The Bannister Team Prepared for: Compliments of:

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1 Prepared fr: Cmpliments f: The Bannister Team 2338 N. Lp 1604 W. Suite 120 San Antni, TX 78248

2 The fllwing infrmatin will assist yu in understanding hw t purchase a gvernment-wned hme. Anyne can buy a gvernment-hme HUD hmes can be purchased by anyne. While many f the HUDwned hmes in ur inventry are affrdable fr lw t mderate incme individuals and families, there is n incme restrictin n purchasing these hmes. Hwever, a buyer must submit a prequalificatin letter frm a lending institutin r have prf that they can pay cash fr the hme in rder fr a bid t be eligible. Hmes may be purchased by wner-ccupants (thse buyers wh plan t live in the hme fr a minimum f ne year) wh have a pririty bid perid f 10 days. Investrs may als purchase HUD-wned hmes, but their bids are nly accepted if an wner ccupant bid des nt meet the reserved price in the first 10 days a prperty is n the market. Reserved prices are nt published fr any HUD-wned prperty. HUD hmes are sld at market value HUD hmes are initially listed at the "as is" appraised market value. The buyer may ffer any price, but HUD will nly agree t ffers that prvide an acceptable return. The amunt f the acceptable return is nt available. Price reductins may take place if the hme des nt sell s view prperty listings weekly t mnitr inventry and listing prices. HUD hmes are sld "As Is" It is imprtant t understand that HUD hmes are sld in "as is" cnditin. This means that the cnditin f the hme when yu see it is what yu will be buying. HUD r Suthwest Alliance makes n Felicia Bannister Duke Bannister Jr

3 warranties, des nt guarantee the cnditin f any hme, and des nt verify that it cmplies with any lcal cde r zning requirements. Yu must make any necessary repairs after the purchase. HUD may make, r give yu an allwance fr, majr system r safety repairs nly if yu are purchasing with an FHAinsured lan. It is very imprtant that yu get a Hme Inspectin by a licensed prfessinal prir t clsing n the sale t fully understand the cnditin f the prperty. Deadlines must be met When purchasing a HUD hme, yu shuld submit yur best ffer during the bidding perid. In rder t be fair t all purchasers, HUD has impsed timetables that must be met r yur bid r cntract will be cancelled and the hme returned t the market. Once yur bid is acknwledged as the highest net t HUD, yur agent must send in a crrect cntract within 48 hurs r the bid will be cancelled. Generally, clsing must take place within 60 days, "cash" deals typically clse in 30 days. Making an Offer n a HUD Hme Offers n HUD-wned hmes must be made nline thrugh a HUD-registered brker. If yu want t make an ffer n a HUD hme, yu must bid thrugh a HUD-registered brker. The listing brker prvides general services t Suthwest Alliance such as placing a Fr Sale sign n the prperty, listing the hme n the MLS (Multiple Listing Service), prviding a Brker Price Opinin (BPO), perfrming regular prperty inspectins and assisting agents and buyers in the purchasing prcess. The listing

4 brker can refer yu t an agent in yur area wh can help yu with the HUD bidding prcess r the Listing Brker can als wrk with yu t submit an ffer n a hme. Hw t find a HUD hme Yu shuld cntact a HUD-registered brker as instructed abve. These brkers will have a list f HUD hmes in their area, r yu can view HUD-wned hmes by clicking n " Prperty Listings: HUD Owned." Offers must be submitted thrugh an nline bidding prcess All ffers must be submitted by a HUD-registered brker thrugh ur nline bidding prcess. Offers are made via cmputer thrugh the Internet. The electrnic bids are stred in the cmputer system and, at the apprpriate time, calculatins are autmatically perfrmed t determine the highest net ffer t HUD. The highest bid is acknwledged by Suthwest Alliance t yur brker, wh is ntified t send in a crrect, signed sales cntract within 48 hurs. If the cntract is nt received within 48 hurs r is incrrect, the hme will be returned t the market r acknwledged t the next highest bidder. All acknwledged bids are subject t cancellatin if prir sale, electrnic errr, and ther cnditins exist (see Disclaimers). An acknwledged bid des nt cnstitute a sale; nly a crrect cntract that is executed by Suthwest Alliance and returned t yur agent allws yu t prceed t clsing. Listing Time Line New Listings Are Psted n Friday f Each Week Days 1-10 (Owner-Occupant Preference Perid) Pririty will be given t Purchasers wh are wner-ccupants

