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Old 08-03-2010, 08:08 PM
 
228 posts, read 728,299 times
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Why would a bank (seller) want to know whether an offer to purchase is from an investor or someone wanting the REO for a primary residence?

Last edited by Trump; 08-03-2010 at 08:57 PM..
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Old 08-03-2010, 09:08 PM
 
Location: Tempe, Arizona
4,511 posts, read 11,882,047 times
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Quote:
Originally Posted by Trump View Post
Why would a bank (seller) want to know whether an offer to purchase is from an investor or someone wanting the REO for a primary residence?
Some lenders, such as Fannie Mae, have policies requiring that during a certain time frame (e.g, 1st 15 days) they will only sell to buyers intending to occupy. Investors can submit offers after that time expires. Fannie Mae calls this their "First Look" program. They are doing this to give owner occupants a chance to compete against investors who have tended to dominate in buying REO properties. Owner occupied homes are viewed as more stabilizing to a market vs investor owned properties.

http://www.fanniemae.com/homepath/incentive/index.jhtml (broken link)
Quote:
Fannie Mae's First Look is designed to provide neighborhood stabilizing entities—owner occupants, public entities, non-profits and similar organizations—a “first look” at Fannie Mae homes. Under this policy, Fannie Mae will only consider offers from owner occupants and buyers using public funds during the First Look marketing period, typically the first 15 days a property is listed on HomePath.com. If the property is still for sale after the First Look Marketing period expires, investor offers may be submitted and will be considered.Properties in the First Look marketing period will have a timer with the number of days remaining on the property details page
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Old 08-03-2010, 10:32 PM
 
Location: Chciago
721 posts, read 2,654,854 times
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Another reason is you have more a vested interst in a property if you live there. If you ahve a primary residence and are having a tough time paying for the rental and you let the rental go into foreclosure you still got a place to live. If its your primary residence your potentially out on the street if it goes into foreclosure so you have more of an interest in keeping the house.
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Old 08-15-2010, 06:59 PM
 
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How long must you keep the property as your primary residence? Say for a Fannie Mae REO. I frequently move for my job, but buy the home and then rent it out. I'm considering buying a Fannie Mae Homepath home as a primary residence, but expect not to be there very long.
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Old 08-15-2010, 07:03 PM
 
Location: Valparaiso, IN
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Just did one of these 12 months and even though there were 3 offers on the property the fannie took the owner occupied. My buyers were required to sign a affidavit stating home would be owner occupied for 12 months or they would have to pay 5000.00 damage fee.
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Old 08-16-2010, 05:39 AM
 
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Thanks. Is the damage fee negotiable and how is it verified?
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Old 09-02-2010, 12:53 PM
 
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I am a realtor, and have an investor client. We have submitted many offers for REO's and it isn't uncommon for us to get outbid on several before we are accepted on one. However, the most ridiculous one yet was a townhouse that was listed at $69,000, and they said they would only look at owner occupant offers for the first seven days, and investor offers after that. BUT, because the home was damaged, it was a cash only sale. We offered $87,000 cash, no contingencies, and did not get the house. I later saw that it closed for $75,000 cash. Now, explain that one to me!!
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