A HAFA Refresher
I was recently contacted by an agent who had just received her HAFA certification and wanted to know how to obtain those pre-approved short sale listings that are commonly associated with the government’s HAFA program.
If you are unfamiliar with the acronym, HAFA, it stands for Home Affordable Foreclosure Alternatives, which is the government’s short sale program. As part of this program, you may recall that short sale sellers can receive a $3000 incentive at closing and deficiency judgments will be waived—if (and only if) the seller qualifies for the program.
If you are a HAFA certified agent, than you know that not all banks and not all investors participate in this program. For this very reason, it is sometimes hard to identify whether a specific seller will qualify for the program. For example, a seller with two loans at Bank of America may only qualify for HAFA if both of the investors are participating in the program. You see, even though Bank of America does participate, not all of the investors for which Bank of America services notes participate in the government’s program. (A little bit confusing, I know.)
Another great component of the HAFA program is that short sales can be pre-approved. If there is not yet a buyer for the property and the seller does qualify for HAFA, a package can be submitted and the listing agent and/or the seller will receive a pre-approved purchase price that is good for 120 days.
Obtaining Pre-Approved Short Sale Listings
Let’s return to the question from the agent regarding HAFA listings. This particular agent wanted to know how to obtain the listings for those pre-approved HAFA short sales. Well, a short sale is not like an REO. In an REO the bank (who is the seller) selects the listing agent for the property—generally someone who is experienced with REOs. In a short sale, the bank is not the seller of the home—the bank merely ratifies the purchase contract and approves the acceptance of a purchase price lower than the loan balance.
It is the seller who selects the listing agent. So, to answer the agent’s question about how to obtain these pre-approved short sale listings, you need to go after them in the same way that you would any other listing. There is really no way to avoid hard work, good marketing, a strong sphere of influence, and word of mouth.