, IE, and UI financing codes mean on a HUDHomestore listing?
     

    What is the difference in the financing codes IN, IE, and UI that show with each listing on HUDHomeStore.com?  These three codes are offered to help provide information to allow a sellers agent or buyer to assess the type of financing available for a listed property. The simplest thing to remember is that these three codes are showing eligibility for FHA 203 (b) financing. The FHA 203 (B) is a program for repairs less than $5,000 where an escrow is created at closing to complete the repairs.

    IN (Insurable)- the property meets the FHA financing requirements and no obvious repairs are needed to insure an FHA loan to a buyer.

    IE (Insurable with Escrow)- these properties are eligible for the FHA 203(b) program with needed repairs of less than $5,000 are required to meet Minimum Property Standards for an FHA mortgage. These properties can qualify for FHA Section 203(b) mortgages if the purchaser and lender establish a repair escrow at the closing for the completion of repairs within 90-days of the closing. This is not a gift from HUD. The sales price remains the same and is added to the mortgage. No repairs prior to closing.

    UI (Uninsurable)- a property that requires extensive repairs after the closing and is not eligible for FHA mortgage insurance. Properties listed as "UNINSURED" means that certain repairs and or improvements are required to be eligible for an FHA 203(k) mortgage. The required repairs on most of these properties exceed $5000.00. Purchasers of these properties have the option to purchase "as-is" with cash or conventional financing. These properties are also eligible for an FHA 203(k) mortgage if the required repairs and or the improvements are completed within 90-days of the closing.

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  • 14. What is the Good Neighbor Next Door Program?
     

    Good Neighbor Next Door (GNND) is a program that allows law enforcement officers, teachers, firefighters and emergency medical technicians the opportunity to purchase a HUD home for 50% of the HUD appraised value. They are sold prior to placing the home on the market through a Lottery process at HUDHomestore.com. For more information on GNND click here.

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  • 15. What are Good Neighbor Next Door, Dollar Homes or Nonprofit Discount Homes?
     

    If you are considering purchasing a HUD home, or if you are a Realtor representing a buyer of any kind, you need to know about the special HUD programs. These programs encourage the development of communities as the home owned by HUD is offered for sale. The "special HUD programs" link above will provide you the knowledge you need to understand if you or your buyer qualify.

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  • 16. Where can I find the contracts needed for a HUD offer?
     

    Each property on HUDHomeStore.com will contain, with the listing, the documents each Asset Manager is utilizing. Click on the Addendum tab and save the contract package appropriate for your buyer. Be sure and do this prior to submitting your offer as this information will no longer be readily available at HUDHomeStore.com once your bid is accepted.

    If you forget to obtain these documents, and the property is no longer showing, click on the Property Contacts tab of HUDHomeStore.com. Enter your Case Number or street address. Note the Asset Manager listed and visit their website. Most of the Asset Management companies are posting their contract document packages also on their sites.

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  • 17. I am a real estate agent and have a client who wants to make an offer on a HUD home. What do I need to be able to do so?
     

    As a selling agent, you must work under a Broker who has obtianed (and annually renewed) a HUD Name Address Identifier (NAID). First ask your broker for their NAID as it will be required to enter your offer at HUDHomeStore.com. Confirm that your Broker has renewed their NAID in the last year.

    If you are a real estate primary broker and do not have a NAID, here is the link to the forms required and where to return them. Please be careful to include all the attachments required on page 2 of the SAMS 1111 under the column labeled SB.

    Please be advised it can take 3-4 weeks to obtain a new NAID number or to have a renewal activated if a year has passed. For this reason, Wilmoth Group offers a referral program to brokers who do not have a NAID number but do have a client wishing to make an offer on a HUD home. Please send an email to joel@wilmothgroup.com for more details.

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  • 18. Can I get the appraisal or see the appraised value for a HUD home?
     

    No!  Unfortunately, as of June 2014 this answer has changed.  You can read more here.

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  • 19. Will the bank allow repairs required for our mortgage before we close?
     

    NO!  Sorry..we have never seen any owner, corporate or one with sense and a good advisor, allow a potential buyer complete repairs required for a mortgage prior to closing. That is just a really bad idea. Your best hope is the seller will make some repairs that are needed to close. With bank owned properties though, the most common response from the seller is "did they not understand what I meant when I said sold as-is"? In other words, ask your mortgage lender for a better way to handle the problems..like a post closing repair escrow.

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  • 20. Will This Home Qualify For FHA/VA Financing?
     

    FHA and VA loans are sometimes the most competitive options in rates and availability. However many properties that are "Bank owned", are sold "As Is" and most likely will not pass FHA inspections/appraisals. In additions to this, the Seller/Bank will not do the work for the property to pass inspections/appraisals. A buyer attempting to purchase an REO property with FHA financing, often experiences cancellation of their contract due to inspection/appraisal issues. These cancellations often will cost the buyer in lost dollars for inspections and appraisals.

    A possible alternative would be FHA/203k. This would entail that you work with the lender upfront to have the FHA inspector/appraiser view the property before submitting an offer to see if the property could be financed by this method. An offer could then be written with 203k financing and extra time could be requested for repairs estimates and a projected closing date.
    HUD homes designate if they will qualify for FHA financing. See the HUD home FAQ for more information.

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  • 21. What Are The Details of the Fannie Mae Deed Restriction?
     

    If you are placing an offer on a Fannie Mae forelcosure, in order to receive an acceptance of your offer, you will be required to accept some special restrictions. These restrictions are added to the Deed you will receive at closing, making it impossible to ignore and subsequently are called the Fannie Mae Deed Restriction.

    The exact language used on this deed restriction is as follows:

    Buyer cannot sell/encumber property for more than 120% of purchase price for a period of 3 months from the date of close.

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  • 22. Why can't I find a property on HUDHomestore.com that is listed as Active in my MLS/BLC and Wilmothgroup.com?
     

    When the property does not appear on HUDHomestore when entering the case number, and it still shows active on the MLS/BLC or at WilmothGroup.com, it means HUD has closed bidding in order to accept a bid and try to bring it under contract. We have not been informed to change the status in the MLS/BLC or WilmothGroup.com because the home is not under contract. HUD has simply decided to close bidding. The way you can confirm this is to click on the Property Contacts tab and enter the case number. You will see that the case number is correct, and the contact information is still posted for access by the public who may have a problem or the selling agent for their reference.

    Because the property is not officially contracted, these often reappear on HUDHomestore for more bids. We suggest monitoring HUDHomestore daily while watching the status on the listing services and our site. When the status changes to pending, you will know the home has officially been placed under contract.

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  • 23. How do I find forms for a Pemco property?
     

    Visit Pemco's website at HUDPemco.com and click on the "Forms" tab. Then select the appropriate region (Indiana-1A, Florida-2A). While you are at their site take a look around and learn even more about Pemco HUD homes!

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  • 24. How Do I Submit An Offer?
     
    Submitting an Offer On A WILMOTH Group listed Home

    In order to make certain your offer to purchase a WILMOTH Group listing is received and processed in a timely manner the following steps are recommended.

    First- check the Realtor only comments in the MLS/BLC listing sheet to see if there are any special instructions regarding the property or how the seller is processing offers.

