Home Buying in 62221>Question Details

M, Home Buyer in 62221

What kind of deal can you get on a home forsale that is REO by Federal Home Loan Mortgage Corporation? What is the Federal home loan Mortgage Corp?

Asked by M, 62221 Thu Mar 8, 2012

How do they determine there asking price?

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Freddie Mac owned properties are those which are owned by the Federal Home Loan Mortgage Corporation (FMLMC). When a homeowner becomes delinquent in their monthly mortgage payments, they are at risk of foreclosure. This causes Freddie Mac to repossess the home as they are the loan servicer of the property. http://ForeclosureIQ.com
0 votes Thank Flag Link Sat Aug 22, 2015
If the home was on the market before and didn't sell and it was going through foreclosure it was a short sale and many short sales never sell and end up being foreclosed on. They usually don't sell because there is more than one lien on the property or something like that. If the current owners can't sell their home before it goes to auction and no one buys it at the auction then the bank that was foreclosing becomes the legal owner. If Freddie Mac purchased the original loan as an investment from the bank that was used to buy the house that was being foreclosed on then they are now the legal owners so they will list the home for sale usually with a local real estate agent.
0 votes Thank Flag Link Thu Mar 8, 2012
Hi M. Freddie gets input from local Realtors in the form of broker price opinions. They are basically a comparative market analysis. When I do one I take into account that this home is being sold under duress and price it appropriately. You can get a good deal price wise. You need a savvy Realtor to advise price to start negotiation what loan vehicle would be best to purchase this home and also consider that if there is a lot of deferred maintenance and you your self will not be doing the work on the cheap with cash, you may be money ahead to purchase a home that needs less work with money financed at 3.35 or 4 than any other loan - like credit cards. Each property needs to be individually assessed. You are looking in my neighborhood if you want to preview it let me know. Always appreciate the business!
0 votes Thank Flag Link Thu Mar 8, 2012
More Info -- thanks for input thus far:

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.
0 votes Thank Flag Link Thu Mar 8, 2012
The Federal home loan Mortgage Corp is more commonly referred to as Freddie Mac, one of three government sponsored (now government owned) entities created with the goal of increasing homeownership in the US.

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.
Web Reference: http://www.archershomes.com
0 votes Thank Flag Link Thu Mar 8, 2012
The Federal Home Loan Mortgage Corp is also known as the FHLMC or Freddie Mac. Freddie Mac is a government sponsored company that buys loans from banks and pools them together as collateral. That collateral is used to sell mortgage backed securities to investors like insurance companies, retirement funds and hedge funds on the open market.

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.
0 votes Thank Flag Link Thu Mar 8, 2012
It is all based on the home, area, market time and the comparables in the area. You need to see what has sold comparably and base your price accordingly. They will negotiate, but usually not a whole lot. With some exceptions, there homes are usually priced to move. There is no formula, you need to have your agent or you need to do the homework on the area market. Also, offer based on how much you want it.
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.
0 votes Thank Flag Link Thu Mar 8, 2012
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