What is Fannie Mae's REO policy on making an offer? Is the listing broker supposed to tell you if there is another bidder/what their offer is?

Asked by Melanie Scalera, Cranston, RI Sun Sep 25, 2011

The listing agent says to "submit highest and best" offer on all of the properties and even has that listed on the properties. Is this ethical? Is Fannie Mae's policy to conduct this "blind bidding", or are you supposed to know what is going on?

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8
Laura Feghali, Agent, Stamford, CT
Sun Sep 25, 2011
Hello Melanie,
I can understand your feeling more deserving of the property since you've been pursuing it for awhile.

Yes, according to the Code of Ethics and Standards of Practice for REALTORS®, a listing agent must disclose if there are other offers on the listing if someone inquires about it.

I suggest that if you truly wish to purchase the home; that you offer the highest amount you feel comfortable paying.
Discuss with a local experienced agent or perform the research yourself on recent comparable homes sales in the neighborhood to determine what the property is worth in the current market. This way you'll have a better understanding on what you should offer.

Best of luck to you!

Laura Feghali
Prudential Connecticut Realty
1 vote
Ed Beck, Agent, Boonton, NJ
Mon Sep 26, 2011
Yes Fannie would rather sell to an owner occupant, and they get dibs for the first 14 days. FYI - the banks are aware of the required repairs and usually factor that into the list price. Banks are getting close to, if not more than list price in most cases (some just price too high and reduce every couple of weeks). The key to purchasing 'hot' REO properties is to come quick, and come high, using cash and with no contingencies.
0 votes
Laura Feghali, Agent, Stamford, CT
Mon Sep 26, 2011
Hi Melanie,
Sorry to hear that the property is already under contract. All you can do now is possibly submit another offer with the highest amount you are willing to pay as "back up" in case the current buyer defaults.

Best wishes to you!

Laura Feghali
Prudential Connecticut Realty
0 votes
Melanie Scal…, Home Owner, Cranston, RI
Mon Sep 26, 2011
Thanks Laura,
I wish I would've known that during the process. Basically, they accepted someone else's offer, and the property is under contract. So, I'm assuming it is too late to do anything now?
Also, to everyone; investors were not allowed to have an offer accepted on the property during Fannie's first look period. I am also extremely familiar with the area, and I know what similar houses are worth. Based on the work it needed, I offered the amount minus what work it would needed from what myself and my realtor could see. I wanted the house so bad, that if I knew someone else was making an offer, I probably would have been willing to pay the full amount.
0 votes
Ed Beck, Agent, Boonton, NJ
Mon Sep 26, 2011
It is very common for there to be multiple offers on a bank owned property because the bank's usually price them to sell immediately. It is also very common for the bank and Fannie Mae in particular to request highest and best offer from all parties. The reason you were not able to purchase it before it hit the market is because it wasn't yet for sale. The bank isn't going to put it on the market until they know what it's market value is. So they've done their BPO's and appraisals and then finally put it on the market. Perhaps you weren't the only with your eye on the property. Maybe an investor's agent called them as soon as it hit the mls and said, 'you should check this out'. Bottom line is, once it hits the mls, it is available to thousands of agents and consumers alike. It's the money that talks, not your desire alone. The only way are going to get this property is if you put your best foot forward and come in with a superior offer to the others, in price AND terms. You cannot know what the other offers are, just as you wouldn't want the other parties to know your offer.
0 votes
Melanie Scal…, Home Owner, Cranston, RI
Sun Sep 25, 2011
I believe mine was the first offer. I also was following the home for months, contacting everywhere trying to buy it before it came on the market. So, putting anyone in my shoes, I believe it is harsh to see someone else get this home. Thought just a gut feeling; I feel as though something shady went on, as if the listing agent gave info about my bid to the other party, or made sure a friend or someone working through only them got the property. Again, this is just a guy feeling; I am not 100% sure. However, there are numerous complaint of this brokerage being unethical and their bidding practices are rigged.
I appreciate all answers, but I just need to know if you are not supposed to be told whether or not there are other parties putting in offers or not. Thanks very much.
0 votes
Anna M Brocco, Agent, Williston Park, NY
Sun Sep 25, 2011
In order to determine a fair offer, no matter the owner of the property, review comps with your agent, recently sold similar properties in the immediate area, see what the data suggests and go from there--thus no blind bidding; keep in mind offer amounts can't be disclosed, therefore if your interest in the property is high, do submit your highest and best, within your personal means...
0 votes
Ron Thomas, Agent, Fresno, CA
Sun Sep 25, 2011
Reverse the situation for a minute:

You have made the First offer on an REO, and then four more offers are made:
You and your Agent MUST disclose what your offer was.
How do you feel about that? Is that fair?

Good luck and may God bless
0 votes
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