    Our requested method to submit an offer is one pdf file emailed to offers@wilmothgroup.com. Please do not submit offers by email with 6 attachments composed of each page of the offer in a single .jpg file. Not only is this very inconvenient, but also jpg files tend to average 1mb or more and the message is very large.

    If you must use a fax, then please fax the offer to 888-627-6551.  This should be your last option.

    Please note: HUD and Fannie Mae owned properties have their own unique procedures. Accounts must be set up at HUDHomestore.com and/or HomePath.com

     

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  • 25. Is There An Easy Way To Learn the Process of Selling HUD Homes?
     

    HUD has changed procedures from showings to bids, from repair escrows to closings!  All licensed sales agents need to get knowledgeable fast.  WILMOTH Group is a HUD Local Listing Broker and we have the information you need.

    WILMOTH Group now regularly offers a training session called "Successfully Selling HUD Homes". This training is free and open to all real estate professionals. You will come away with every thing needed to market yourself as a HUD home expert.  To review when and where our next trainings are offered, please visit here and register!

    If you are more of a "do-it-yourself-er" we have you covered also.  Just visit our HUD Resource Center for videos, frequently asked questions and posts loaded with guidance on the HUD selling process.

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  • 26. How do I get a termite inspection and will HUD address any issues related to termites?
     

    HUD homes are sold as-is but owner occupant buyers, using FHA financing, will have the chance to eradicate termites at HUD's expense. All other buyers who discover termites will need to treat and repair after the closing of the purchase at their own expense.

    The first step is  for the buyer to complete a home inspection within the 15 day HUD inspection period.  Remember, the inspection period is not qa contingency period.  The inspection is completed to provide the buyer full knowledge of the home's condition.  If termites are found, or damage related to termites, the buyer's agent needs to contact the Field Services Manager (FSM) assigned to the property to inquire as to procedures. The FSM will likely confirm the termite issue with their own inspection. Treatment and any repairs will be completed for the FHA buyer only.

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  • 27. Corporate-Owned Contracts and Addendums
     

    All corporate-owned properties utilize their own contracts and addendums. They will supersede the original state association documents or any other purchase document. Please make sure your buyers understand that they are basically negotiating terms and then the seller's contract or purchase agreement addendum will become the official contract for purchase. Addendums are not available until a transaction has been negotiated. The seller prepares them once the terms are agreed to. Your buyer will have a very short time (24-48 hours) to review. These seller contracts and addendums are not a negotiable document. The addendum will include the agreed to terms, plus language that will state the property is being sold in "as-is" condition and some very specific deadlines. If the buyer can't live with anything they discover in the addendums, then they should tell you to tell us to cancel the agreement. If we do not hear from you and receive the executed contract or addendum, with earnest money, within the requested time line... we will be required to put the property back on the market. If your buyer then decides they wish to proceed, it is very likely the bank will make them renegotiate the transaction.

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  • 28. Are there any restrictions on a Licensed Buyer Commission being paid ?
     

    There are a few Banks/Sellers that will not pay a licensed buyer commission if agent and buyer are one and the same or if agent is a principal in company that is purchasing the property. Call or email the office prior to writing an offer if you need this to be clarified. In most cases, the seller's contract will further state is no payment will be paid to a licensed buyer.

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  • 29. What does "Proof of Funds" mean?
     

    It is strongly recommended that your offer be submitted with a proof of funds or a preapproval letter.  In fact, many corporate, and investor, sellers insist on receiving proof of funds with any offer.  A proof of funds provides assurance to the seller that the proposed buyer has financial capacity to perform on their offer.

    Corporate sellers will likely favor offers that specifically show the proposed buyer's financial capacity to complete the purchase as proposed.

    For a buyer using borrowed funds the pre-approval should include the amount for which the buyer is qualified, type of loan, contact information for the lender, and a current date or no more than 30 days old.

    Cash offers should have a proof of funds letter or a copy of a statement showing funds available in excess of the purchase price. Current bank statements or recent letters (less than 7 days old) from a bank representative are acceptable documents.

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  • 30. Can I submit a back-up offer on a bank-owned home?
     

    The bank will have us hold any back up offer in situations where we are managing the bidding process (NOT HUD or Fannie Mae). If the accepted deal falls out, the bank may, or may not, ask for the back- up offers first. They often tell us to place the property back on the market and let all parties resubmit new offers. Unfortunately, if it is pending it means we have an accepted offer and the bank is not requesting or considering any more offers.

    When we have posted a listing as "Active- Back Up Offers" the frequent question asked is: "Noticed you are taking Backup offers. Is there still time to get one in?" Back up offers status means the bank has accepted an offer and not all documents are executed. It is our way of trying to let you know the situation has not officially pended but that there is an accepted offer.

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  • 31. Offer Confirmations
     

    All offers submitted, as instructed, to WILMOTH Group (some corporate owned homes will require an on-line submittal to a third party unaffiliated with our brokerage)  will receive a confirmation of receipt. If you do not receive a confirmation of receipt within one business day of submitting the offer, please send an inquiry to offers@wilmothgroup.com stating the property address, when you submitted the offer, where the offer was submitted, and the buyers name. We will respond back to you with further instructions

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  • 32. How Does A Realtor Schedule A Showing?
     

    Simple! We use Centralized Showings and they can arrange your showing from 8am to 9pm seven days a week.

    You can obtain access information by calling the following numbers directly.

    Florida- 888-998-9005
    Indiana- 866-955-5566

    Or you can call The Wilmoth Group at 877-945-6684 (WILMOTH) and be connected via our voice greeting.

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  • 33. What Should I Do If I am sent a Multiple Offer Form?
     

    When WILMOTH Group receives a second offer on one of our bank owned  listings, all negotiations on the first offer will stop per the banks instructions (unless the bank tells us to accept the first offer already presented.) Our procedure after receipt of a first offer is to:

    Send to all parties with offers submitted, and all future offers submitted, a bank required Multiple Offer Disclosure form. This form to be completed by all buyer's agents. This form MUST be returned with a Purchase Agreement that reflects the buyer's highest and best offer. The Multiple Offer form is specific to each seller and it also MUST be completed completely.

    If your Buyer had the first offer you will be contacted and informed we are now in a multiple offer situation and that you will need to submit a Multiple Offer Disclosure form.

    It is important to advise your Buyer that when a Multiple Offer Disclosure is requested they are being given ONE chance to make their "Highest and Best" offer. Therefore, if your Buyer was the first to submit you may change the purchase agreement if the Buyer so desires (recognizing that there are now going to be multiple offers and those will all be considered highest and best offers). Please advise your Buyer that this is a one time offer opportunity. There will not be requests for revised offers. The Seller might choose one offer to work with and make a counter offer to it but this is your Buyer's one chance to make their best offer.

    The Seller might do one of several things: they might reject all offers, decide to accept one offer or counter one offer. When we have a final decision from the Seller we will alert you.
    Unless the property has moved to an Active B (back up) status, no offer has been accepted. The status will be changed immediately if an acceptance occurs.

    Finally, under NO circumstances will  WILMOTH Group reveal the content of any other offer received. Please DO NOT ask as it reflects negatively on your professionalism and if such practices are allowed they hurt the credibility of our industry.

