ARIZONA effective Nov 17, 2013: HUD no longer selects Closing Escrow Agent

Written by Posted On Sunday, 20 October 2013 12:20

ARIZONA--Effective November 17, 2013, HUD will implement a new “Buyer Select” closing Escrow Agent program.

All buyers whose contracts are executed on or after Nov 17, 2013 in the State of Arizona will be required to select their own escrow company. Previously HUD dictated the Escrow /Title Company to be used to close a HUD Home Transaction.  The selling agent will now be required to complete an addendum providing the name and contact information of the buyer's selected escrow company. This addendum must be submitted with the contract package at the time of bid acceptance.

On a personel note, not all escrow/title companies are sufficently skilled to close HUD Home purchase.

Please note, Buyer escrow fees will now be a buyer’s expense on HUD transaction. The exception-- HUD will pay a portion of the closing fees, only if the buyer [Buyer's Agent] includes closing costs on line 5 at the time of the online HUD bid submission and there are sufficient funds remaining to allow for this fee to be paid. If there are no closing costs included in the bid, the buyer will be required to pay their escrow and closing fees. 

In Arizona it is common practice that the Owner's Title Policy be paid for by the Seller [per the standard AZ Realtor Purchase Agreement]. That is not the case with HUD Home Purchase Contracts. Since HUD uses their own purchase contract form, this cost must be considered when determining the purchase price and the closing cost set forth in the bid on line 5 [Closing Cost to be paid by HUD] of the HUD online bid process by you and your Buyer's Agent.   HUD will use their net proceeds after deducting the Seller Concessions on line 5 to determine the high bidder.

Call me at 623-688-0004 or call Grand Canyon Title [the company that formerly processed the HUD closing contracts for more information.

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