How flexible are Fannie Mae, gerneral REOs, and the VA on their listed prices?

Asked by Daniel, San Antonio, TX Sat Aug 6, 2011

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Ron Thomas, Agent, Fresno, CA
Mon Aug 15, 2011
The houses (REO's) are usually owned by Banks and they may different approaches to LISTING the houses.

Understand that the LISTING PRICE has one primary objective, to attract attention: It is not intended to be set in stone, and in many cases it is not even a good guideline toward the SELLING PRICE.

Some Sellers believe that by setting the LISTING PRICE high, they can always come down, and people will make an offer anyway: WRONG! Buyers will just bypass the property and look at houses that are within their price range. And six months from now, the Seller will slowly start lowering the PRICE, (this is called “chasing the curve”) and Buyers will be asking the question; “What’s wrong with that house?” and “Why has it been on the Market so long?”

Other Sellers set the LISTING PRICE low, to attract multiple offers. (The correct strategy.) We are asked; “Aren’t you obligated to sell at this price if someone offers it?” The answer is probably not; for that to happen, you would first have to have only one offer, and secondly, the offer would have be exactly the same, down to the smallest detail, (please discuss this with your Realtor).
Another thought; Buyer will search for potential properties by groups; for example, $400,000 to $450,000, and $250,000 to $300,000. If your house is priced at $460,000 or $310,000, the Buyers will never see it. (something else to discuss with your Agent.)

We have found that extremely often, the LISTING PRICE that is set on SHORTSALES and REO’s are not determined, nor even discussed with the Bank: The banks play their cards very close to the vest, they will not tell the Listing Agents any more than they have to; they will not give us their lower limits. So usually, the LISTING PRICE on a distressed property is a number taken out of the air.

If you are considering a property, have a Realtor do a CMA, (Comparative Market Analysis) to help you determine your Offering Price. If you look at enough CMA’s, you will see the trends.

You will not be privy to the though processes of the Bankers:

What you will have access to, is the Market Value of the House as determined by your CMA.
What you should be concerned about is not paying too much; you don't care what the Bank VALUES the house, but rather what YOU value the house!

Good luck and may God bless
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Michael Trau…, Agent, San Antonio, TX
Mon Aug 15, 2011
They will come off the prices usually a little, they are normally priced very marketable. If you don't mind taking a chance on a low offer you should but I have seen that most of the nice Reo's have multiple offers submitted. Michael 210-601-8034
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