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  • 34. How does "Multiple Offers" work with bank-owned homes?
     

    If more than one offer is received on a property, the Bank/Seller might chose to respond in several ways. They might ask all for Highest and Best. If a highest and best is requested, final offers will be due by a pre-determined time.  Some banks also have a Multiple Offer Disclosure form that must be executed by the Buyers Agent, the Buyer, or both.

    In a Multiple Offer situation the bank might chose to counter only one offer and reject others.  For a revised offer to be considered, you must complete the requested form within the time frames stated for your buyer. If you choose to not do so - your offer will be submitted in its original form and it will be noted to Seller that you did not complete this form. You may not change or write on this form in any way.. only check the appropriate applicable boxes, and signature lines.

    If the deadline for submission of Multiple Offers has passed, you will be asked to return the Multiple Offer Notification (MON) form ASAP. In this situation, we will submit the original offer as soon as we receive and as submitted. When the MON form has been returned, we will submit the revised offer. Please understand that if this is the situation, offers are actively being negotiated and we have no control over when a Buyer or a Seller will accept an offer."

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  • 35. Are there any offers on this home?
     

    We do not provide this information at the request of our Sellers. We are not representing our Seller’s interest to take any action that will discourage offers. Our job as the listing agent is to obtain as many offers as possible for our clients. Answering this question may encourage somebody not to submit an offer. Please submit offers until the status changes in your MLS/BLC.

    There are some simple things to note. Unless we have noted a property as ActiveB (Active Taking Back Up Offers) or Pending in the MLS/BLC system, you still have an opportunity to submit an offer. Just because we have an offer it does not mean the offer is good or it will be responded to any time in the near future. All offers are submitted to the Seller.

    Another tip is to check at WilmothHomes.com. We show properties as pending as soon as we have an accepted offer.

    ONE IMPORTANT EXCEPTION:

    With third party bidding platforms being made available for direct use by Realtors, some clients (HUD and Fannie Mae for example) may have accepted a bid and we are not yet advised.  This may result in a gap in WILMOTH Group listing a home as Pending and it actually being available for bid.  When a third party bidding site is utilized, it is a best practice to confirm availability FIRST at the bidding site before spending time preparing your bid.

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  • 1. Do you have any information on a Home Owners Association?
     

    If this is a bank-owned property, HOA information is not routinely obtained. However, if we have information, we will gladly provide it as well as any contact information if available.

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  • 2. Can I take possession before the closing in order to start making repairs?
     

    Due to liability risks, the Purchaser is not to take possession until Seller has been funded (closing is final). No repairs to be performed by the Purchaser prior to this time.

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  • 3. Who chooses the title company?
     

    With the exception of HUD owned homes, the bank chooses. WILMOTH (as listing agent) has no say in the matter either. This is due to the fact that the seller has significant amounts of Title work completed during the Foreclosure process. TITLE COMPANY CONTACT INFORMATION COMES WITH THE SIGNED DOCUMENTS FROM THE SELLER. In all likelihood the Listing Agent WILL NOT HAVE this information prior to receiving this document package. We are waiting too and will forward the information as soon as it becomes available. Continued multiple and/or daily queries slow down the process for everyone involved. Please be considerate, we are all working towards the common goal of closing on the subject property.

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  • 4. What happens with Board of Health fees, unpaid taxes, and sewer liens?
     

    Local Boards of Health do not always timely file liens on properties. The title insurance only covers recorded liens. The title company will make all efforts possible to identify any liens that could cloud the Title. These charges will be paid by the seller at closing in order to provide clear title at the date of closing. It is in the interest of your buyer to check with the local Board of Health to make sure there are no outstanding bills that have not yet been recorded. This is the same with sewer liens. Also, if the subject property is a newer build, it is in the interest of your buyer to check if the assessed taxes are correct.

    Notify the Title Company with written records of any pertinent information.

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  • 5. What happens if there are multiple offers for a property?
     

    If the seller receives multiple offers on a property, buyers may be requested to submit their highest, best and final offer by an agreed upon date and time. This is fairly common and the process is handled a little differently by each seller. In all cases except HUD homes, WILMOTH will communicate with all buyers and provide a deadline to change their offer if desired. With HUD homes all bidding is coordinated through HUD and notices will usually come from HUD or an Asset Manager providing the opportunity to rebid for your buyer at the HUDHomestore.com. With HUD homes please remember, WILMOTH does not have any involvement in the bidding process.

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  • 6. Why do I have to provide a Proof of Funds or a Pre-Approval?
     

    As a standard rule, purchasing bank-owned properties requires making available with your offer documentation that the purchaser either has the funds or is approved for bank financing. When a buyer submits this information with their offer, and their offer is accepted, in general it eliminates the financing contingency of the purchase agreement. Why? Because the point of the requirement is to prove to the seller that the proposed purchaser does not face any problems on completing the purchase-they either have funds or a mortgage pre-approval in place.

    When the proof of funds is provided as cash, then the method for purchasing the property needs to be cash. Please do not come back after the offer is accepted and let us know that your buyer now wants to use financing. If you are the buyer, or the agent representing that buyer, if this occurs please be aware that the seller may choose to cancel the purchase agreement and retain the earnest money due to non-performance under the terms of the accepted contract.

    If you submit a pre-approval and it has a lot of contingencies, or it is very sketchy as to how much of an approval it really is, please be aware that the seller may choose to accept an offer that provides a more solid proof of funds. About the only thing that can cancel an agreement that has been accepted with the type of proof of funds required, is a low appraisal. With bank-owned properties, that is extremely rare since in general they are being purchased at a discount.

    Contract and lender letters MUST specify the type of loan and the LTV the borrower is seeking.

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  • 7. How much earnest money must be submitted?
     

    In general, the earnest money deposit (EMD) is negotiable. In the case of HUD homes there are set rules. The HUD rules are actually fairly good guidelines to utilize when making your offer on any bank owned home.

    When bidding on a HUD home a $1,000 earnest money deposit (EMD) is required on all offers for properties listed over $50,000. Under $50,000 requires a $500 EMD.  For vacant lots 50% of the list price is the required EMD.

    A couple of other things to remember when making an offer on a bank owned home.

    Generally, a minimum of 10% is required for cash purchases.

    All Earnest Money Deposits must be in the form of a Cashiers Check or Money Order.

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  • 8. Will I get an answer to my offer over the weekend?
     

    No-unless we are processing responses received on a Friday afternoon. The seller's representatives work normal five day a week schedules and are not available over the weekend. Any offer submitted over the weekend will be presented the following business day. Any offer submitted on line will be date and time stamped. The bank will know when you submitted your offer.

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  • 9. Why does my HUD Sales Contract show "TBD" in the Escrow Amount?
     

    HUD mortgagee letter 2015-17 allows the responsibility of determining escrow amounts solely to the loan underwriters. Going forward, disclosures for properties listed on hudhomestore.com will no longer list escrow amounts. They will now only cite the repairs.

    No longer will a dollar amount be allowed on line 4 of the sales contract. This section of the sales contract will now show “TBD” when the box is checked indicating there is an escrow. This will allow the underwriter to establish the escrow amount without any need for contract amendments.

