HAFA and Inspections

Hello, I am currently working several short sales and learning something new each and every day. On a HAFA sale, buyers submitted a lower offer than the bank approved amount. (The bank approved amount is "high" and we were actively trying to get it reduced. I think the offer is a very good offer.) Question: We wrote in the REIN short sale addendum that all inspections will be completed within 6 days after third party approval. BOA has countered (Won't give any cc on a conventional; I never knew!) Also, they removed our inspection time of 6 days. Can someone please explain what BOA/HAFA allows for Home and Termite Inspection timelines and why they might have removed these days. When should the buyer do the inspection with the bank recognizing? Thank you very much.

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Permalink Reply by Kari A. Battaglia on November 13, 2011 at 2:19am

Hello Jen - I don't know about other agents but I require any short sale buyers to conduct their inspections upon the effective date not lender approval.  I do not want to go through the short sale process and then find out at the 9th hour that the home is unacceptable to the buyers. Buyers who are serious about the home do not object to this requirement and it will also save the buyer valuable time only to find out there is something about the home that is unacceptable down the road.  As to your question about BOA removing inspection timelines I would image they too don't want to waste their time with a buyer that might not accept the home in the end. 

Permalink Reply by Jen Basnight on November 13, 2011 at 4:22pm

Thank you Kari, This information was helpful.  I do wonder, are all your buyers willing to fork out close to $1,000.00, (HI, Termite, Appraisal)  only for a bank to come back in a month or so to say they won't approve the sale?  Thanks.

Permalink Reply by JACK L UNTHANK on November 13, 2011 at 5:14am

They remove it because on ashort sale the buyer is buying it " as is "   .

Permalink Reply by Jen Basnight on November 13, 2011 at 4:30pm

Thank you, Jack.  I understand they are sold "as is", but most buyers still have the sale contingent on the HI.  It appears BOA doesn't want to recognize the Inspection period.  Question:  If the buyer does wait until the ss is approved then got the inspection within the 6 days, would BOA allow them to get out of the contract if something major was discovered in the HI? If not, I do need to get the buyer to sign off on the change. 

Permalink Reply by Smitty on November 13, 2011 at 2:23pm

I'm with Kari, I have inspections done within 7 days of execution of the contract.  Waiting till the approval can muck the whole deal up.  Short sales need to be treated as regular sales.  The difference is the lender approves the terms.  We have inspections, appraisals, contractor bids, etc., all done UP FRONT.

 

I've had BOA cover closing costs or at least a portion of them on conventional loans.  Is it a HAFA thing?

Permalink Reply by Jen Basnight on November 13, 2011 at 4:45pm

I don't believe it is HAFA.  I am thinking the no cc on a conventional may be coming from the Investor, Bank of Melon?  BOA just services the loan.  Crazy I have always completed all my inspections up front and then our area as a whole starting coaching us to wait until after bank approval.  I can see as a listing agent the benefit of having all the inspections up front but do we really want our buyers spending that money up front when so few offers are fully accepted and approved?  Thank for your good advice.  I will know for next time. 

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