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Old 06-02-2013, 07:22 PM
 
Location: NE Fresno
12 posts, read 26,954 times
Reputation: 15

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We made offer on a Freddie Mac owned REO. They accepted and appraisal came in 21k lower than what we agreed upon. Does anyone know if Freddie Mac will lower the price to match appraised value? I'm thinking 21k out of pocket for this house is way way too much and will walk away from deal. We are just waiting for seller's response

Thanks in advanced
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Old 06-02-2013, 07:32 PM
 
Location: OK
2,825 posts, read 7,528,391 times
Reputation: 2056
What did you base your offer on?
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Old 06-02-2013, 08:44 PM
 
Location: NE Fresno
12 posts, read 26,954 times
Reputation: 15
My realtor's CMA
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Old 06-02-2013, 09:34 PM
 
1,250 posts, read 4,774,167 times
Reputation: 821
I'm actually in the process of purchasing a Freddie Mac REO right now.

Here is my understanding of the situation (and please, consider that I'm not a real estate professional. This is simply what I know based on my research and from speaking with my agent and her associates who have all dealt with Freddie REO's before):

Freddie Mac rarely lowers the price of a house once it is in contract. That's not to say you can't get the house at a lower price. What my agent told me (and was told to her by the FM listing agent) is that in that type of situation, the buyer would typically have to cancel the contract (essentially "walk away") and re-submit the offer at the new offer price (this time you would want to submit the appraisal as justification for the lower offer price).

This is, of course, a bit risky. If you cancel the contract, the Freddie Mac asset manager could accept another offer (and may possibly already have backup offers on the table).

My situation is a little different than yours. In my situation, some of the repair work is more extensive than originally thought (hidden damage) and we're trying to decide whether to push our luck and ask for a repair credit, re-submit an offer or just eat the extra costs.

Your situation (the lower appraisal) probably gives you a little more leverage and so should be to your advantage. My Freddie Mac contract says it's contingent on getting financing and a lower appraisal would prevent that. If your contract has a similar contingency, you could probably use that to your advantage.

Again, this is just my understanding of how this typically works based on the experiences shared by my buyer's agent, her associates and the listing agent working on behalf of Freddie Mac. All FM Asset Managers don't act the same and practices could vary to some degree from one to the next.
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Old 06-02-2013, 10:45 PM
 
Location: NE Fresno
12 posts, read 26,954 times
Reputation: 15
Good luck on yours 540, thanks for your input and info. It's been a long weekend as we're waiting on seller's response, but I'll just take the "pain" and slight loss of $$$ (for appraisal and home inspection) and walk away if they do not reduce price. Maybe it's just not meant to be and our real home is waiting elsewhere!
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Old 06-07-2013, 09:18 PM
 
Location: NE Fresno
12 posts, read 26,954 times
Reputation: 15
Update: Great News!! we just heard from our Realtor, Freddie Mac is going to reduce the price to match appraised value!! What a roller coaster ride this was !!!!
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Old 06-08-2013, 03:48 PM
 
Location: IE, ca
264 posts, read 615,349 times
Reputation: 486
Quote:
Originally Posted by family_g View Post
Update: Great News!! we just heard from our Realtor, Freddie Mac is going to reduce the price to match appraised value!! What a roller coaster ride this was !!!!

Congrats!
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Old 06-09-2013, 09:08 AM
 
Location: NE Fresno
12 posts, read 26,954 times
Reputation: 15
Thanks!!
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