William Sexton

The home building industry new website, BuilderOnline http://www.builderonline.com, has ranked Raleigh as the 6th healthiest housing market in the United States.

According the article, "Another state capital with multiple universities, Raleigh was still adding jobs at a 2.6 percent rate last year. With a population of more than 1 million, it also has one of the highest rates of population growth of any top metro market in the country over the last five years: nearly 5 percent annually. Though the price of a median home here, $223,400, is above the national average, it is well below other cities in the Mid-Atlantic and Northeast. The metro area has added roughly 65,000 jobs since 2005, and employment held steady last year".

William "Art" Sexton
Sexton@RERNC.com
www.Raleigh-Real-Estate.biz

Here is an overview of the HUD Foreclosure buying process as well as some helpful tips for success.

What is a HUD Home?

A HUD home is a home or vacant land that was purchased with an FHA loan (government insured). When the homeowner defaulted on their mortgage, the FHA paid off the mortgage lender and took possession of the home and is relisting it for sale.

Where can I find HUD Homes for sale?

While there are lots of sites that try to sell you this information, there are only two free websites you need to access:

• For homes in North Carolina, visit http://www.hmbireo.com which is a free site to search for HUD homes. It is the offical listing of HUD homes and is updated every Friday with new listings
• HUD Homes are listing in the Triangle MLS and so you can find them listed in the MLS search on my website http://www.raleigh-real-estate.biz

DO NOT REGISTER WITH A SITE THAT REQUIRES A FEE TO VIEW HUD LISTINGS!

Advantages of purchasing a HUD home?

There are many advantages to purchasing a HUD home. First, HUD will allow the buyer to receive up to 3% in Closing Costs and your broker a commission of up to 5%. 3% is most of what typical closing costs will run with lenders fees, attorneys fees, etc. and so there’s very little money required out of pocket. Also, all HUD homes are offered to owner occupants first before investors so you, as an owner occupant, stand a better chance to win the bidding process.

How to View & Purchase HUD Homes

Unlike a traditional owner sale, you will need to enlist the services of a HUD registered real estate broker, such as myself. HUD homes can only be accessed by HUD brokers and HUD brokers are the only ones who can submit your offer to HUD. While the offer is initiated with standard paperwork and contracts, the offer is submitted electronically to the HUD system.

Tips for Purchasing HUD Homes

• Remember that all HUD homes are available for bids during a 10 day period starting on Friday and ending the Sunday of the following week at 11:59pm.
• The offer price is based on an as-is appraisal. HUD will not accept offers less than 50% of their as-is appraisal. Offers that exceed the appraisal price will require that the buyer bring the difference to the closing table as that amount cannot be financed.
• You do not need another appraisal. HUD will supply your lender with a copy of the appraisal upon request. If they perform another appraisal, the values HUD will rely on are those found in their report.
• Owner occupants get first priority. If an offer is not accepted or received by the end of the offer period, the property is available for All Bidders. All Bidders offers are reviewed every evening and posted the following day.
• All offers are reviewed at the same time with the highest net to HUD being the winner. Net includes your closing costs and commissions.
• A property condition report is available for viewing on the HMBI website for every HUD listing. This is not a home inspection and you should hire an inspector after your offer is accepted.
• If the sales price is less than $50,000, HUD requires an Earnest Money Deposit of $500. For prices greater than $50,000, $1000 is required. For vacant land, HUD requires that 50% of the listing price is held in escrow. The Earnest Money is held in your real estate broker’s trust account.
• Remember that all offers are reviewed on the Monday after the 10 day period has lapsed.
• Get approved for a mortgage through a FHA Lender BEFORE submitting an offer. Any changes to the offer after acceptance will result in your offer being set aside. The most common scenario is a married couple buying their first home discover that one of them has bad credit and can’t go on the loan. Don’t let this happen to you.
• Always offer to close within 45 days even if you can close earlier. It is much easier to close earlier than ask for an extension later. You can ask for one free and after that HUD will charge for extensions.
• Due to numerous cases of mortgage fraud, HUD is now investigating owner-occupants. One or more persons must be a permanent resident of that address for at least 1 year. The penalties for falsifying your status is a $250,000 fine and/or a prision sentence of not more than 2 years.
• DO NOT MAKE ANY REPAIRS OR IMPROVEMENTS TO THE HOME BEFORE CLOSING!!! Yes, this happens far too often and if discovered, they will be removed and discarded.

Insured, Insured with Escrow, and Uninsured

When you are looking at HUD homes, look for these three terms to determine the condition of the home. It has nothing to do with insurance but rather the home’s eligility for FHA financing. Insured properties are eligible for FHA 203(b) financing. Insured with Escrow means that estimated repairs are in an amount less than $5,500 required to bring the house up to minimum FHA 203(b) standards. The amount will be added to any offer that you make.

For example, a listing will say $2000 insured with escrow (stained carpet, holes in drywall). If you made an offer of $140,000 and it was accepted, your loan amount would be $142,000. At closing, the closing attorney will hold back the $2,000 to pay a contractor for the repairs required to meet minimum standards. The buyer has 90 days to have the repairs completed. This is not available to buyers without an FHA loan.

