Home Buying in Denver>Question Details

Kel789, Home Buyer in Milwaukee County, WI

Will fanny may be "insulted" by a low ball offer or come back with a counter offer? listed 210,000 offering 160-170?

Asked by Kel789, Milwaukee County, WI Wed Jul 13, 2011

Milwaukee has incredibly high taxes - 8900 on this house. The house has been on and off the market for a long while and is listed incorrectly on the realty websites as

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I would recommend having your agent run comps on the home and make you are within a reasonable of the list price if the home is actually worth that price. I have had clients low ball on properties like this and be instantly rejected.

I think it also depends on how much you want the home. If you really wanted the home, I would suggest structuring your offer in a way that gives you more of a chance at actually getting a counter or acceptance from the bank.

I am the first to try to negotiate however if after running comps, your offer of 160-170k is still too low, I would consider either moving on to the next home or putting in a more serious offer.

Thanks,
Brooke Hengst
REALTOR, CDPE
Your Castle Real Estate
(720) 988 5952
bhengst1@gmail.com
Web Reference: http://www.brookehengst.com
1 vote Thank Flag Link Thu Jul 14, 2011
Fannie is very busy and has a very big backlog. If you put a low offer in, they will not be insulted, but they may not respond in a timely manner. You want to make your offer look as serious as possible and going that low is not the best way to make them think you are serious.

It is hard for them to know the true value of the home at this point, but if it is on the market at $210, then will probably assume it is worth more than $170.
1 vote Thank Flag Link Thu Jul 14, 2011
kel789 -- Fannie Mae (FM) wont be insulted. An offer that low will not get passed the asset manager (AM). If an offer of $170K is made on a list price of $210K you may find the AM will just reject the offer altogether. FM will wait for the monthly price reduction to get the purchase price down to $170K before shaving $40k off the current list price or even put the property into auction. But lets say for a moment that the list price on the property was $180K and you wanted to make an offer and you are willing to pay $170K. Remembering that it is always good to have a little flexibility in the final price that you will pay for a property. By flexibility i mean if you are willing to pay $170k don't loose the house for $2K -- $172k. Any way, in my example FM is at $180 and you are willing to pay $170: Submitt your offer at $165, FM will counter back at $180k. Stick to your price and counter back at $165k. This is were you will find out how good an AM you are working with and how much they want to sell the property. The AM will more then likely come down $1k to $179k, you counter back at $165 500. Again the AM will counter back and so the process continues, kind of like a tennis match. The AM may / should ask for "buyers highest and best offer". Hopefully you haven't increased your offer so much that you have hit your $170k price point, but as and when the AM asks for highest and best always make sure you are increase your offer slightly but try to be a little below your purchase price. The AM will again counter even though you have given your highest and best. This is when you come up to your purchase price, in this case the $170K, and again stating "Buyers final and best offer. At this point you have gone back and forth 3 or 4 times with FM and the AM has come down $4k to $5k off of the $180k. Putting FM at $175k and you at $170k. The AM at this time should submit the offer directly to FM for approval, showing that he/she negotiated you up as much as possible and that he/she has squeezed you for the highest purchase price. FM will more then likely come back with $172k as a final price -- u say yes and the house is yours. Of course there are a few variables that are completely out of your control 1) an asset manager who has no interest or cant be bothered, 2) the house itself has only been on the market a short while, 3) the properties purchase price is significantly higher then what the market will support. Remember that generally you are dealing with an AM that works for an outsourcer and not FM directly. If you are looking at purchasing a home as a primary residence FM is offering 3.5% towards closing costs. Just make sure it is written into your offer. They also offer a good mortgage program called "Homepath". I hope this helps a little, remembering there are to many variables to account for, but the above explanation does come from personal experience.
1 vote Thank Flag Link Wed Jul 13, 2011
My experience with Home Path that handles the dissolution of Fannie Mae properties..... is that they have the prices pretty well at market or below. The last few I closed on went for full price or within 5% of full price.
If the property has terrible condition issues it may go for a low-ball simply because it is less desirable to a buyer.
If you really like the property and it is in great shape...I would offer a normal fair price.
They will just reject your offer it is not within a range of the recent BPO

