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April, Both Buyer and Seller in Potomac, MD

If becoming approved to submit bids on HUD homes is easy to do, why don't most Realtors get approved?

Asked by April, Potomac, MD Thu Mar 27, 2008

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Hi,
Our posts crossed......

Most Brokers will gladly complete the application process if they think agents are interested in submitting bids. More often, an agent approaches a Broker, and the bid deadline is in 5 days. There isn't time to get the approvals and gain registration for this property and the agent only had interest because of the specific property. The Broker intends to register....no one else asks for it....it gets set aside.

The Broker finally registers.....a year goes by and not one agent submits a bid. The Broker forgets to update his/her registration. ..........until...........17 months later, an agent wants to submit a bid.......and ........the Broker registration is expired.......and. the bid deadline is in 4 days.

It really comes down to volume of potential offers to be written.

In some cases......the application process must be completed at a regional office or HQ office of a company with multi offices per the company policy. Independents and franchis owners with one or just a few offices are able to streamline application processes and decisons.

I recently referred a buyer to another Realtor so the buyer could submit a bid on a HUD home. I haven't completed our application process. It was the first HUD buyer we have had in over a year. If I htought we would write a lot of biz....I'd be getting that application process out pronto. It's a chicken and the egg. If we marketed ourselves as buyer agents for buyers looking for HUD homes....we'd probably find buyers who wanted to use us. Chicken and the egg.

Hope that helps.

Deborah Madey - Broker
Peninsula Realty Group - New Jersey
2 votes Thank Flag Link Thu Mar 27, 2008
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
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Hi April,

Bob's second post may have already cleared any confusion.

Bob is correct in stating that the "Broker" must be registerd.

For the purpose of your question....registered or approved could be interchanged. The registration process is not limited to a certain number of Brokers per area. Any Broker who submits a complete application can register. It is a verification process to ensure the integrity of the bids being submitted and to make sure that hackers or game players didn’t submit phony bids. A Broker has to prove their identity by supplying documentation. These documents include active license status, location, and personal ID of the broker, and proof of accurate SS# or Tax ID#. The Broker is responsible for the agents who work under him/her. Once HUD receives the application, verifies complete docs, HUD "approves" the Broker and the Broker becomes "registered." Once the Broker is "registered", an agent working under that Broker may submit bids.

HUD does not require that a licensed agent be a Realtor to submit a bid. Licensing is through a state regulatory office. The National Association of Realtors is a trade organization. Licensed agents who join the NAR become Realtors or Realtor-Associates and abide by the Code of Ethics and by-laws of the association. Not all real estate licensees are Realtors.

Hope that clears confusion.....

Now....in answer to your question. I agree w/ Harryp. If there are very few HUD homes for sale in an area, a Broker is unlikely to have many agents seek access to the online bid system. The Broker doesn't apply for registration because agents do not request such. Most agents work a fairly small geography. Other agents specialize in certain types of properties and may extend to a larger geography within that niche. It is more common for agents to work a geographically defined area, and there usually aren't too many HUDs within any one small area. When one does come up, the agent simply refers it to another agent more knowledeable about the process. Sometimes you can find an agent who concentrates on HUD homes. That agent will often cover a larger geography. If you are interested in HUD homes, I suggest finding an agent who has some experience and will be familiar w/ the forms. An incomplete submission could eliminate your bid from consideration.

A Broker has to renew the registration regularly to keep his/her bid # and access to the HUD system. It really comes down to volume. If there are HUD homes in a specific area and not enough knowledgeable agents, a sharp agent in that area can quickly establish themselves as the “go-to” person. A Broker will gladly complete the application process if he/she has agents who have an interest. I believe the average processing time of an application is a few weeks.

Deborah Madey - Broker
Peninsula Realty Group - New Jersey
2 votes Thank Flag Link Thu Mar 27, 2008
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
April, I would guess that some Brokers don't register with HUD because there just aren't that many HUD properties in their service area or they just don't have agents that want to deal in foreclosed properties of any kind. I take business as it comes my way but "HUD homes" probably are less than 1% of my total business.
1 vote Thank Flag Link Thu Mar 27, 2008
Thanks again Deborah. As usual an answer that hits the nail right on the head and then gives some bonus info as well. I really appreciate it.
1 vote Thank Flag Link Thu Mar 27, 2008
I guess I misundestood your question that a REALTOR® has to be "approved." A REALTOR® doesn't per say but their Broker has to be registered with HUD.......mine is..........it is a simple process.......and I have written offer on HUD properties. Sorry for any confusion my previous answer may have caused.
1 vote Thank Flag Link Thu Mar 27, 2008
I guess I could mean registered. But, it seems like the two answers below are not in agreement. Have either of you (HarryP or Bob) ever purchased a HUD home or submitted a bid on a HUD home for a client?

Harry tells me that "only registered brokers can submit bids but the broker is required to submit an application to become registered" but....

Bob tells me that "A REALTOR® doesn't have to be "approved" to submit a bid"

maybe someone can help clear this us???
1 vote Thank Flag Link Thu Mar 27, 2008
Thanks Bob, that fits the two answers together. But, I still have my first question.

If it is easy for Brokers to become registered so that the Realtors who work for them can submit bids on behalf of their clients why is that so many Brokers are not registered? Thanks....
0 votes Thank Flag Link Thu Mar 27, 2008
By approved, you mean registered? Only registerd brokers can submit bids, and the broker is required to submit an application to become registered. I am told it is not hard to become registered, so are we talking the same thing? To become registered, the broker has to prove who they are and send copies of their real estate licenses, driver license, social security card and more. Not until their application is accepted can they submit a bid.

From the official HUD site:

How are HUD Homes sold?
All properties available for purchase by the public are offered for sale at Internet listing sites maintained by management companies under contract to HUD. Any real estate broker registered with HUD may submit an offer and contract to purchase on your behalf. HUD pays the real estate broker's commission, if included in the contract.

http://www.hud.gov/offices/hsg/sfh/reo/reobuyfaq.cfm

I assume that in areas where there are few HUD homes, the investment of time to keep up on the rules and regs makes it unproductive and that is why there are not more approved brokers.
0 votes Thank Flag Link Thu Mar 27, 2008
A REALTOR® doesn't have to be "approved" to submit a bid on a HUD property for their client. There are, however, HUD forms that have to be used when submitting the offer Vs the local real estate board's forms that are normally used.
0 votes Thank Flag Link Thu Mar 27, 2008
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