Home Buying in Atlanta>Question Details

Chet, Home Buyer in 30306

I'm interested in a foreclosed (Fannie Mae) house with a listing price of $225,000 (originally listed at $279,000 almost two months ago).

Asked by Chet, 30306 Sun Jan 3, 2010

Would an offer of $175,000 be too little?

Also, if an offer is rejected can you re-offer?

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Answers

10
You can always re-offer, but be prepared for a wait with Fannie Mae.

A recent attempt at purchasing a FM house resulted in delays, confusion, and general distrust of the company. My client put in a good offer, and it took 6 weeks for the offer to be reviewed (and accepted), and another 2 weeks for them to get us the final documents to be signed. Then, when we backed out properly under the terms of the contract, it took them another 4 weeks to say we need to sign their form, and then 2-3 more weeks for the earnest money to be released back to the buyer.

This was in the Macon area, so hopefully you'll have more luck in Atlanta! But, you may want to consider another seller if possible. Oh, and in our case, the offer was for slightly above list price.

Something you may not know is that banks and Fannie Mae/Freddie Mac will often keep reducing the price on a foreclosure monthly until they sell it or they hit some "bottom dollar" number they've set as their minimum sell point. So, you could wait until they lower the price again or just take a stab at the offer. Keep in mind that if the house is only worth 175k to you, then that's all you should pay. If the market value is higher, then others will likely out bid you. Never pay more than what you want in a bidding contest. It's a good practice to set a maximum dollar you want to pay in advance, tell your Realtor, and don't go above it.

On occasion, you'll get a chance to put in your "highest and best offer". This usually occurs if there's several buyers putting in a bid. There is usually no negotiation in these cases, and you won't get another chance to re-offer...you put in the highest bid you're willing to make for that specific property. They owner then chooses the best offer.

Good luck!
1 vote Thank Flag Link Tue Jan 5, 2010
You need an agent - don't even think about opening up this can of worms without a solid experienced agent working for you. I'm also a Fannie Mae appraiser - might be able to provide some insight.

Hank
0 votes Thank Flag Link Wed Jan 6, 2010
Chet,

In my experience with these properties most of them sell close to the current list price.

If you want to offer $50K less than the current list for the property then I suggest you wait for Fannie Mae to drop the price and hope that nobody buys the property between now and then.

If you want to be realistic then take the advice of the other pros here and get an agent and have him/her give you a professional price opinion on this property to see if you are wasting your time.
0 votes Thank Flag Link Mon Jan 4, 2010
Good Evening Chet,

Home valuations are based on comparables in the neighborhood and surrounding areas. Of course in the final analysis when the Lender does their appraisal the house must appraise at the final offering price. At the original offer price of $279,000 the bank reduced the price to $225,000 or -19%. You want to offer $175,000 which would be another -22% off last offer. The point I'm trying to make is you need to do some homework to validate your proposal. Also, I don't know enough about the house to be sure what price is correct. If you have a Realtor you need to ask these questions plus more. If you don't have a Realtor I what be happy to guide you through this process. You can contact me at 678-427-5512 or email me at repayne7@bellsouth.net.

I look forward to hearing back from you soon.

Regards,

Rick Payne
Keller Williams Realty
0 votes Thank Flag Link Sun Jan 3, 2010
Chet,

You need good Real Estate agent that will look up what comparable properties have sold for. This will give you a good ideal of what to offer. Also the agent can included an appraisal contingency to further protect you. If you are financing the property, your lender will require an appraisal, so you will know the value prior to closing. I have several Real Estate referral partners I can refer you to if you would like..
0 votes Thank Flag Link Sun Jan 3, 2010
I would suggest, if you're not represented by an agent, find one before submitting any offer. If you are represented by an agent solicit their advice. My recommendation is to submit an offer that's in line with what you are willing to pay. And then be prepared to walk away if it exceeds your limits. Good luck!
0 votes Thank Flag Link Sun Jan 3, 2010
What is your Realtor advising you to do? Have you looked at comps--recently closed similar properties in the immediate area--if so what does the information suggest--Is the property underpriced, overpriced--Keep in mind that it's up to the bank to decide--accept, reject or counter offer--are there other offers on this property, what about it's condition--remember they are sold as is--is the work needed cosmetic or extensive--the best person to give you advice is your agent--therefore, if you don't have one yet, consider using the services. Remember, not all foreclosures are great bargains, and some do sell over asking.

Anna
0 votes Thank Flag Link Sun Jan 3, 2010
Chet,

A List Price is just a "Suggested" Price... the answer to your question is that it depends on the Sold Comparables in the area over the last 3 - 4 months as to what a solid Offer is... Making an Offer on a Fannie Mae home is no different than making an Offer on a Owner Occupied Listing... if you are within their acceptable range they may Counter... if you are not then you can always resubmit a new Offer as many times as you would like... Your Offer will be a lot stronger if you use Fannie Mae's Homepath Financing.
0 votes Thank Flag Link Sun Jan 3, 2010
Chet,

IF the home is worth $175K, then no your offer is not too little. If the home is worth $225K then it probably is. List price and the market value are definitely TWO different things.

You can always re-offer!
0 votes Thank Flag Link Sun Jan 3, 2010
Joshua Jarvis, Real Estate Pro in Duluth, GA
MVP'08
Contact
Are you asking if it would be too little of an amount to offer or too little to get a counter, Chet?
0 votes Thank Flag Link Sun Jan 3, 2010
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