Uninsured means that the property requires repairs that exceed $5,500. For that type of property, a FHA 203(k) loan will allow buyers to borrow up to an additional $30,000 for repairs.

Buying a HUD home can be a great way to get started in homeownership. The government does make it easy to get into these properties with very little money down. Mind you, these places aren’t for everyone but if you are handy and have some extra cash coming in every month, a HUD home may be the right choice for you.

William Art Sexton
Sexton@RERNC.com This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
www.raleigh-real-estate.biz

The Rurual Economic Development Fund is what it use to be called, now it's just a part of the USDA, and the goal is to provide mortgages, and incentives for the purchae of homes in less "densly" populated areas.

Although 100% financing with conventional mortgages is out and FHA with down payment assistance is no longer available, you can get 100% financing through a USDA loan. Just about the only 100% options area VA and USDA.

There are certain eligibility requirements that must be met in order to obtain a USDA loan. Some of the eligibility standards that determine if you qualify for a USDA loan for your home include what county and zip code the home is located in, your current income and credit history, as well as the number of dependents you can claim.

Borrowers who qualify for a USDA Rural Development home loan have the flexibility to pay nothing out of pocket for a down payment. That means a borrower can finance up to 100% of the appraised home value. Or, a borrower can have a gift or grant go toward a down payment with no money out of pocket.

Also, USDA loans require no mortgage insurance payments. Unlike an FHA guaranteed home mortgage, a USDA Rural Development home loan does not require mortgage insurance premiums to be paid by the borrower. That means more money can go toward the mortgage payment each month.

So, in Wake County, NC that would be the areas in Apex, Holly Springs and Wake Forest. All of Fuquay and Garner qualify for a USDA mortgage and parts of Durham qualify as well as all of Johnston County.

Again, it's a no money down loan, with no PMI! To learn more and to see if a home is in an eligible area, visit the USDA site at http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

And if you want more information about qualifying for a USDA home loan, please contact me and I can put you in touch with a loan officer that specializes in these types of loans.

William "Art" Sexton
Sexton@RERNC.com
http://www.raleigh-real-estate.biz

North Carolina General Statute 47E requires you to fill out a property disclosure statement when you sell your property.

Click on the "Property Disclosure Statement" link to review the information needed and download a copy of the form in "PDF" format before you put your home on the market for sale: Property Disclosure Statement

You must provide a disclosure statement to all potential purchasers in connection with the sale (unless the tenant is already occupying or intends to occupy the dwelling), even if you are selling your home on your own. Except in cases of:

• Newly constructed, never occupied homes
• Transfers from one co-owner to another
• Transfers to a spouse or persons in the lineal line
• Transfers between spouses as a result of a divorce
• Transfers pursuant to a court order, foreclosures, bankruptcy, or by trustees or estate administrators
• Lease with option to purchase contract where the lessee occupies or intends to occupy the dwelling
• Transfers between parties when both parties agree in advance not to complete a residential property disclosure statement
  

Don’t forget that even (and especially) during these rough real estate times, you still must disclose everything and anything you know about the house. Failing to make the proper disclosures, those that have the potential to affect both the current and future value, sale-ability and livability of the property, is illegal. It can get both you and your agent into serious trouble.

So what if there are things even you didn’t know about the property to begin with? Investing in a home inspection before you list your home can reveal all sorts of things that should be disclosed to a potential buyer – even if they are things you have no intention of addressing before you sell. By the same token, if something is found during the course of the inspection that you know would be a real issue to potential buyers, you many want to get whatever it is repaired or replaced so buyers need not even have to think about the time and money it would take to fix it after move-in. Having a copy of that inspection available can actually be a great selling tool as well, showing buyers that you have left no stone unturned.

Disclosure forms are documents that must be signed and dated by both you and your Realtor and then offered to any potential buyers. A good mantra to have is – “if there’s a question about it – disclose it.” Some common items to disclose may evade your radar but are nonetheless of great importance to a potential buyer. Things like a noisy neighbor, trees encroaching onto the property, proximity to busy streets, golf balls regularly being hurled into your backyard, short term rentals in surrounding houses – in other words, anything YOU would want to know before buying a home. Don’t forget to include construction problems you’ve encountered with the original builder of your home, improvements you’ve made without permits being signed off, and electrical issues you’ve had when too many hairdryers get used at the same time.

Don’t let the buyer discover insurance claims against the property when he or she applies for coverage. Get them a CLUE (Claims Loss Underwriting Exchange) report. Only homeowners can obtain it, but buyers can make their entire purchase contingent upon seeing a copy of it.

Of course, potential buyers must also be told of a death that occurred within the house during recent years. Just ask about the breadth and the extent to which you must disclose. But as I said -- when in doubt, don’t leave it out.

William "Art" Sexton
Sexton@Raleigh-Real-Estate.biz
www.Raleigh-Real-Estate.biz