Market Conditions in Cudahy>Question Details

Adambrindows…, Home Buyer in Cudahy, WI

Is somone else's loss our gain or is it discrimination?

Asked by Adambrindowski, Cudahy, WI Fri Mar 30, 2012

My soon to be wife and I have recently have been looking around at houses to buy, and, of course found a great one on Milwaukee's south side. This house is technically in pre-foreclosure, or so the listing agent has indicated it so. The house was originally listed at $108,000 and has been on the market for 3 months without any accepted offers. They then lowered the price to $87900 because the couple that apparently owns the home is going through hardship and want to save whatever credit rating they have left. Its not been on the market for 6 months and I feel terrible because when we toured the home there were lots of pictures on the refrigerator displaying military photographs of what I was assuming was the homeowner. If the banks are supposedly trying to help these types of people in foreclosure then why would our offer of $87000 be rejected. Doesn't Fannie Mae and Freddie Mac have certain guidelines they have to follow as far as accepting offers on homes?

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No discrimination (at least as indicated from your question).

I'm assuming the sellers are trying a short sale. As Scott notes, the lender will look at the comps, and won't accept an offer too much below the comps. Apparently, the seller believes the house is worth more than $87,900. On the other hand, we can figure it's not worth $108,000 since it's been on the market for 3 months.

Now, the lender may be correct or incorrect in its price estimation. But that's what you're up against at the moment.

Your assumption that "the banks are supposedly trying to help these people in foreclosure" is, unfortunately, incorrect. Banks don't care whether the person who defaults on the loan is putting his/her life on the line in Afghanistan or whether the seller is a crack dealer selling to kids on the playground.

Talk it over with your agent. Have your agent talk to the listing agent for any perspective on what the bank's likely to accept. Factor all that into the equation and then, if it makes financial sense, make another offer.

Hope that helps.
0 votes Thank Flag Link Fri Mar 30, 2012
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
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The banks will only accept an offer within a certain percentage of the current market value. They will not go below that percentage. banks are willing to work with Sellers but sellers have to be willing to work the banks. using a local and well expereinced agent sure can help the process. the seller needs to reach out to the bank. As you do i feel very badly about what is happening. There does not seem to be common sense with some banks especially Freddie and Fannie in how short sales are accepted.
0 votes Thank Flag Link Fri Mar 30, 2012
The amount the bank will accept depends on the market value. They want to get the most money that they can to minimize their losses. Your agent should do a market analysis for you to see what price range this falls into.
0 votes Thank Flag Link Fri Mar 30, 2012
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