Fannie Mae- Homepath House. Multiple Offers Round take 2?

Asked by Anxious buyer, Oceanside, CA Tue Sep 25, 2012

We recently put an all cash offer on a FM REO property in Oceanside. We will be the occupants for quite awhile. We wanted to make the transaction as easy as possible. We asked for no % back on closing costs, %4 earnest money down and were flexible on the closing dates. We got a response on the 1st offer that a "Multiple Offer Rounds" had started and we had 72hours to respond. We raised our offer the same day. The day following the deadline we got another response of "Multiple Offer Rounds" and we now have 24 hours to respond. We kept our same offer. I haven't read very many instances where they will initiate multiple offer rounds over and over again. Does anyone have any insight with this? After doing calculations we offered 88% of the list price, all cash. There is about 10k in renovations that need to be done. It just seems they are dragging it out to the very last day of the "First Look" period yet also keeping our offer valid (we said that it would expire after 3 days).

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8
Tony Cannon, Agent, Carlsbad, CA
Tue Sep 25, 2012
I have seen multiple highest and best rounds a few times, but one round is more common. The policy with my buyers is to offer your highest and best the first time. For most banks, highest and best means the highest net amount, with the strongest financing or cash, least amount of contingencies, and "easiest" perceived buyer. A good agent will have many tricks up his sleeve to try and get you the property in the competitive market we face today.

At least you are getting a highest and best response. A few years ago, if a bank didn't like your offer, they just ignored you.

My buyers will structure the offer differently depending on whether they really want the house or are just offering what the house is worth to them. There are a lot of factors which determine the content of the offer in each and every case.

What would help agents and buyers survive the market better is more communication from the sellers and their agents when there are multiple offers and yours is not the chosen one. It would be great to know what to do differently the next time. A quick response that your offer was not chosen because of: price, financing, down payment, deposit, contingency period, seller costs or something else and how many total offers there were would not take much effort and would be beneficial to know.
1 vote
Janice Nhare, Agent, Dublin, GA
Sun Jan 4, 2015
What do you do when The Seller has countered on a offer and is the Neg stage and another offer cones in, Don't you have to wait and let the first buyer have a chance to accept the sellers offer before you go to multiple offers
0 votes
Freddie Mac has no such policy

(I am a former Freddie Mac listing broker)
Flag Sun Jan 4, 2015
Julia C Dugg…, Other Pro, Washington, DC
Thu Sep 27, 2012
Several multiple offer rounds are not unusual for HomePath properties -- a new one will kick off every time a new bidder places a new offer during the round. It's Fannie Mae's method of ensuring that all offers are equally and considered and that they are able to accept the highest and best offer on a property.
0 votes
Maria Gilda…, Agent, Manchester, CT
Wed Sep 26, 2012
You have good insights from the responses. In addition to this, discuss with your agent how to leverage the best offer if you are outright serious about the property.
0 votes
John Linthur…, Agent, Carlsbad, CA
Tue Sep 25, 2012
In the last several years banks (asset managers) have become the primary respondents on the majority of homes to come on the market. Unlike the culture of house selling in a previous era, these banks are not ‘time chronic’ and see little need to accept an offer in hand - when another two can be beaten from the bush. As a buyer in your circumstance you have little knowledge as to what the other offers are, if indeed they are even credible, or if you are bidding against only yourself in’ highest and best’ responses you have been getting. Indeed you have justification for feeling soured on the effort. But then again you also did not offer full price. Perhaps if you had, you wouldn’t be having this frustration.

John Linthurst.
Jacques Real Estate
Oceanside, ca
760 297 0771
0 votes
Properties that have sold in that area, starting in April, are about 28K less than what they are asking for with this particular property. Our agent and I can't understand why they have it priced so high. Based on the comps and the needed work, it seems it would be very unlikely that if they had a financed buyer it would appraise for the amount they are asking for. (unless they go through Fannie Mae (because of 'no-appraisal needed' or a Renovation loan, I know) We want the property, but we are not going to buy a house that would automatically put us upside down. Thanks for your answer!
Flag Tue Sep 25, 2012
Chris Galleg…, , Fallbrook, CA
Tue Sep 25, 2012
If you are really serious about this house, there are a few things you can do to make your offer look more appealing to the bank. First, shorten your contingency period. Second, don't ask for any services like termite or septic( if it applies). Offer to pay any transfer fees and possibly pay your realtor's commission outside of escrow. I wouldn't normally advise this to any of my clients, but these are some of the tactics used to get these sought after REOs.
0 votes
Steven Torres, Agent, Carlsbad, CA
Tue Sep 25, 2012
You are facing what many buyers are facing whether being a "Cash" buyer or someone taking out financing is that everyone is competing with other buyers and it's winner to the highest bidder. In the case if the house needs $10K in renovation cost or not is what all other buyers are seeing too. It's that your offer is 12% less than the list price and because of limited inventory, even on properties like this that are distressed and needs work, home are selling at or above list price.

If you would like to discuss in more detail, I would be happy to talk to you.

Steven Torres
Area Sales Manager
REALTOR®, CDPE, C-REPS, SFR

Elite REO Services/Elite Premier Properties
2171 S. El Camino Real #209C
Oceanside, CA 92054
Cell: (760) 586-0854
Fax: (619) 819-4306
Email: steve.torres@elitereo.com
Website: http://www.your-sandiego.com
0 votes
Scott Godzyk, Agent, Manchester, NH
Tue Sep 25, 2012
They can ask for highest and best each time a new offer comes in if they want. It is common for them to more than 1. It is a very difficult process sometimes when it doesnt need to be. As far as what you offered, it depends what the house is worth, never base an offer on a percenatge of asking price. If they keep asking for highest and best, the offer may not be high enough. Your buyer agent should be guidking you throuh the process.
0 votes
Scott,

We didn't base it on the percentage of list price, that is just what it happened to come out to. Properties that have sold in that area, starting in April, are about 28K less than what they are asking for with this particular property. Our agent and I can't understand why they have it priced so high. Based on the comps and the needed work, it seems it would be very unlikely that if they had a financed buyer it would appraise for the amount they are asking for. (unless they go through Fannie Mae or a Renovation loan, I know) It's just a waiting game I suppose.
Flag Tue Sep 25, 2012
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