    This change applies to all new contracts from November 3, 2015 and after. Any existing contracts with an escrow amount on line 4 will fall under the old procedure and may require amendments as requested by the underwriter.

    NOTE: WILMOTH Group is strictly prohibited from sharing any information on HUD homes conditions we may have gathered in the evaluation process. WILMOTH Group will not divulge or give any amounts to buyers for escrows. As stated, the determination of these amounts are strictly the responsibility of the borrower's underwriter.

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  • 10. Will the bank pay for any repairs?
     

    Please understand that this home is being sold "AS-IS." If the bank has rehabilitated the home, their scope of work has already been determined and can not be changed. As a rule, ONLY issues which are LENDER REQUIRED will be addressed. REO Asset Managers are VERY familiar with what constitutes a Lender Required repair and will not approve "cosmetic," "dated", or "wear and tear" related issues. Note: with HUD homes no repairs will be made. These homes are already either approved for FHA financing or they are not.

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  • 11. Can the buyer cancel if they find something wrong?
     

    The buyer has the right to cancel the contract and receive their deposit back if they do so within their contractual time frame (unless specifically noted). Note-HUD Homes are sold as-is. A document called the Earnest Money Deposit Addendum which is a part of the contract package details the terms for return of earnest money. Inspections are encouraged on all homes.

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  • 12. How do I get the utilities on in a property I am interested in?
     

    Any inspection requested by the buyer is intended to be only for buyer's information. We will have utilities turned on to accommodate the inspection (with exception of HUD properties where buyer and agent are responsible and coordinated with the Field Services Manager-FSM).

    If a property has to be de-winterized for the purposes of an inspection, buyer will be required to sign an addendum stating "If buyer does not close on property, for any reason, buyer will be responsible for the cost of having property re-winterized by Seller approved vendor"

    Utilities will be turned on if safe to do so. Depending on the timing of the winterization, it is quite possible that plumbing repairs will be needed and the water may not be able to be turned on. Please keep these factors in mind when making an offer. If an inspector/appraiser is unwilling to turn on pilot lights, main water valve, etc., it is the buyer or buyer's agent responsibility to make arrangements to have them turned on and off again.

    Electricity will be turned off as of the day of closing; please make arrangements to have utilities transferred to the buyer.

    Remember- HUD home procedures for utilities are determined by the FSM.  Please contact the FSM listed with the HUD property and follow their procedures for utility activation.

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  • 13. How To Set Up An Inspection?
     

    It is absolutely essential that you give us 3 BUSINESS DAYS NOTICE PRIOR to scheduling your inspection. Some utilities (such as electricity) will likely be on prior to your making an offer, others will not (such as gas or propane) The Listing Agent has NO control over the work schedules of the local utility companies. As such the Listing Agent will not be responsible for re-inspections and/or associated fees. It is not a bad idea to visit the property a day PRIOR to the inspection to check if systems are on and working.
    NOTE: Purchases of HUD homes require a different process for inspections of which we are not involved. If you need to set up an inspection for a HUD home ratified contract you will need to coordinate it with the Field Services company (FSM). They are the only party who can authorize utility activation and approve access for the sales agent, their buyer and the inspector.

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  • 14. Can the buyer complete an inspection?
     

    Just like any other sale, your buyer has the right to fully inspect the property within the frame of the inspection contingency of the purchase agreement. Seller will not order or pay for any inspections.

    The seller, or our company, will not approve any pre-contract inspections. Additional utilities will not be turned on, de-winterizations will not occur. Radon tests will not be performed etc. This is the purpose of the inspection contingency. Assess the property the best you can in the condition it is in (everybody else will be looking at it the same way). Negotiate a successful offer and include an inspection contingency. Then you can complete an inspection and address anything found under approved conditions in an inspection response.

    HUD-owned homes inspection procedures are coordinated with the Field Services company only AFTER the HUD purchase agreement has been ratified (executed) by HUD.

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  • 15. How can I make sure my offer is received?
     

    Realtors-You will receive an email confirmation within 24 hours of submitting your offer. For HUD bids at HUDHomestore.com make note of the confirmation number you receive immediately after submitting the bid.

    Buyers Not Represented By a Realtor- You will receive an email confirmation

    Multiple offers normally result in a request for a highest and best offer. Escalation clauses will not be accepted by the banks.

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  • 16. I am working with a buyer who does not have a Social Security number. Can they place a bid or make an offer?
     

    If your buyer does not have a Social Security number, they will need to have a Taxpayer Identification Number (TIN). These are commonly applied for and issued to non-US citizens who have business or personal interests in the United States that would require paying taxes. The Selling Agent will need to enter the TIN in the same format as a Social Security Number would appear (xxx-xx-xxxx). If they win the bid, the bidder will be required to provide a copy of the letter issued by the United States government assigning them the TIN with the rest of the contract package.

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  • 17. Where do I find HUD home contact information when the listing is not available at HUDHomestore.com?
     

    To find HUD home contact information visit.HUDHomestore.com. There is a link to Property Contacts in the header part of the site. Click on this link and enter the case number or street address. The contacts list tab from the original listing will appear.

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  • 18. If a person buys a HUD home as owner-occupant, how long before they can deed to another person?
     

    HUD's owner-occupant buyer type requires buyers to live in the home for 12 months.  The buyer will be required to sign, along with selling agent, a Certification that they will live in the home for 12 months and have not purchased another HUD home for the last 24 months.

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  • 19. What does a "Cancelled" bid mean on HUD Homestore?
     

    The offer I submitted on HUD HomeStore shows as a "cancelled bid" under "My Bidding History." What does that mean?

    It means your offer was not accepted. From this point you need to see if the property has received another accepted offer or if none of the offers received were acceptable and a new bidding period has started.

    Is the property still listed on HUDHomeStore.com? If so no offers were accepted and if your buyer desires to resubmit their offer, a new bid will need to be prepared.

    If the property is not on HUDHomeStore.com it most likely has a "provisionally" accepted offer. This means the terms have been accepted and the contract fulfillment is taking place. We will also show these properties as pending in the MLS/BLC and WILMOTHGroup.com.  As long as the contract process is proceeding satisfactorily and within terms, the property will not show return to HUDHomeStore.com. If the contract is not completed, we will change the status to Active on the MLS/BLC and WILMOTHGroup.com and the property listing will re-appear on HUDHomeStore.com.

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  • 20. What is the procedure for getting a HUD home de-winterized in order to complete a home inspection?
     

    In areas where winterization is required, all homes will not be able to complete a home inspection without a de-winterization being completed. It will be important that the request to complete a home inspection also note that the home will need to be de-winterized. This request will also go to the Field Services Manager (FSM) noted on the Contacts tab for each property on HUDHomeStore.com.

    Each FSM will have their own procedures but prepare your buyer for a request by the FSM for cash up front to pay for the de-winterization and re-winterization process. The amount to be charged will be set by each FSM so you will have to check with them first. Buyers WILL NOT be allowed to provide their own de/re winterization contractors.

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  • 21. Are all HUD home commissions for the selling agent locked?
     

