Managing Resales

Presenters:Emily Higgins, Burlington CLTEtta Habegger, Thistle CLT

National Community Land Trust ConferencePortland, ORAugust 17, 2005

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Steps in the Resale Process

Before sale: educate owners Sale: owner notifies CLT of sale Price: setting the Limited Resale Price Marketing: finding a qualified buyer Buyer: the sales contract Pre-closing: working with clients, partners

and funding sources Closing: who attends? After closing: data entry, file cleanup

Burlington CLT Started in 1984 through municipal seed

grant Parent organization of a NeighborWorks®

HomeOwnership Center Statistics

Over 350 community land trust homes in three-county area (200 condos, 6 duplexes, 144 houses)

Also have 270 below-market rental apartments, 125 Co-op apartments, and Commercial and non-profit facilities

CLT has over 2,500 membersApprox. 150 resales, 1987-present

Thistle CLT

Part of Thistle Community Housing, a non-profit CDC with homeownership through the CLT and rental homes

Statistics217 homes throughout Boulder County, Colorado

(work primarily in 3 cities)• Scattered Sites - 5 houses, 4 townhomes• Sunnypoint - 15 condos• Buena Vista - 39 condos, 10 townhomes• Mapleton – 135 mobile homes • Inclusionary zoning condos – 9 condos

47 resales, 1998 - present

Working with potential buyers

Criteria: General homebuyer education course

and individual counseling – can be provided by CLT or partnering agency

CLT-specific education - group or individual meetings – include info about CLT model, available homes, eligibility, CLT process

Required application for income verification

Potential buyers - criteria (cont.) Screening process can include income

and asset certifications CLTs can require minimum available

funds and investment in home Financing - buyer qualifies with lender

(may include down payment assistance programs)

CLTs can restrict buyers to first-time buyer or not owning other residential property at time of CLT purchase

Beginning the Resale

Homeowner informs CLT they want to sell CLT sends template letter explaining

process Must have written notice of intent to sell;

clear expectations re timing are helpful Structure: CLT can purchase directly from

seller (elect to exercise purchase option). If not, then sale occurs directly between seller and qualified buyer.

Sales Price

CLTs may structure their resale formulas in a number of ways, e.g.• Appraisal based• Index based• % increase

Qualified capital improvements may be allowed

The CLT may take a Lease Reissuance Fee Realtors’ sales commissions may be

allowed

Price Example - BCLT

Order fair market “fee simple” appraisal to determine current value

Subtract old appraised value from new appraised value to determine appreciation

Option price calculation: BCLT takes fee from appreciation and determines grant and mortgage for new buyer

Appraisal and calculation to seller

Marketing Options

Notify qualified applicants Website with “homes for sale” Flyers, postcards Local papers Counselors, housing and community

partners, homebuyer classes Open Houses, showings of home Current CLT owners and clients

Buyer Selection

Selection process to determine buyer – options include “first come, first serve,” lottery, creating a score based on criteria

Prioritization may include:Income - % of Area Median Income

(AMI)# in householdAbility to secure loanLive or work where CLT home is located

“The Deal”

Sales Contract • BCLT: Sign Tri-Party Purchase and Sale

Agreement (Seller, BCLT, Buyer)• Thistle: Sales contract between Seller and

Buyer; use CLT Sales Contract Addendum Timeframe set for inspection, financing,

closing Details of deal to attorneys, lender,

funders, title company, Realtors (if involved)

Tracking sheets are key

Pre-Closing

Review financing: GFE, TIL, loan app. Inspection: CLT can negotiate repairs

with seller, buyer Identify Resources for rehab needs, e.g.:

– BCLT has stewardship fund (20% of fees) to help with big ticket repairs

– Revolving loan fund for rehab costs Legal document review meeting

Closing

CLT staff should attend Sign legal docs, bring funds if needed,

gift bag to happy buyer! Take copies of all documents signed by

CLT and HUD-1 Proceeds check – deposit

After Closing

Clean up file: have consistent order Summary sheet of the deal Data into tracking databases Notes about buyer for future story? Make sure CLT gets original recorded

documents back! Stay in touch with new owner (e.g.

Thistle does a check in 3 months after purchase)

Tips

Stay organized: have tracking systems and clear procedures

Try to document steps so they can be duplicated: manual, samples

Clear communication about who does what during process: coordination internally, with clients and other partners

Clear policies and process for exceptions : managers, board, committee?

Presenters

Emily Higgins, Burlington CLT, Burlington VT

ehiggins@getahome.org www.getahome.org Etta Habegger, Thistle Community

Housing, Boulder, CO ehabegger@thistlehousing.org www.thistlehousing.org