Closing HUD Properties

Once a bid is accepted and a contract has been ratified there is a set number of days to close on your HUD property. There are several activities that may need to be completed prior to the closing of a property.

Performing the Home Inspection and a Systems Check
All HUD Properties are sold in their "AS-IS" condition, HUD does not make any repairs to the property. As such, it is extremely important that the purchaser performs a home inspection with the utilities activated. The home inspection will provide the most current condition of the property and inform you of any repairs that may be necessary. The gas, water, and electricity should be activated at the time of the home inspection. To activate the utilities a permission form can be found under HUD Forms on our website, this should be completed by the purchaser and agent then faxed in for approval. Utilities may be activated for a period of 72 hours so the home inspector should be scheduled to complete the inspection during that timeframe.

Obtaining Property Documents
After the contract is ratified there are specific documents that your lender may require to complete the sale. These documents are a copy of the FHA Appraisal and the Termite Inspection and can be obtained by using the "Appraisal and Termite Request Form" available under HUD Forms on our website.

Requests for Additional Time to Close
In the event that the property cannot close within the timeframe provided on the HUD Sales Contract, an extension request must be completed to keep the contract from expiring. This extension request must be submitted regardless of the reason for the delay in closing. The "Extension Request Form" can be obtained on our website under HUD Forms. There may be a fee for the extension depending on the reason for the request.

Contract Addendums
Any change to the sales contract requires a contract addendum. The following items may not be changed after a contract has been ratified:

• Sales price (line 3)
• Closing Costs (line 5)
• Commissions (line 6)
• Net to HUD (line 7)
• The Primary Purchaser (the purchaser named on the bid submission)
• Broker Information

Purchasers may be added to a sales contract by using the "Addendum to Add Purchaser" form. Purchasers may also be removed from the sales contract using the "Addendum to Remove Purchaser". Also, if the financing being used to purchase the property changes a "Addendum to Change Financing" must be submitted. Financing may change such as from Conventional to FHA, or from one type of FHA loan to another. If the type of FHA loan is changing such as 203b to a 203b repair escrow, then a home inspection report should be submitted with the addendum. All contract addenda will be reviewed by MCB and either approved or denied. Agents are required to submit any addendum requests on behalf of their purchasers.

Scheduling your Closing
Once the contract is ratified a purchaser has 60 days to close the property, however closings may occur in less then 60 days. A closing date must be scheduled with the HUD-designated Closing Agent. HUD has appointed closing agents on a separate contract to act as its representative in the closing. HUD-designated Closing Agents are assigned HUD properties by county.

Contract Cancellation
In the even that a contract must be cancelled by either MCB or the purchaser the property will be re-listed the following Friday after the cancellation processing is completed. If a purchaser must cancel regardless of the reason then a cancellation request form must be submitted along with an explanation of the reason for cancellation. If the cancellation is due to a loan denial from a lender then the denial letter must accompany the cancellation request. If the cancellation is based on a property condition issue then a copy of the Home Inspection Report should be included with the cancellation request. The decision regarding the refund, forfeit, or 50/50 split of the earnest money deposit is based on HUD guidelines as stated in the "Forfeiture and Extension Policy".