    HUD home commissions (sales fee) to the selling agent will autopopulate on the sales contract at the rate offered by HUD. In general this rate will be 3%. The selling agent can always accept less for a HUD home commission (sales fee) payment.  Remember that whatever amount you enter on your bid, the selling agent compensation will affect the net amount of the bid.

    Certain properties are designated "hard to sell" properties by HUD and these will have a base $1250 payment as the HUD home commission.  This amount will autopopulate on your bid. In general, "hard-to-sell" properties are homes listed for less than $42,000 or that contain other issues. There is not a specific written policy for when the $1250 will apply. Here is a post from our blog to help you identify these "hard to sell" properties.

     

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  • 22. What does the IN, IE, and UI financing codes mean on a HUDHomestore listing?
     

    What is the difference in the financing codes IN, IE, and UI that show with each listing on HUDHomeStore.com?  These three codes are offered to help provide information to allow a sellers agent or buyer to assess the type of financing available for a listed property. The simplest thing to remember is that these three codes are showing eligibility for FHA 203 (b) financing. The FHA 203 (B) is a program for repairs less than $5,000 where an escrow is created at closing to complete the repairs.

    IN (Insurable)- the property meets the FHA financing requirements and no obvious repairs are needed to insure an FHA loan to a buyer.

    IE (Insurable with Escrow)- these properties are eligible for the FHA 203(b) program with needed repairs of less than $5,000 are required to meet Minimum Property Standards for an FHA mortgage. These properties can qualify for FHA Section 203(b) mortgages if the purchaser and lender establish a repair escrow at the closing for the completion of repairs within 90-days of the closing. This is not a gift from HUD. The sales price remains the same and is added to the mortgage. No repairs prior to closing.

    UI (Uninsurable)- a property that requires extensive repairs after the closing and is not eligible for FHA mortgage insurance. Properties listed as "UNINSURED" means that certain repairs and or improvements are required to be eligible for an FHA 203(k) mortgage. The required repairs on most of these properties exceed $5000.00. Purchasers of these properties have the option to purchase "as-is" with cash or conventional financing. These properties are also eligible for an FHA 203(k) mortgage if the required repairs and or the improvements are completed within 90-days of the closing.

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  • 23. What is the Good Neighbor Next Door Program?
     

    Good Neighbor Next Door (GNND) is a program that allows law enforcement officers, teachers, firefighters and emergency medical technicians the opportunity to purchase a HUD home for 50% of the HUD appraised value. They are sold prior to placing the home on the market through a Lottery process at HUDHomestore.com. For more information on GNND click here.

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  • 24. What are Good Neighbor Next Door, Dollar Homes or Nonprofit Discount Homes?
     

    If you are considering purchasing a HUD home, or if you are a Realtor representing a buyer of any kind, you need to know about the special HUD programs. These programs encourage the development of communities as the home owned by HUD is offered for sale. The "special HUD programs" link above will provide you the knowledge you need to understand if you or your buyer qualify.

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  • 25. Where can I find the contracts needed for a HUD offer?
     

    Each property on HUDHomeStore.com will contain, with the listing, the documents each Asset Manager is utilizing. Click on the Addendum tab and save the contract package appropriate for your buyer. Be sure and do this prior to submitting your offer as this information will no longer be readily available at HUDHomeStore.com once your bid is accepted.

    If you forget to obtain these documents, and the property is no longer showing, click on the Property Contacts tab of HUDHomeStore.com. Enter your Case Number or street address. Note the Asset Manager listed and visit their website. Most of the Asset Management companies are posting their contract document packages also on their sites.

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  • 26. I am a real estate agent and have a client who wants to make an offer on a HUD home. What do I need to be able to do so?
     

    As a selling agent, you must work under a Broker who has obtianed (and annually renewed) a HUD Name Address Identifier (NAID). First ask your broker for their NAID as it will be required to enter your offer at HUDHomeStore.com. Confirm that your Broker has renewed their NAID in the last year.

    If you are a real estate primary broker and do not have a NAID, here is the link to the forms required and where to return them. Please be careful to include all the attachments required on page 2 of the SAMS 1111 under the column labeled SB.

    Please be advised it can take 3-4 weeks to obtain a new NAID number or to have a renewal activated if a year has passed. For this reason, Wilmoth Group offers a referral program to brokers who do not have a NAID number but do have a client wishing to make an offer on a HUD home. Please send an email to joel@wilmothgroup.com for more details.

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  • 27. If my buyer finds something major in their inspection can they get their earnest money back?
     

    One of the most commonly asked questions and the black and white answer is that HUD Homes are sold as-is and buyers need to be diligent when preparing their offers. When submitting a contract package, there is a Forfeiture Addendum document that the buyer will execute. This document spells out the terms of return of earnest money. These terms do vary from an owner-occupant purchaser to an investor. There is also condition (vi) that states earnest money could be returned "for other good cause, as determined by HUD". Most of the questions I receive on this issue as it relates to an inspection will fall under this condition. So, buyers should be prepared that there is not a inspection contingency as would be the case with many other types of purchases, and the buyer will be executing this document stating they understand that to be the case.

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  • 28. Can I get the appraisal or see the appraised value for a HUD home?
     

    No!  Unfortunately, as of June 2014 this answer has changed.  You can read more here.

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  • 29. Can I assign the purchase contract after it is accepted?
     

    No - Corporate sellers do not allow assignments of contracts.

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  • 30. Will the bank allow repairs required for our mortgage before we close?
     

    NO!  Sorry..we have never seen any owner, corporate or one with sense and a good advisor, allow a potential buyer complete repairs required for a mortgage prior to closing. That is just a really bad idea. Your best hope is the seller will make some repairs that are needed to close. With bank owned properties though, the most common response from the seller is "did they not understand what I meant when I said sold as-is"? In other words, ask your mortgage lender for a better way to handle the problems..like a post closing repair escrow.

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  • 31. Will This Home Qualify For FHA/VA Financing?
     

    FHA and VA loans are sometimes the most competitive options in rates and availability. However many properties that are "Bank owned", are sold "As Is" and most likely will not pass FHA inspections/appraisals. In additions to this, the Seller/Bank will not do the work for the property to pass inspections/appraisals. A buyer attempting to purchase an REO property with FHA financing, often experiences cancellation of their contract due to inspection/appraisal issues. These cancellations often will cost the buyer in lost dollars for inspections and appraisals.

    A possible alternative would be FHA/203k. This would entail that you work with the lender upfront to have the FHA inspector/appraiser view the property before submitting an offer to see if the property could be financed by this method. An offer could then be written with 203k financing and extra time could be requested for repairs estimates and a projected closing date.
    HUD homes designate if they will qualify for FHA financing. See the HUD home FAQ for more information.

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  • 32. Why can't I find a property on HUDHomestore.com that is listed as Active in my MLS/BLC and Wilmothgroup.com?
     

    When the property does not appear on HUDHomestore when entering the case number, and it still shows active on the MLS/BLC or at WilmothGroup.com, it means HUD has closed bidding in order to accept a bid and try to bring it under contract. We have not been informed to change the status in the MLS/BLC or WilmothGroup.com because the home is not under contract. HUD has simply decided to close bidding. The way you can confirm this is to click on the Property Contacts tab and enter the case number. You will see that the case number is correct, and the contact information is still posted for access by the public who may have a problem or the selling agent for their reference.

