Filling out a HUD1 form for short sale.

What lines do the back taxes go on?

Buyers Side:

"Adjustments for Items unpaid by seller "

Lines 210 & 211

Seller Side:

“Adjustments for Items unpaid by seller”

Lines 510 & 511

I need to show these being paid for by the bank/seller…of course its a short sale so the bank will be paying these not the actual seller. (even though they are the sellers responsibility).

Any ideas where to put this so the numbers work out right on the “bottom line”

Anywhere on the sellers side of the Hud.
You are trying to show the bank what they will net if they accept your short.
I don’t even use an actual hud 1. I use an excel spreadsheet.
Start from the top, show the sale price, transfer tax, warranty deed, overnight fees, back taxes, etc…show the bank what they will net and that is what they will expect if agreed.
Good Luck

Thanks for the Reply Propertygirl.

I’ve tried to send them a settlement statement and all of them required a hud1. Maybe they just don’t want to talk, but everyone needs it.

Being that is what most banks want, I’d like to learn the basics of filling one out correctly. Talked to two different title companies and they didn’t understand the short-sale thing, so they seemed lost also. (It must be me…damn I hate to admit that)

So what is everyone else doing to bypass the hud1’s?

There is no bypass. YOu have to submit it as a part of your package.

Yet no one has filled one out?..strange.

I don’t mean to come off bad here, but I’ve talked to 3 title companies and got 3 different answers…most have no clue what a short sale is, so getting the HUD1 to read right is throwing them too.

I can understand if you (the investor) is willing to pick up ALL costs, but I’m not paying for last years & this years taxes.

So, who is paying for the taxes? If you don’t then you don’t get the short sale.

Or your price will just be higher.

Maybe you are explaining the wrong thing to the title company. It doesn’t matter what they know about. All that matters is they know how to fill out the hud. Thats it.

Don’t get caught up in explaining the short sale. that isn’t their profession, it is yours.

The hud is only preliminary any way. Just get a sample of estimates from them and fill the hud out yourself.

I do my own huds all the time, and when its time to close, then the title company does the final. So cost might not be the same. Who cares as long as the banks get their net?

Here’s what I did. Instead of even dealing with the hud-1, I just sent an offer letter with net offers.

To: Lender
From: Investor
Date: Today

Blah blah blah. I am making the following offers on the mentioned loans.

Loan ABCD1: $145,000.00 NET To Lender
Loan ABCD2: $2,000.000 NET To Lender

Why did I do this? I was trying to make the LM’s life easier, and I was trying to make life easier for people that the LM submits the package to for approval. Instead of showing them some big number, then nickeling and diming that number to death.

Actually, when I talked to the LM after faxing in this letter, I noted that the only thing I was missing from the package now was a prelim hud-1. They noted that my offers were NET figures and said not to worry about it. The LM would show the NET offers for approval … then if accepted, I would submit my formal hud-1 for the package.

I don’t know if the lenders really care about how nice and streamlined the package is. But if the approval people see complicated hud-1s all day long, then see my nice little NET offer … it could make a difference in their judgment. But I really have no way of knowing right. Although I’ll say that this particular deal went like this:

  • Owner bought new house in brand new sub in Sep 2005 for around $225k.
  • Made a couple payments on the 1st loan, no payments on the 2nd HELOC.
  • Despite the payments, after penalties the balance is right around $225k (split is roughly $175k + $50k).
  • Tried to sell at $235k to cover commission. No dice.
  • I think they need to sell at $205k to $210k to get it to move.
  • I ran my numbers as if I were to sell at $199k.
  • Made NET offers of $145k + $2k = $147k.

You still have to fill out a hud before they take you serious. You are making things harder for them by not following the system they are accustomed too.

The hud is a simple form once you fill it out a few times. Look at others deals you have done, and get acquainted with that hud.

It will make sense to you.

Since the taxes are escrowed, won’t this make a difference?

I have no problem paying the taxes, as long as my price is lower. Its all paper money, but seems to confuse them & me.

So far, the banks are only worried about contract price, they didn’t mention taxes & closing costs until a price was agreed upon. Shouldn’t the taxes & closing be included into that?

I can see why so many give up before they even get started in this business…I won’t give up on this.

Thanks for you help, its greatly appreciated.

If you can afford it find a real estate attorney who can do this for you. You will need one in the future when you close this deal or others you are working on.
That being said I still do not have an attorney and have yet to secure my first deal but I’m presently working on three short sales all of which have required a hud-1. What I did was to look at several hud-1 statements from friends and family to get a general idea of what was going on. I then filled out the hud-1 putting all costs on the buyers(me) side. Mind you my offer reflected me picking up all costs , but I felt this would make thing simpler for myself and the bank.
The website has a good document on what goes where on the hud-1 as well as a PDF hud-1(you can fill out right there).
Any comments on my strategy, that is putting all costs on my side?

Anyone know a good but not expensive R.E lawyer in the Chicago loop or south side area? One who knows who to do sub-2 and lease option deals? Thanks