Managing Resales Presenters: Emily Higgins, Burlington CLT Etta Habegger, Thistle CLT National Community Land Trust Conference Portland, OR August 17, 2005

Steps in the Resale Process n Before sale: educate owners n Sale: owner notifies CLT of sale n Price: setting the Limited Resale Price n Marketing: finding a qualified buyer n Buyer: the sales contract n Pre-closing: working with clients, partners and funding sources n Closing: who attends? n After closing: data entry, file cleanup

Burlington CLT n Started in 1984 through municipal seed grant n Parent organization of a NeighborWorks® HomeOwnership Center n 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 members Approx. 150 resales, 1987-present

Thistle CLT n Part of Thistle Community Housing, a non-profit CDC with homeownership through the CLT and rental homes n Statistics 217 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, present

Working with potential buyers Criteria: n General homebuyer education course and individual counseling – can be provided by CLT or partnering agency n CLT-specific education - group or individual meetings – include info about CLT model, available homes, eligibility, CLT process n Required application for income verification

Potential buyers - criteria (cont.) n Screening process can include income and asset certifications n CLTs can require minimum available funds and investment in home n Financing - buyer qualifies with lender (may include down payment assistance programs) n CLTs can restrict buyers to first-time buyer or not owning other residential property at time of CLT purchase

Beginning the Resale n Homeowner informs CLT they want to sell n CLT sends template letter explaining process n Must have written notice of intent to sell; clear expectations re timing are helpful n 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 n CLTs may structure their resale formulas in a number of ways, e.g. Appraisal based Index based % increase n Qualified capital improvements may be allowed n The CLT may take a Lease Reissuance Fee n Realtors’ sales commissions may be allowed

Price Example - BCLT n Order fair market “fee simple” appraisal to determine current value n Subtract old appraised value from new appraised value to determine appreciation n Option price calculation: BCLT takes fee from appreciation and determines grant and mortgage for new buyer n Appraisal and calculation to seller

Marketing Options n Notify qualified applicants n Website with “homes for sale” n Flyers, postcards n Local papers n Counselors, housing and community partners, homebuyer classes n Open Houses, showings of home n Current CLT owners and clients

Buyer Selection n Selection process to determine buyer – options include “first come, first serve,” lottery, creating a score based on criteria n Prioritization may include: Income - % of Area Median Income (AMI) # in household Ability to secure loan Live or work where CLT home is located

“The Deal” n 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 n Timeframe set for inspection, financing, closing n Details of deal to attorneys, lender, funders, title company, Realtors (if involved) n Tracking sheets are key

Pre-Closing n Review financing: GFE, TIL, loan app. n Inspection: CLT can negotiate repairs with seller, buyer n 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 n Legal document review meeting

Closing n CLT staff should attend n Sign legal docs, bring funds if needed, gift bag to happy buyer! n Take copies of all documents signed by CLT and HUD-1 n Proceeds check – deposit

After Closing n Clean up file: have consistent order n Summary sheet of the deal n Data into tracking databases n Notes about buyer for future story? n Make sure CLT gets original recorded documents back! n Stay in touch with new owner (e.g. Thistle does a check in 3 months after purchase)

Tips n Stay organized: have tracking systems and clear procedures n Try to document steps so they can be duplicated: manual, samples n Clear communication about who does what during process: coordination internally, with clients and other partners n Clear policies and process for exceptions : managers, board, committee?

Presenters n Emily Higgins, Burlington CLT, Burlington VT n Etta Habegger, Thistle Community Housing, Boulder, CO