Purchase Offers on Fannie Mae Owned Properties
I recently wrote an offer on a property owned by Fannie Mae during the period that offers were only accepted by owner-occupants. The homepath.com site is pretty easy to use, but you do also need to upload a signed sales contract and Fannie Mae Real Estate purchase addendum. If offers are only being accepted from owner-occupants at the time, then you also have to upload an addendum for that condition also.
My Buyer offered list price and had conventional financing. We were notified within three days that there were multiple offers and had the opportunity to revise our bid. We did revise our bid to an amount above list price.
And I am really at a loss as to what to say to console my Buyer. I imagine that we lost out to a cash Buyer – perhaps at an even lower price.
Some appraisers – even with conventional financing – are making repair requirements. And the bank who owns the property wants nothing to do with that. So, if they can sell to a cash buyer, they will always get preference.
Fannie Mae offers a program called First Look which gives owner occupants the first fifteen days of a listing period to purchase a foreclosed property. Investors have to wait until day sixteen before they can make an offer. If a Buyer with financing is under contract and his Lender requires repairs, he can legally get out of the contract and have his earnest money refunded. The listing then goes BACK on the market and the First Look program begins again at day one. You can see how this would cause Fannie Mae to give preferential treatment to cash buyers.
I don’t want to discourage buyers from making a purchase offer on Fannie Mae owned properties, but I do want you to understand why you have less of a chance winning the bidding war if you are competing against cash buyers.