Sandy Harrington CRS ABR E-Pro
0 votes Thank Flag Link Thu Jul 21, 2011
If a foreclosure occurs on a mortgage where Fannie Mae was the investor, the home is then put up for sale via Homepath (Homepath.com). More information is at this site: http://www.homepath.com/homebuyers/buying_fanniemaeowned.html
Also note that Homepath works with asset managers that have done their homework as well; i.e., most likely they’ve had a broker price opinion (BPO) completed on the property. With that said, Homepath is most likely offering the property at market value. You can have your real estate agent confirm if the price is reasonable and determine your best offer from the comparative market analsis(which I’d be happy to provide to you). I utilize a lender blog that provides great information on Fannie Mae properties – Here’s information I found there: “Fannie Mae offers a loan program called HomePath that does not require an appraisal. It’s for their REO (foreclosed) properties. Here are some of the highlights of the loans:

-- No appraisal required
-- Only 3% down payment
-- No mortgage insurance required
Source: http://themortgageexperts.blogspot.com/search?q=homepath (Feb. 2010)
0 votes Thank Flag Link Thu Jul 14, 2011
Hi Kel789,
I would think that anything would be of interest, if it has had all the issues you mentioned! "Low ball" is a starting point and a commmunication starter. If you have come up with the offer price based on recently sold comps in area, then you are on the right track. Mention the irregularities in the listing when you/Realtor, presents offer. It might be all you need to show sincere interest and get offer considered /countered and taken seriously.
Good luck!!
0 votes Thank Flag Link Thu Jul 14, 2011
Hi Kel - A thought to consider. Fannie Mae is a financial institution. It's all business. Fannie usually prices their homes below market to generate a fast sale. When you make a extremely low offer, you risk losing the best priced house around. I would advise my client to make a realistic and competitive offer before someone else comes along and buys the house for a price you would be willing to own it for.
0 votes Thank Flag Link Wed Jul 13, 2011
As others have said Fannie won't be insulted, others had funny comments so I'll let mine slide.

If this was a HUD home I wouldn't submit your offer, because I know it will be rejected. On a Fannie home I'm not sure, but my guess is it would be the same. Please come back and let us know what happened.
0 votes Thank Flag Link Wed Jul 13, 2011
I agree with Joan, have your agent run comps. But, if you still want to offer way below the market value in that price point, I would politely ask you "Do you want to buy a home, or do you want to learn a lesson?"
0 votes Thank Flag Link Wed Jul 13, 2011
A Realtor can run comps for the area to see if 160-170 is too low, or if the $210K price is right. Many times there are multiple offers, and usually the highest bid wins.
0 votes Thank Flag Link Wed Jul 13, 2011
Make it aggressive, but don't be unreasonable, less you lose the initiative. 170 is probably about right before becoming unreasonable, depending on the condition, location, etc.

Dave
0 votes Thank Flag Link Wed Jul 13, 2011
No she won't, let's offer what you feel it's worth and see what they come back with!
0 votes Thank Flag Link Wed Jul 13, 2011
That type of sale is not going to be insulted at all! They will counter if they don't like it, or just turn it down so that you can submit another offer. If you need help with the offer in Colorado, let me know. Phil Heep, Your Castle Real Estate
0 votes Thank Flag Link Wed Jul 13, 2011
Fanny is a big girl; she is not easily insulted.
Especially when you throw money at her.

The answer is; probably NO. Every one that I have dealt with lately, just ask us to resubmit our "Highest and Best" offer.
It would be nice if they came back with a number, and we could Accept or Reject, but that's not the way it works. They want to maintain CONTROL.

If there are multiple offers you may have to go higher or walk away from it.

The Property Taxes should be based on the LAST selling price of the Property: If it sold in 2003 for $450,000 and now it is going for $200,000, then the Taxes should be based on the new selling price. It would vary depending upon your local Assessor's Office. You'll have to check with them, or go visit your Title Company.

Good luck and may God bless
0 votes Thank Flag Link Wed Jul 13, 2011
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