Buyer Select Closing Agent

Program

With Buyer Select your buyer’s are now able to select the title company of their choice.

Be sure to include the buyer select addendum with your HUD purchase contract.

You are also responsible for ensuring that the earnest money ,which should be made out to the chosen title company; is delivered to the listing agent within 2 business days.

CHANGESTHE CLOSING AGENT FEE IS NO LONGER PAID FOR BY HUD. THIS IS NOW A BUYER EXPENSE.

*The closing agent fee can be included in closing costs paid by the seller (Line 5 of the purchase contract).

**Please keep in mind seller paid closing costs are limited to 3% of the purchase price. If you don’t have any or enough funds on Line 5 your buyer will be paying for the closing agent fee out of pocket.

CONTRACT CHANGESOn the second blank of both Line 3 and Line 9 of the sales contract you will need to enter the title company of your buyer’s choice.

*Your buyer must have a title company chosen at the time the contract package is being completed.

**Contracts with “HUD designated closer” or “TBD” will not be accepted and corrections will be required before they can execute the contract.

BUYER SELECT CLOSING AGENT PROGRAM Contract Addendum

This addendum varies per Asset Manager so make sure you are going to their website and completing the packet and addendum found there.

This addendum provides HUD with the buyer’s chosen title company’s contact information.

BUYER SELECT CLOSING AGENT

If the selected title company has never closed a HUD transaction under the Buyer Select Program they will be assigned a HUD Title ID Number.

HUD Title ID Numbers are only assigned when a title company is chosen by a buyer.

Title companies cannot pre-register.

BUYER SELECT CLOSING AGENTThe HUD Title ID Number is linked to each title company’s office address.

When completing the Buyer Select Addendum be sure to use the correct name and address of that specific office. This determines how it will show up on the HUD1.

If they have multiple offices make sure you have the correct address for the office you are using.

ACCEPTABLE TITLE COMPANIES

1. Must be licensed to do business in the state the property is located in.

2. Be regulated by the State Insurance Commission or similar state agency.

3. Be covered by E&O Insurance of at least $1,000,000.

4. Shall provide a Closing Protection Letter when requested.

5. Can not currently be disbarred, suspended or otherwise excluded from participating in HUD transactions or federal programs.

6. Can’t have immediate family members or business associates with a financial interest in the property involved in the closing process.

7. May not violate Title VIII of the Civil Rights Act of 1968.

BUYER SELECT CLOSING AGENTThe Primary Contact Person is not always your closer, but the one person the title company has designated to be in charge of HUD contracts and insure all HUD”s requirements are being met.

The Secondary Contact Person will be the Primary Contact Person’s backup and will also need to be well versed on HUD’s requirements.

If the title company fails to adhere to HUD requirements their HUD Title ID Number can be revoked, financial penalties may be assessed and they could be banned from closing HUD transactions.

EARNEST MONEY

Earnest money must be certified funds.

DO NOT submit earnest money with your contract package. Instead, submit only a copy of the check.

The check is made payable to the closing agent or the buyer’s name. (ABC Title or John Doe)

You will need to deliver the check to the listing agent within 2 business days of bid acknowledgement.

**Your contract will NOT be executed and your bid will be CANCELLED if the earnest money is not delivered to the listing agent within 2 business days.

EXTENSIONS

Extensions are no longer handled by the title company and will need to be submitted to the Asset Manager 5 business days prior to the contract expiration with the Extension Form, required fee and lender letter with current status or proof of funds.

The fee must be made payable to HUD.

HELPFUL TIPS

1.Discuss Closing Agent fees with your buyer prior to bidding to avoid unexpected costs.

2.Make sure the title company your buyer wants to use has experience closing HUD transactions.

3.If you are unsure or have any questions about the Buyer Select Closing Agent Program contact the listing agent for help.