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Tips For Completing A HUD Sales Contract
The following is a collection of tips and advise to assist agents when completing a HUD Sales Contract (also known as a HUD-9548) and the related Addendums
Line 1: Type purchaser(s) name and complete property address. Make sure to type in the county.
Line 2: Enter name(s) and style in which tile will be taken. Please match the name exactly as on line 1 and the STYLE they are taking title (individual, married, ect.)
Line 3: Enter bid amount and amount of the earnest money (which is $500 if $50,000 or under or $1000 if $50,001 and over) and fill in that it will be held by HUD. Please send this in a cashier’s check or money order (NO personal checks) paid to the order of HUD.
Line 4: Make sure the appropriate box is checked for the type of financing your buyer is getting and in compliance with what seller’s offering . If FHA 203(b) repair escrow, then check "said mortgage involves a repair escrow amounting to $___" and fill in amount. Also leave blank or enter TBD (to be determined) the three spaces for down payment, mortgage loan amount and the number of months.
Line 5: Enter the amount of financing/closing cost submitted on your bid. What are the reasonable and customary costs the seller will pay? Review HUD Seller Paid Cost Policy.
Line 6: Enter dollar amount of commission to be paid by seller as submitted on your bid.
Line 7: Enter net amount due seller as submitted on your bid.
Line 8: Enter buyer type (owner occupant or investor)
Line 9: Enter in accordance with AM Contractors instructions for closing dates. On the second blank if your purchaser would like to use a different closing agent at their own expense you can fill in the blank with the closing agency they will use (otherwise it will be closed with HUD’s designated closing agent)
Line 10: Enter appropriate back up offer information.
Line 11: Check the appropriate boxes.
Line 12: Purchaser(s) must initial in appropriate space
Line 13: Make sure to write in your purchaser’s phone number under the signature line, and have them date the contract when they sign it. Always have the managing broker sign the contract and the owner/occupant certification in original blue ink signatures.
If this is an investor bid please make sure that the company name is on Line 1 and 2 of the contract. Also make sure that you include the company paperwork and proof of EIN number from the IRS.
Salespeople Using A Power of Attorney for their Broker the proper format for the signature is: “Broker of Record name, by Person Signing contract, POA”
ADDENDUMS
Depending on your type of buyer and property, the HUD Sales Contract will require additional agreements/addendums to complete the package. The following provides a list of documents to be attached to the Sales Contract and others that might be needed. Please note: each Asset Manager presents the Addendums in a unique manner and may also have other form requirements. Other than the HUD contract (that is standardized) please refer to the Asset Managers website under "Forms" to obtain the correct set of documents for that asset manager.
The Asset Manager sites for forms:
Attach the following Addenda:
Certification of Owner-Occupant, if purchaser is an owner-occupant. All bids by owner-occupants, who are purchasing properties listed in the owner-occupant category, must include an Owner-Occupant Certification. The Certification must be signed by the buyers and the selling agent’s broker of record if the offer was submitted as an owner occupant purchase. They have to indicate that they have not purchased a HUD owned home in the last 24 months as an owner occupant and they will live in it for 12 months. If there is another party to the contract, co-signing but not intending to occupy, that party should NOT sign the owner occupant addendum. A letter should be included in the contract package stating the party is on the contract for financial reasons and does not intend to occupy the home.
Sanctions will be immediately imposed upon Brokers, Agents and Investors found to be abusing the system.
Forfeiture & Extension Policy (Addendum A, Rev. 6/15/2009)
Lead Paint Addendum, if the property was built prior to 1978. The Lead Based Paint Addendum is property specific and will be posted with the property listing.
For Your Protection: Get a Home Inspection.
Notice to Purchaser Addendum when the offered amount exceeds the appraised value at the time the offer is submitted.
Radon Gas and Mold Notice and Release Agreement.
Lead-Based Paint Addendum (if applicable)
Flood Zone Addendum (if applicable)
Mortgage Pre-Qualification Letter from a lending institution, if the purchase is to be mortgaged, stating that an in-house credit check has been performed and the purchaser has been pre-qualified for a mortgage up to a specified mortgage amount. The Pre-Qualification letter must
Be on lender letterhead,
Include the Property Address
Give the name(s) of the people listed on the contract
Must be dated within 30 days of the bid acceptance
Have the correct loan amount (must meet or exceed gorss purchase price)
The type of loan
Note that "the credit has been approved", signed by the loan office (no digital signatures)
Cash Purchase
Copy of bank statement verifying funds are available
Account number can be blacked out on bank statements or other documents
Purchaser's name must be on the bank statement or other documents
Statement must be within 30 days of bid acceptance date
Available account balance must meet or be greater than the gross purchase price
.
Avoid Common Errors
To be acceptable, hard copies must contain no errors and done in BLUE ink.
You can’t use white out or liquid paper on a contractual documents.
Do not use a yellow highlighter on the contractual documents. The document will not scan properly for HUD with highlighter on it.
Make sure social security numbers are on listed on the contract.
The buyers name must match exactly on lines 1,2 and 13 on the contract.
Current Selling Broker Bonus Program-How To Claim
Please refer to the instructions spelled out in the announcement.
Also watch the video on the bonus program and what you must do in preparation of your contract package in order to qualify!
- Frequently Asked Questions About HUD Homes
A list of questions frequently asked about the process of buying or selling a HUD home. See if your question is listed!
- Successfully Selling HUD Homes-Agent Training Offered By Wilmoth Group
The new HUD selling process is different and if you are a Realtor who wants to be able to represent a buyer for a purchase of a HUD home...you need to be informed. Trainings offered monthly.
- Bidding On HUD Homes
Learn all about the different property classifications, bidding rules and the process for submitting a bid electronically at HUD HomeStore.com.
- HUD Special Programs
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.
- Forms You May Need
Here is a list of forms commonly used when documenting a bid or following up on an accepted bid. Includes Utility Activation and De-Winterization Requests.
- Contacts Regarding HUD Sales
Here is a list with different contact information for the Asset Managers, Field Service Managers and Closing Agents serving Indiana and Florida for HUD home sales. Also HUDHomestore.com.
- Resource Center
If you are a buyer or an agent seeking to learn as much as you can about purchasing or selling a HUD home, here is a compilation of additional information you may want to review.
