Fannie Mae Homepath "Gotchas" (recommendation, negotiating, mortgage, mortgage)
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Homepath homes may be clean as a whistle, or may be a money pit. I have seen both. I have walked in, found a 3500 SF McMansion that just needs the carpet cleaned. Alternately, wife did one a couple of months ago that may well be a tear down as termites were in every wall.
Get a home inspection, preferably two. Money well spent up front. Primary issues of concern is the foundation, roof, mechanicals. The rest is cosmetics, and you can determine where you stand.
In an active REO market, you will run into a 'submit your best offer' situation, where Homepath has set a cut-off date for offers. Homepath will have an 'accepting offers until' many times. That being said, if they find your offer acceptable, they may just accept it and move on. Plan on an extended acceptance period. Just the nature of the beast. If you find a major flaw in the inspections (A/C, etc), ask for repairs or offer low figuring the cost for repairs along with a cost for your time and effort.
As above, they can go both ways. One of my favorite houses I looked at was a HomePath. They had renovated it with a new roof, paint, carpet, appliances. It was beautiful, but I think the location made them have to keep reducing the price before it got sold. But on the other hand, the house next to ours that just sold was also a HomePath, but it is in terrible shape, not even mortgage able.
I would definitely go over it closely though with inspections, even if it is renovated to see any hidden issues.
I purchased a Homepath property 2 years ago and it was perfect. Got a great deal and I couldn't be happier.
That said, I also saw alot of dumps. My best recommendation is to make sure you have a really good inspector and learn as much as you can about the property.
Any tips on how to negotiate the purchase price on them and what to expect their counters to be? Any hard numbers on what they will or will not take (such as % of listing price)? I'm not sure how they are to work with compared with a normal seller who has motivations, deadlines, etc.
In my case they knew what they wanted and there was no negotiating. That turned out good anyway as it was listed about 30,000 below what it was worth.
I have read they do reductions at certain intervals until they get an acceptable offer.
In my case it was in it's first look period and was priced according to comps, but the comps were almost half the size. I have noticed that Homepath will mess up on the list price because of mistakes like that which work out great for the buyer.
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