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Old 10-01-2012, 05:00 PM
 
17 posts, read 51,869 times
Reputation: 14

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We really like a Freddie Mac house that just went on the market. It went up for 325K, which in a normal circumstance is very legitimate for a price in the very nice neighborhood it's in. However, the house is missing the ac, water heater, fans, pool pump, carpet, electric box, some floor tile, stove, all the toilets, master bath, dishwasher and the list goes on. There is no way this house will ever go for that amount. Plus, the cabinets in the kitchen and bath are in poor shape.

We made a CASH offer for 240K, because of all the work that needs to be done. We plan to live in that house, it's not an investment to flip. (Our real estate agent did the comps on this house and actually thought we were offering too much).

Freddie Mac came back with a counter offer of 324K. So, only 1K off the price. There is no way anyone will be able to get a loan for that house and no investor in their right mind would pay more than 240K.

We thought about countering the offer with 250K, but really don't want to go above that price (plus I don't think they will take it right now). We realize there are a lot of other houses in much better shape for that price, but we really like that neighborhood, it's near our church and our kids could walk to school.

Any advice on how to deal with Freddie Mac? Are we pretty much fighting an uphill battle? I'll take any ideas because we really like this house. Has anyone had a similar experience and come out winners?

Thanks!
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Old 10-01-2012, 05:11 PM
 
Location: Salem, OR
14,203 posts, read 33,578,406 times
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You have to wait. Freddie Mac has a formula they use and if you don't fit in it with your offer, you are wasting your time. You just have to wait out their price drops. Out here they tend to drop the price $10k every 30 days.
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Old 10-01-2012, 08:17 PM
 
17 posts, read 51,869 times
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Thanks for the advice. It's such a frustrating experience. Good to know that information though...
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Old 10-02-2012, 08:54 AM
 
17 posts, read 51,869 times
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The agent on the Freddie Mac house said there is a mortgage insurance company involved in this. Will that slow things down even more? How do they factor in to all of this? And, is this typical in foreclosures?
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Old 10-02-2012, 01:12 PM
 
1,013 posts, read 1,306,719 times
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I would imagine Freddie mac isn't going to come down too much because basically the insurance company is the one that ultimately has the say so. Freddie mac has a fiduciary duty to try and recover as much of their and the insurance companies losses as they can. The fact that the house is overpriced isn't going to sway them too much they already came back with a counter offer that only went down $1000. They will sit on this house and keep in on the book at the original mortgage value for as long as possible
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Old 10-03-2012, 08:16 AM
 
Location: Lakewood Ranch, FL
5,435 posts, read 8,446,673 times
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I've noticed for a while now that, in my area, Freddie and Fannie prices have not been what one typically expects to see in a "REO". The homes are generally in decent shape and they are holding the line on price, sometimes at a point where they are above the low end of the market value. I hate to say it but I think the days of "steals" are over.
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Old 10-03-2012, 08:35 AM
 
Location: Lake Mary, Florida
793 posts, read 2,245,145 times
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I'll give you the 'days of steals are over' and throw in a 'possible sellers market in some areas'.

Orlando is starting to show multiple months of price gains.

Check out Market Statistics for August video on youtube.

Hope this helps,
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Old 10-03-2012, 09:41 AM
 
17 posts, read 51,869 times
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Thanks for all the advice! We'll let it sit for a while and see what happens. I'll keep you all posted. Thanks for the link Broker Dave, I will check it out. Always good to stay informed.
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Old 12-31-2012, 12:14 PM
 
17 posts, read 51,869 times
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Default House sold

Well, I wish I had better news, but the house sold to someone else. It sold for about 7K more than we offered. We offered 248K. Oh well, wasn't meant to be.
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Old 12-31-2012, 12:25 PM
 
3,313 posts, read 4,405,424 times
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Tallmomof2,
Whatever happens has a reason.. Maybe it for good! I hope you will find something you like soon! Good luck!
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