5 and nn-prfit rganizatins (NPO) fr the first ten (10) calendar days after a new listing is psted. (Owner-ccupants must live in the huse as their primary residence fr at least ne year and may nt purchase anther HUD hme fr tw years. Anyne else is cnsidered an investr.) All wner-ccupant and NPO ffers received during the first ten (10) day perid are cnsidered as thugh they were received simultaneusly. During the next business day, after the initial ten (10) day perid, the M&M Cntractr will review the wner-ccupant and NPO bids received electrnically. Frm these, the bid that ffers the highest net amunt is acknwledged as acceptable, if it meets HUD s requirements. If there are n wner/ccupant r nn-prfit bids received that have met HUD s requirements, Investr bids will be reviewed. Frm these, the bid that ffers the highest net amunt will be acknwledged as acceptable, if it meets HUD s requirements. Bids are nt pened n weekends r federal hlidays and will be pened and reviewed the fllwing business day. Days (All Bidders, Daily Bid Openings) If there are n acceptable wner-ccupant r NPO bids during day 1-10, the ccupancy status is n lnger cnsidered. Bids are reviewed daily, with all bids received n the same day being deemed as received simultaneus. At

6 each daily review, the highest net bid is selected, if it meets HUD s requirements. Bids are nt pened n weekends r federal hlidays, but accumulate as thugh received simultaneusly and pened the fllwing business day. Days 31 and Beynd (All Bidders, 5-day Bid, and then Daily Bid Openings) If a prperty remains unsld, the M&M Cntractr will reanalyze the case and may reduce the price and re-list the prperty beginning n the fllwing Wednesday. Fr five days after the prperty is re-listed, all bids are cnsidered simultaneus, with wner-ccupants given pririty, althugh investrs may bid. If the prperty remains unsld in the fiveday initial re-list perid, then bids are reviewed daily and the bid that ffers the highest net value t HUD (regardless f ccupancy) is acknwledged as the successful bid, if it meets HUD s requirements. Clsing n a HUD hme Clsings are generally within days and held at a clsing agent ffice After yur cntract has been received crrectly, it will be signed by First Prestn n behalf f HUD and returned t yur agent alng with a cntract acceptance letter. The letter will give yu up t 60 days t clse. Once yu are ready t clse, yu and yur agent must schedule

7 the date with the clsing agent indicated n the letter, wh als receives a cpy f yur cntract. Suthwest Alliance des nt set the clsing date with yu r the clsing agent ffice; it is up t yu t d this. Yur brker can assist yu. If yu use the HUD clsing agent, HUD pays their fees. Yu may use yur wn agent, but then yu must pay the fees. If yu use yur wn clsing agent, they must wrk with the HUD agent t clse the seller side f the transactin. HUD will pay sme clsing and sales cmmissin csts HUD will pay up t 5% fr the brker cmmissin. In additin HUD will pay up t 3% f clsing csts. Upn clsing f a HUD-wned hme, HUD will allw deductin frm its prceeds fr purchaser financing and clsing csts cnsidered reasnable and custmary fr the jurisdictin in which the prperty is lcated. The buyer must indicate n HUD Frm HUD-9548 (sales cntract) the ttal dllar amunt HUD is expected t pay twards a purchaser's financing and clsing csts. Hwever, in n event may the csts exceed three percent (3%) f the prperty's grss purchase price. Return f Earnest Mney When yu submit a cntract, yu must depsit earnest mney with yur agent (nt Suthwest Alliance), usually in an amunt f $500 r $1,000. If yu knw yur transactin will nt clse, yur agent must ntify Suthwest Alliance as sn as pssible s the hme can be returned t the market. Yu may have t frfeit all r part f the earnest mney if the sale des nt clse. If the sale is t an wnerccupant and des nt clse due t circumstances beynd their cntrl, the mney may be returned. Please review the earnest mney plicy fr yur area with yur brker befre yu place a bid n a hme.

8 Extensins f time Extensins fr time t clse may be granted in 15-day increments, under certain circumstances. Extensins may be granted at n cst t wner- ccupants under certain circumstances that are beynd their cntrl, such as a delay in financing apprval that is nt due t the buyer. Extensin fees may be charged under ther circumstances. Extensin requests must be submitted t the clsing agent (nt Suthwest Alliance) in writing prir t the expiratin f the riginal clsing date, and accmpanied by a nn-refundable fee, in certified funds, if a fee is required. Cntact yur clsing agent fr mre infrmatin n this prcess. We are HUD certified selling agents. We can assist yu with purchasing a HUD hme. We can ffer yu advice and place bids n yur behalf. Please cntact us s we can discuss what we can d fr yu. Thank yu, The Bannister Team