The home was previously on the market for over a year, did not sell, went through foreclose, and is now owned by Federal Home Loan Mortgage Corportion. Not sure why it didn't sell with the original owners, other than they owed more than it was worth. Not sure how Federal Home came about owning it? Anyhow, wondering how they determine selling price - what was owed on it?
Got info from friend, trying to understand/educate to determine if want to purchase it.
Generally, you won't be able to get much of a deal, in the sense that the price you pay won't be significantly discounted against the current market price. Freddie Mac just uses their own valuation software to look at neighborhood comparables to determine their asking price. Of course, valuation software, like most appraisers, are far from perfect. So, there may be times when Freddie Mac misprices its homes. But, in general, expect to pay close to the market price. Otherwise, Freddie Mac will just wait until they get an offer. They're unemotional in that way.
Oh, Freddie Mac does NOT offer HomePath properties, as Suzanne had mentioned. Instead, it offers FirstLook properties which allow homeowners to buy before investors. Typically, FirstLook homes go for less than HomePath, which offers easier financing terms.
Getting a "Deal"
A "Deal" in real estate is a relative term. Right now there are homes in my area that cost less than the empty lots. The reason is the "deal" homes are so bad, you have to pay to remove them before you can build a new house.
Foreclosed homes are best left to experienced investors or at the very least you should be a contractor. Federal Home Loan Mortgage Corp Homes listed on HomeSteps aren't the same as "foreclosures" in that sense.
Keeping in mind that the government, just like the banks, is trying to protect as much of it's money as possible FHLMC homes are fixed up to sell. The homes are generally refurbished to an FHA living standard. The banks don't always do this. In this respect buying an FHLMC home can be a better "deal" because you know it is safe to live in and everything works.
An FHLMC home also has a two year warranty, which most foreclosures do not.
A good buyers agent can help you determine if an FHLMC or Freddie Mac home will work for you. You might find a better "deal" working with an agent that really knows the area. Freddie Mac will price the homes close to the local market prices and they have their own appraisers and contractors to clean up the homes.
I never encourage buyers to low ball REO properties. It never works.
These homepath properties also come with great programs for closing, warranty, etc. That factors in there.