Comment submitted by Max Klassen, Broker, RE/MAX Alliance

Allowing Teachers and Officers to purchase homes through this special program without a real estate agent is a bad idea and here are just some of the reasons why: 1. The vast majority of the participants in this program are first time home buyers and are very unfamiliar with the home buying process. 2. The majority of the homes released through this program have serious environmental or structural concerns such as lead based paint, mold or foundation shifting of which I don?t feel they understand the implications. In the Denver, Colorado area homes are being sold through this program that are within a superfund cleanup site. 3. Because the majority of the buyers through this program are first time home buyers, they have many questions. Without a real estate agent representing them they rely on HUD?s M&M contractor and their lender for advice. This creates a situation where lenders and HUD contractors are practicing law without a license by advising the buyers on writing the contracts, interpreting the contracts and advising and making recommendations on such things as inspections, lead based paint, mold and other environmental conditions. This is an illegal practice. 4. HUD?s M&M contractors and HUD designated closing agents are very busy and overwhelmed with the volume of cases that they manage. This is creating a situating in Colorado where not only is there a high turnover rate of these subcontractors, but within these agencies there is a high turnover rate of personnel, which creates a situation of relatively inexperienced employees working for companies that just recently received a HUD contract, trying to help first time home buyers through a cumbersome process that neither party is familiar with. Unknowingly but with good intensions these HUD subcontractors are breaking the law by advising and advocating for the buyers without an agency contract. To make matters worse, their advice is often wrong and inaccurate. 5. HUD?s own contracts such as the Lead Based Paint Disclosure and the main Contract to Purchase are not being filled out completely because these documents according to HUD?s directions require and agent?s signature to be complete. 6. Non-represented buyers are slowing down the process by submitting inaccurate, incomplete paperwork, not following through on bids that they have been awarded, and canceling bids on houses that they have not seen because they ?shop online? and don?t have access to a HUD key. 7. I would guess that the majority of the buyers participating in the program without representation are submitting bids without visiting the property. I have run into several teachers and officers while visiting these homes myself who have ?acquired? a HUD key of there own. Quite often I am finding doors and windows of these homes left unlocked, for what I suspect is someone with a key leaving the house open for a friend who is not represented by an agent with a key. 8. In one condominium complex in the Denver, Colorado market where units are consistently being sold through this program the special assessment to repair structural defects common to the community is more than the purchase price of the units. Unrepresented first time buyers are consistently buying these units, unaware of this situation. 9. On HUD?s main instructional web site the first step on how to buy a HUD owned property it is outlined that the buyers must use a HUD registered real estate agent and the benefits and importance of doing so. It seems outrageous the some of the most vulnerable buyers, buying some of the most seriously flawed homes in designated revitalizations are allowed and even encouraged to do so without representation. 10. This program has potential to be a wonderful boost to a Teacher or Officer?s income and personal savings and to the neighborhoods that these buyers are locating. In my opinion there is no better ?deal? for a home buyer that qualifies than to buy a good Teacher / Officer home. Though most are, unfortunately some of the homes offered through this program are not a ?good deal? at any price. Why is HUD encouraging this very small group of buyers getting the ?best deal going? to save even more money by buying these homes in designated revitalization areas without an agent advocating for their best interest? 11. The deeply discounted prices should allow for the buyers to seek extensive help and advocacy in buying these homes to fully understand the environmental and structural concerns common among them. Max Klassen Broker RE/MAX Alliance 5350 S. Roslyn Street Suite 150 Greenwood Village, Colorado 80111 303-773-3885 maxk@remax.net