Arrowhead Escrow Blog

HUD Homes vs Bank REO... Part 1 of 3

 

The next three post are for agents who represent buyers of HUD homes or agents who are interested in getting involved in this niche. Southern California HUD homes are growing in popularity again and it’s been a while since a lot of agents have been involved with them. So this little refresher should help.

 

 

 

Southern California HUD homes are completely different from regular sales or even bank owned REO sales. One of the biggest complaints from agents new to representing buyers of Southern California HUD homes is why certain things aren’t the way they are for other foreclosures. Below is a list of unique processes that apply to HUD homes.

 

 

 

Adding a Purchaser:

 

 

Unlike regular foreclosures or bank owned properties when an agent wants to add a purchaser for a Southern California HUD Home you have to amend the sales contract with an addendum. There are no exceptions to this it must be done.

 

 

 

Removing a Purchaser:

 

 

Also if there are multiple buyers for one home and for some reason or another one buyer needs to be removed from the purchase contract the agent must amend the contract by completing the addendum to remove a purchaser.

 

 

 

Changing the financing:

 

 

If a buyer wants to change their financing on the purchase of a Southern California HUD home, for instance going from a conventional loan to FHA loan they will need to complete the Change Finance Addendum.

 

 

 

All of these changes must be approved by the seller’s agent, in this case PEMCO. Once they are approved, PEMCO will notify Arrowhead Escrow of the changes.

 

 

 

DO NOT SUBMIT THESE DOCUMENTS TO THE ESCROW COMPANY!!!

 

 

 

Again it is important to remember that these are the Governments requirements for all Southern California HUD Homes and not requirements of Arrowhead Escrow. These quirks are just some of the small things that makes buying Southern California HUD Homes different from all other real estate transactions.

 

 

 

Stay tuned for more post on what makes buying HUD Homes unique. Next time we will discuss agent commissions.

--Arrowhead Escrow