    Because the property is not officially contracted, these often reappear on HUDHomestore for more bids. We suggest monitoring HUDHomestore daily while watching the status on the listing services and our site. When the status changes to pending, you will know the home has officially been placed under contract.

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  • 33. How do I find forms for a Pemco property?
     

    Visit Pemco's website at HUDPemco.com and click on the "Forms" tab. Then select the appropriate region (Indiana-1A, Florida-2A). While you are at their site take a look around and learn even more about Pemco HUD homes!

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  • 34. Is There An Easy Way To Learn the Process of Selling HUD Homes?
     

    HUD has changed procedures from showings to bids, from repair escrows to closings!  All licensed sales agents need to get knowledgeable fast.  WILMOTH Group is a HUD Local Listing Broker and we have the information you need.

    WILMOTH Group now regularly offers a training session called "Successfully Selling HUD Homes". This training is free and open to all real estate professionals. You will come away with every thing needed to market yourself as a HUD home expert.  To review when and where our next trainings are offered, please visit here and register!

    If you are more of a "do-it-yourself-er" we have you covered also.  Just visit our HUD Resource Center for videos, frequently asked questions and posts loaded with guidance on the HUD selling process.

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  • 35. How do I get a termite inspection and will HUD address any issues related to termites?
     

    HUD homes are sold as-is but owner occupant buyers, using FHA financing, will have the chance to eradicate termites at HUD's expense. All other buyers who discover termites will need to treat and repair after the closing of the purchase at their own expense.

    The first step is  for the buyer to complete a home inspection within the 15 day HUD inspection period.  Remember, the inspection period is not qa contingency period.  The inspection is completed to provide the buyer full knowledge of the home's condition.  If termites are found, or damage related to termites, the buyer's agent needs to contact the Field Services Manager (FSM) assigned to the property to inquire as to procedures. The FSM will likely confirm the termite issue with their own inspection. Treatment and any repairs will be completed for the FHA buyer only.

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  • 36. How to order a Lead-Based Paint inspection for an FHA buyer?
     

    For homes built prior to 1978, with owner occupants using FHA financing, a lead-based paint inspection may be requested.  The steps involve ordering, performing lead-based paint testing, remediation if needed, and payment.   The process begins when a HUD contract, that indicates FHA financing will be used, is accepted and ratified by HUD.  The Asset Manager will initiate a work order to the Field Sales Manager (FSM) to inspect for any lead-based paint.  The FSM will use HUD’s contractor to perform the clearance test and recommend any remediation.  For the FHA financed buyer only, HUD will handle the remediation and cost.  This all will occur before closing.

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  • 37. How do I schedule a HUD home inspection?
     

    If you have received acceptance of a bid for a HUD home, you are NOT yet ready to order an inspections  HUD home inspections can only be ordered once your sales contract has been executed and then ratified by HUD.  You will receive notice of the ratification and at that time you may begin the process of ordering a HUD home inspection.

    The home inspection for a HUD owned home must be scheduled through the Field Service Managers. Return to HUDHomestore.com and click on the tab for Property Contacts. Enter the state and case number and the contacts will appear. Contact the Field Service manager listed and let them know that you want to schedule a home inspection for your accepted bidder. There are Utility Activation Request forms on our website or at the Asset Managers. These will need to be completed to request the utilities be activated. The FSM will have utilities turned on for a 48 hour period within an allowed period of 15 days after your contracts ratification. Each FSM has their own procedures so do not assume anything until you have the paperwork required to proceed. Things to plan for with your buyers for the utility activation request:

    1. In states where winterization is required, it is a year round process. Buyer will be charged a de/re winterization fee.

    2. The winterization fee is non-refundable

    3. The fee must be paid in certified funds or a money order.

    4. Buyer will pay to have utilities activated and will be responsible for turning them off.

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  • 38. Can a buyer make their HUD offer contingent on a home inspection?
     

    No!  A buyer may not make their offer for a HUD home contingent on a home inspection.  It also may not be added to a contract after acceptance of a bid.

    HUD homes are sold in as-is condition.  A HUD sales contract does NOT provide for a home inspection contingency.  For reference, there are often documents available on the property condition posted under the Addendum tab at HUDHomestore.com.

    It is recommended that all Buyers complete a home inspection.  A 15 day period (after the contract is ratified by HUD) is permitted for such an inspection.  While no contingency is allowed in the contract, after an inspection a buyer may decide to cancel their contract with HUD.  In doing so, they should review and understand the Earnest Money forfeiture guidelines that they acknowledged when executing the HUD contract.

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  • 39. What closing costs will HUD pay?
     

    When preparing line 5 of the Sales Contract, you will be able to request up to 3% of the bid amount for closing costs over and above those to be paid by HUD.  These closing costs can include most costs associated with a buyer obtaining financing or closing the transaction.  Please include in your calculations that HUD will not pay the cost of title insurance or the settlement.  Therefore, these costs could be included in any request on line 5.

    HUD will automatically pay certain closing costs at settlement. Other closing costs may be paid by HUD in accordance with the terms of the form HUD-9548, Sales Contract. In an effort to ensure that purchasers, real estate brokers and/or sales agents, HUD’s management and marketing contractors, and HUD’s contracted closing agents are provided with consistent information, the following list distinguishes closing costs that are automatically paid by HUD and those which may be paid if amounts are indicated on Lines 5 and/or 6a of the Sales Contract.

    The following is from HUD Notice H2001-13 that provides some specific guidance for different types of closing related costs.

    Closing costs automatically paid by HUD

    • Proration of property taxes and any special assessments such as HOA fees, utility bills.

    • Settlement or Closing Fee if closing agent is registered in the HUD Buyer Select program

    • Transfer Charges and Recording Fees for the deed only

    Closing costs which may be paid by HUD

    • Broker's Sales Commission for the Selling Broker Only paid if indicated on Line 6A of the Sales Contract.

    Additional Allowable Closing Costs to be paid if sufficient funds are indicated on Line 5 of the Sales Contract.

    Purchasers may specify a dollar amount on Line 5 of the form HUD-9548, Sales Contract, that they expect the Department to pay towards their financing and closing costs. HUD will not pay more than the actual cost of an item, and will not pay a total amount greater than that requested in Line 5. As HUD will only pay the actual closing costs, not to exceed the amount requested on Line 5 of the form HUD-9548, Sales Contract, any monies remaining after the allowable closing costs have been paid will NOT be credited to the purchaser(s) at sales closing.

