Special offer

Can You Offer Less Than the Approved Price on a HAFA Short Sale?

By
Real Estate Agent with Long and Foster Real Estate VA License # 0225089470

Can You Offer Less Than the Approved Price on a HAFA Short Sale?

This was a question that came across an Internet forum last night from a buyer in Bristow, VA.   Questions that buyers have regarding Short Sales are often best answered by starting from the listing side.

 When a seller has been approved for a HAFA Short Sale, there are three things they are gaining. 

1)  The absolute certainty that their Short Sale is going to be approved. 

2)  A guarantee that there will be no deficiency judgment issued against them. 

3)  A monetary incentive in the form of $3,000 to help them relocate.

Sellers are given 120 days to get a contract that meets the terms laid out by HAFA.  This includes a pre-determined sales price.  The Short Sale bank has already determined the value of the home and given the Listing Agent a net sales price that must be received.  So the Listing Agent will determine a fair list price by taking the commissions to be paid, any closing costs that may be typical for a buyer to receive and closing costs of the seller into account and adding them to the net required by the bank.   In some cases, if you call the Listing Agent and ask if the list price reflects closing cost assistance you may not need, you can lower the offer by that amount and the seller will still be gaining their HAFA benefits.

Going lower than what HAFA has laid out as acceptable is not something a seller, particularly when they have time left in their 120 marketing period, is likely to do.  The time when a seller will see that trying the route of a traditional Short Sale, without the benefits of HAFA, is when they are nearing the end of the 120 day marketing period and, as such, facing foreclosure.

The best thing a buyer can do when looking to make an offer on a HAFA approved Short Sale is to consult with an experienced Short Sale Agent that they can have representing their side of the transaction.  An experienced Short Sale Agent is not just for sellers, but buyers too.  What buyer wants to waste their time in a contract that is going nowhere?  Get the same level of knowledge you would insist on if you were the one selling in a Short Sale.  Get yourself an experienced and successful Short Sale Agent and the difference between legitimate opportunities and time wasters will become clear.

Comments (9)

Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

Hi Chris Ann - Great explanation on a topic that I've actually run across - peripherally - a couple of times in the last two weeks. Reading your short sale posts, while not formal training, will help me be way ahead of the game when we have a buyer who wants to go that route. Thanks.

Jan 24, 2012 08:43 AM
Michelle Gibson
Hansen Real Estate Group Inc. - Wellington, FL
REALTOR

Chris Ann - I couldn't agree more with one of your last sentences "An experienced Short Sale Agent is not just for sellers, but buyers too."  It is so important the buyers agent can properly educate their client about the short sale process.

Jan 24, 2012 09:50 AM
Peggy Hughes/pha logistix, inc.
pha logistix inc - San Francisco, CA
SF NYC LA

Very informative post, Chris Ann.  As a non-realtor, learning about Real Estate thru AR is so much fun! This post is so easy to read and understand... thank you...

Jan 24, 2012 10:52 AM
Elizabeth Weintraub Sacramento Broker
Elizabeth Anne Weintraub, Broker - Sacramento, CA
Put 40 years of experience to work for you

And buyers should look at the comparable sales and don't just fall victim to assuming that the homes they see for sale represent value.

Jan 24, 2012 12:20 PM
Chris Ann Cleland
Long and Foster Real Estate - Gainesville, VA
Associate Broker, Bristow, VA

Dick:  Glad you are finding these posts useful.

Michelle:  It's no wonder that buyers get so frustrated with attempting to purchase Short Sales.  They hire agents with zero clue as to how the process works.

Peggy:  When someone who doesn't hold a real estate license enjoys a Short Sale post, that's a major compliment.

Elizabeth:  Very true.  Comparables are a huge factor...or should be. 

Jan 25, 2012 03:50 AM
Michael Blue
Home Smart Realty West - Encinitas, CA
REALTOR - 760-889-8877, Encinitas/Carlsbad

HAFA gives the seller breathing room before foreclosure can take place, a win win usually.

Jan 25, 2012 07:53 AM
Chris Ann Cleland
Long and Foster Real Estate - Gainesville, VA
Associate Broker, Bristow, VA

Michael:  Usually.  And it can be very tough to entice a Seller to take an offer below the HAFA approved price before their marketing period is over.

Jan 25, 2012 08:14 AM
Ellie McIntire
Ellicott City Clarksville Howard County Maryland Real Estate - Ellicott City, MD
Luxury service in Central Maryland

Great explanation. Short sales are complicated, but HAFA makes it just a little easier.

Jan 25, 2012 08:41 AM
Chris Ann Cleland
Long and Foster Real Estate - Gainesville, VA
Associate Broker, Bristow, VA

Ellie:  Easier if the Buyers are willing to write at the HAFA approved price.

Jan 26, 2012 03:07 AM