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Negotiating a short sale is often not the first choice of activities for real estate agents and brokers, but those who assist in a HAFA short sale can qualify for certain incentives to participate in the program. HAFA incentives are based on two common objections that brokers have to working with short sales.
The first incentive is a guarantee from HAFA that the broker’s commission will not be discounted on the HUD-1, unless the loan servicer needs to hire someone to assist the broker with the transaction. The total commission may be up to 6 percent of the contract price of the property. HAFA terms do not permit the servicer to ask a real estate professional to reduce this commission on short sales.
A second incentive for real estate professionals is a simplified set of procedures to use when completing each short sale. HAFA has prescribed a streamlined process of listing, selling, and closing the sale of a home in foreclosure. Standardized forms and documents ensure that the seller, the listing agent, and the buyer are all on the same page throughout the entire process.
To facilitate the negotiation process, HAFA provides its own forms for requesting the short sale approval from the lender, including a list of additional paperwork that the lender needs from the homeowner. These documents eliminate any doubt as to what the mortgage loan servicer needs from both the realtor and the homeowner.
The HAFA Short Sale Agreement (SSA) outlines the roles and responsibilities of the servicer and the borrower in the short sale listing process. Each individual SSA also contains key information directly from HAFA regarding the property’s list price, the minimum acceptable purchase price, and the duration of the SSA.
Although the SSA has certain minimum requirements for its content, mortgage loan servicers may amend each SSA in accordance with investor requirements, applicable laws, or local real estate practice.
The listing broker and the homeowner are required by HAFA to cooperate with each other in the marketing and sales process. Homeowners must agree to maintain the property and respond to servicer inquiries, and brokers must always act in good faith by doing everything necessary to close the sale. Serious lack of cooperation by either party may result in the termination of the SSA.
Homeowners with a real estate license may not list their own property when they participate in the HAFA program.
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