    Additional allowable closing costs that may be paid by HUD at sales closing:

    • Appraisal Fee: If there are sufficient funds on Line 5, HUD will pay for the appraisal on an FHA 203(k) loan that is necessary to determine the “after rehab” value or appraisals needed to obtain other financing if there are sufficient funds on Line 5

    • Credit report: Up to $20 will be paid if there are sufficient funds on Line 5

    • Flood Certification: If the property is being offered with FHA insurance, is on a Flood Plain, and there are sufficient funds on Line 5, HUD will pay for Flood Certification

    • Home Inspection: If there are sufficient funds on Line 5, Inspection fee of up to $250 will be paid

    • Homeowner’s Warranty: The amounts that will be paid vary by state.  Florida it is limited to $325 and Indiana $400.  This payment is  provided there are funds available from Line 5

    • Loan Discount Points: If there are sufficient funds on Line 5, up to 3 percent to buy down the rate, with certification from lender

    • Loan Origination Fee: If there are sufficient funds on Line 5, up to 1 percent will be paid on Conventional/FHA loans; up to 1.5 percent will be paid on FHA 203(k) loans

    • Recording fees and transfer charges for the mortgage:  If sufficient funds are on Line 5, fees will be paid; otherwise, these are the purchaser’s costs.  In situations where the purchaser is prohibited from paying all or any part of such fees, such fees should not be paid by either HUD or the purchaser since HUD is exempt from paying it and the purchaser is prohibited.

    • Survey: If required by Lender and sufficient funds on Line 5

    • Title Insurance Coverage For the Lender: If sufficient funds are on Line 5, coverage will be paid

    • Title Insurance Coverage For the Owner:  If sufficient funds are on Line 5, coverage will be paid

    The above represents the complete listing of allowable closing costs in conjunction with the sale of properties owned by HUD

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  • 40. How Long Is the Typical Response Time for HUD offers?
     

    There really is not any one answer to this question.

    The selling agent must become familiar with the bidding process and timelines at HUDHomestore.com. The easiest thing is to find the property, and look on the listing page in the upper left part of the page.  Review the Bid Submission Deadline and the Bid Submission Time Remaining.  Based on the type of property, and the stage of the bidding process, the response time for HUD  could be as short as one hour or as long as 10 days.

    Once you have this bidding time identified, then note that your bid will be reviewed in the next business day and you should be able to log in to your HUDHomeStore.com account after 12 noon to review the status of your offer.

    Generally, if your bid is accepted you will receive an email advising you of the next steps.

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  • 41. What is the HUD $100 down payment program?
     

    There are 2 different $100 down payment programs that buyers might be able to take utilize:

    First is the Good Neighbor Next Door program, searchable on HUDHomestore.com but limited in applicability. See more information on this option here.

    Most likely what you are seeing reference to is a FHA financing program for HUD Homes for FHA buyers.  You can learn more here.

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  • 42. How do foreign nationals make bids on HUD homes?
     

    HUD homes may be purchased by residents of other countries (referred to as foreign nationals), provided they can secure financing or pay cash for the property. Buyers of HUD homes need to have legal status in the United States in order to purchase as an owner occupant or investor.  This means they need to have a registered individual tax identification at minimum to make a bid.

    When a bid for a foreign national is submitted, a valid identification number must be entered into the Social Security Number field. If the purchaser does not have or is not able to obtain a Social Security Number, they must have an Individual Tax Identification Number (ITIN) prior to submitting a bid.   A copy of the ITIN letter from the IRS will be required to be submitted to HUD if the bid is accepted. Also, if the foreign national is intending to purchase a HUD Home as an owner occupant, the purchaser will be required to show proof of ability to live in the U.S. in order to satisfy the minimum one (1) year occupancy requirement (e.g., permanent residency card, work visa, etc.).

    Foreign buyers who have an ITIN:

    On the Bid Submission form (part 11), select the “Foreign ID” option. Type up to 15 letters and numbers of a purchaser’s foreign identification in the SSN/EIN/ID# field. Only letters or numbers are allowed.

    Buyers who do not have a US address:

    For the required State and ZIP Code fields, use the state and ZIP code of the property you are bidding on. Then fill the Address and City fields with the buyer’s non-US address information

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  • 43. Will HUD Accept A Back-Up Offer?
     

    It is never possible to submit a back-up offer to HUD..   When a bid has been accepted for a HUD home, the property is removed from the listings on HUDHomeStore.com.   At this time, no more bids can be submitted.  HUD or the Asset Managers will not accept offers any other way than the electronic bidding at HUDHomeStore.com.  The Local Listing Brokers are not able to submit additional offers.

    Back-up offers with HUD only occur when the HUD Asset Manager sends an email to the bidding broker and asks if an existing bidder would be willing to have their bid that has not been accepted held as a back up offer.  If responding yes, this in no way obligates the buyer to proceed if the back-up offer is ultimately accepted.  It is also possible that some period of time measured in weeks or even months may pass and HUD will return to bidders who indicated they were willing to have their bid held as a back-up offer.  The key here is that the bid was made via HUDHomestore.com prior to another bid being accepted.

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  • 44. Will HUD return earnest money if defective drywall is found in an inspection?
     

    If a purchaser has an accepted bid and completes a home inspection where chinese/defective drywall is identified, will the buyer be able to cancel the contract and receive their earnest money back?   HUD homes are sold as-is.  This means a buyer assumes risk associated with the property's condition.  When submitting an accepted contract, a buyer will execute an Addendum A to the Sales Contract called a Forfeiture and Extension Policy. The terms of forfeiture of earnest money deposits are covered. While defective drywall risk is not specifically cited, it is possible that an owner-occupant purchaser could request a refund based upon the open ended "other good cause" clause.  It is unlikely that an investor purchaser who chooses to not complete the transaction would receive a refund of their security deposit.

    Please be sure and be completely familiar with all the terms of the Forfeiture and Extension Policy agreement when submitting an accepted contract package.

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  • 45. Why are the Agent Coop Fees showing as .01%?
     

    A HUD offer is a unique offer as the listing agent is not providing an offer of cooperation.  There  is no actual agent coop fee offered.  In the HUD Sales Contract the selling agent contracts with HUD for payment. This payment does not come from the Listing Broker.  It does not mean you will not get paid.  It means you need to build your payment into your bid understanding the seller, HUD, will pay a maximum 3% or $1250 for listings labeled as "enhanced commissions".      

    The MLS/BLC Listing services require an entry in the selling agent cooperative offer.  The uniqueness of HUD sales is something that the Boards and their listing partners are aware of and this method of presentation of the cooperative offer has been approved due to the limitations of the systems.

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  • 46. How much is a Selling Agent paid for a HUD home?
     

    All HUD listings will reflect a maximum 6% total commission, split between the selling and listing agents. The selling agent is free to write into their clients big any amount up to 3%.

    HUD has no plans to increase the commission percentage beyond 6%, but may do so on a case by case basis. There is one exception that HUD calls "Enhanced Commissions." For more information on this topic visit this post from our blog.

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  • 47. As a Selling Agent how do I learn to sell a HUD home?
     

    Are you a selling agent?   Please come to one of our classes on selling a HUD home.  Offered in Indianapolis and Florida monthly, this session will make you much more knowledgeable and prepared to work with HUD homes.  See our current schedule.

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  • 48. How can I get some clues as to a HUD property condition?
     

    If you are trying to get an idea if a HUD  property condition will be acceptable for your buyer, here is the place to start your review.  At HUDHomestore.com look up the property and then click on the Addendums tab.  Scan the documents and see if the Property Condition Report (PCR) is listed.  Open up this document and review it.  This can help an agent and their buyers determine whether an inspection of this property is merited to meet their objectives.

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  • 49. Do I have to resubmit my Buyer's bid everyday when in the Daily Bidding cycle?
     

    HUD homes will be offered through HUDHomestore.com in a bidding cycle that initially is a sealed bid period followed by a daily bidding cycle.  If the buyer still wishes their bid to be considered, it will have to be resubmitted daily.  Of course, the buyer may wish to consider making changes to their bid to make it more aggressive if their bids are coming back "Cancelled" the next day.

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  • 50. Who do I make a HUD escrow check payable to and where do I send them?
     

    Please have your buyer obtain an escrow check with the following suggested procedure.  Please note the process is different based on the specific asset manager.  With the Buyer Select closing program, introduced in late 2013, there are very specific steps to follow. THEY ARE NOT THE SAME FOR EVERY PROPERTY.  Please review the specific instructions by downloading the appropriate Asset Manager letter from our website.

    Earnest money (escrow) checks are $500 if the contract price is under $50,000.  $1000 for $50,000 and over.

    Escrow checks are supposed to be in the agent's hands when agent submits a bid.  These checks need to be in the form of a cashiers or certified funds.

     

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  • 51. Why is a listing on HUDHomeStore.com but not my local MLS/BLC?
     

    If it’s on HUDHomeStore.com it should be in the MLS/BLC.  If the listing is on the HUDHomestore.com and not on the MLS or (BLC), contact the agent under the “Agent Info” Tab for questions about the property especially for showing instructions.

    Exception-Lottery Round:

    The Lottery round open to Good Neighbor Next Door (GNND), or a non-profit, government Agency.  Bidding opens to owner occupants after 7 days and then should be on the MLS/BLC.

     

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  • 52. What are the amounts for the HUD contract closing extension fees
     

    The HUD contract closing extension fees that are due with the "Request for Extension of Closing Date" form are as follows:

    Contract Sales Price Extension  Fee
    <$25,000 $150 ($10/day)
    $25,000-$50,000 $225 ($15/day)
    > $50,000 $375 ($25/day)

    The extension fee will be retained by HUD.  In the event that the purchaser closes prior to the end of the extension period, the unused, prorated portion of the extension fee will be credited to the amount due at the closing.

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  • 53. How do I get the FHA Amendatory Clause form executed for my HUD purchase?
     

    This addendum is not required and will not be executed on HUD sales.  HUD sales are exempt from this requirement due to the FHA appraisal completed prior to HUD placing the home on the market and the valuation it produces for an as-is listing price.

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  • 1. What if a tenant is placed in my property and they quickly need to be evicted?
     

    As hard as we attempt to screen all applicants (with credit, employment, previous rental and criminal history reports) there are no guarantees that your new tenant has a history that predicts future performance. When all of our screening is not enough, and we evict a tenant within the first six months of tenancy, WILMOTH protects our owner clients with an EVICTION PROTECTION GUARANTEE. Simply, after the eviction is completed, WILMOTH will NOT charge a new Finder Fee to locate a new one!

    We want to avoid evictions at all costs. We offer this GUARANTEE to move a lot of the risk from our clients to us if the tenant does not work out.  It also means we have skin in the game, with you, in selecting the best tenants.

     tenant-screeningHow WILMOTH Tenant Screening Reduces Evictions

    Life as a rental property owner can be either sweet or sour and it usually starts with the people who occupy your property. When we are renting a property it is always exciting to be told by a potential tenant that they wish to complete an application for rent. The application process is a most important step to determining whether or not to enter a lease.

    Read More

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  • 2. How Do You Screen For Tenants?
     

    WILMOTH utilizes the most thorough screening process in the industry to determine the approval of tenant applicants.  Interested applicants are directed to our screening/application website to determine if they want to proceed.  Once they elect to make application the entire process can be completed on line from the site and most of the criteria can be reviewed for consideration within 24 hours.   The screening is a combination report compiled through computer databases and human interaction. Each applicant is reviewed for their credit history-to include FICO scores, eviction history and past residence checks, employment and wage confirmations, and state and national criminal database checks. We then utilize this information and apply it to an approval matrix to determine the level of acceptability of a tenant. If the matrix tells us to approve a tenant, we contact the owner for the final review.
    This thorough screening method has allowed our eviction rate to be one of the lowest in the industry and allows us to offer our Eviction Protection Guarantee to all of our management clients.

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  • 3. What if you find out my tenant is violating the lease?
     

    Tenant-behaviorUnfortunately, tenants break leases.  Several questions are reviewed when this occurs.

    Is this a great, good, or bad tenant?

    Does the tenant realize they are violating the terms of the lease?

    If the tenant is a great or good tenant, they may not be aware they are violating the lease.  If they are a bad tenant the lease violation may be the straw that breaks the lease!

    We occasionally have to place tenants in our "Behavior Modification" program.  The idea with this program is that a great or good tenant needs to be put on notice of their lease violation and given a chance to fix the problem.  Bad tenants do not qualify for this program.

    Examples where behavior modification may be used are making random lease payments, not paying late fees, unapproved pets in properties, or using the back yard as additional parking.  With behavior modification we will:

    Notify- give the tenant notice that there is a lease violation and determine a path to resolution.

    Implement-implement the resolution plan with a strict deadline for remediation.

    Inspect-to determine if the remediation was successful

    The reason behavior modification is only offered to great and good tenants is nine times out of ten it will be successful.  With bad tenants, there is such a low probability of success, rarely is it worth trying to remedy.  The path taken should be to include the violation in the eviction.

    We believe in tenant behavior modification and work with all parties to make it a success!

    Indianapolis Property Management

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  • 4. How will WILMOTH find a tenant for my rental?
     

    rental-websitesFinding great tenants for rentals is a multi-part process.  We start with identifying the likely renter and building marketing of the property to match the tenant.  In some communities, a sign is all that is needed.  In others, signs may not be allowed.  Often word of mouth through the real estate community of a great rental is an important part of the process.  Most importantly though, a recent study indicates that over 90% of potential renters begin and continue to use the internet to find current homes available for lease.  At WILMOTH, we know that our marketing must include signage and word of mouth marketing, but those traditional methods of advertising properties for rent are now in addition to the most powerful method..internet positioning. While most people may be able to place an advertisement on certain websites, few owners or even people involved in real estate have access to the massive amount of websites where WILMOTH places home listings.  Over 75 marketing sites now will include your home for lease!  A sampling of these sites include:  web marketing

    In addition to these sites, your home will be listed on local broker listing services to include Realtor.com and local based Realtor listing sites.  Of course, your home will be available at WILMOTHGroup.com and our local rental sites. When it comes to marketing your rental..WILMOTH Group will have the market saturated with access to beautiful photos, information on the rental and showing scheduling.

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  • 5. Why Do You Want To Use Email-Can't We Just Talk?
     

    Please understand that you will get the fastest, and best, response if you utilize email. We work as a team and often your question or request needs to be routed to the right party. We are able to work most efficiently when all parties have access to the written word. We know many people still want to discuss on the phone their questions and requests. We respect that, but we also emphasize that you will get the fastest, most accurate, response when you utilize email.  Sure..we can give you a call.  In fact, we enjoy talking just as much as you!  Your question will likely be answered much faster though if we can utilize our systems and team to research and respond via an email.  Plus, we always have a written record of past discussions.

    If you just have to talk..go ahead and call us. But now you know why we prefer to use email.

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