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We are interested in a property that is a Freddie Mac REO. They recently dropped the price to 175k, the interest in this property has quickly peaked. We have made an offer below their asking price and have been told that two other people have also made offers. We are now told that we have until Tuesday at 5:00 pm to make a best and final offer. I guess all three of us have this option.
Does this mean that no one offered the 175k?
My question is can this go over the 175k they were asking? Does it depend on the terms of the offer?
I invest in real estate and know what the problems are, I don't need an inspection to point these out, I guess everyone else that has made an offer on this house has dropped out after the inspection.
I have written a plead letter telling them that we don't require an inspection so we will not back out, that it will be our primary residence etc.
If I offer the 175k is it possible that I might get it or do I need to go higher?
Thanks in advance for any help you can offer. Mel
We are interested in a property that is a Freddie Mac REO. They recently dropped the price to 175k, the interest in this property has quickly peaked. We have made an offer below their asking price and have been told that two other people have also made offers. We are now told that we have until Tuesday at 5:00 pm to make a best and final offer. I guess all three of us have this option.
Does this mean that no one offered the 175k?
This is a typical REO situation - the property garners multiple offers and the bank sends everyone back to the drawing board for highest and best. There absolutely could be a full price offer on the table already.
My question is can this go over the 175k they were asking? Does it depend on the terms of the offer?
Of course. Many REOs go well & above list price because they've priced it below market. And cash is always king - a cash deal may very well beat out a higher priced offer that depends on financing.
I invest in real estate and know what the problems are, I don't need an inspection to point these out, I guess everyone else that has made an offer on this house has dropped out after the inspection.
I have written a plead letter telling them that we don't require an inspection so we will not back out, that it will be our primary residence etc.
Don't waste your time on the letter. #1, they probably will never see it and #2, this is a business deal to them - not an emotional one.
If I offer the 175k is it possible that I might get it or do I need to go higher?
Yes - to both questions. But seek the advice of an experienced agent in your area ... I, and most posters here, have no idea of the exact particulars of this property and your area.
Thanks for your quick response. I don't know about Freddie Mac, but when I was running a loan processing department 25 years ago, I was able to put through many loans with plead letters that otherwise would not have made it through. My agent said many people drop out when it becomes a bid situation. I figured it they had gotten their asking price of 175k they would not have put it to bid, just a thought. THX Mel
Thanks for your quick response. I don't know about Freddie Mac, but when I was running a loan processing department 25 years ago, I was able to put through many loans with plead letters that otherwise would not have made it through. My agent said many people drop out when it becomes a bid situation. I figured it they had gotten their asking price of 175k they would not have put it to bid, just a thought. THX Mel
That was 25 years ago. Freddie Mac has a computerized offer system. They won't see your plead letter. It is Freddie's policy to ask for highest and best regardless of whether or not they have a full price or over full price offer. They automatically go to bid. It's their policy.
So a cash offer with no home inspection is a strong offer, but I can also tell you that Freddie is messed up. Just closed an REO transaction with them (10/30) and the listing agent and I were both stymied by them. I'd be happy to never write up another offer on one of their properties. It took a week to get a response from them on the offer.
I can also tell you that this year every cash offer my investors wrote was less than asking and less than the other offers and my investors got the houses. Cash with no inspections is very appealing to banks these days. Even below asking that is a strong offer. I can also say that in one situation where we offered less than asking, the bank countered our much lower offer and said if we came up $2,000 it was my buyers. Closed it two weeks later.
Normally I'd tell you that you have a really good shot, but Freddie Mac is very difficult to work with, in my experience. I agree with Chuckity that you need to get advise of a local agent. Freddie has regional centers so yours may not be a pain like ours is out here.
All great advice above. Also, have you checked comps to get an idea of fair value for the home? How does $175K compare? If lower, then you may be worth offering higher than $175K, particularly given the competition.
Agree with most. If you invest in R/E then you've done your comp work. Is it worth $175k? Is it worth $180k? This depends on how bad you want the property. Don't mess around, don't make emotional/irrational decisions. This is business. Take care of it.
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
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Quote:
Originally Posted by Silverfall
That was 25 years ago.....
... but I can also tell you that Freddie is messed up......and the listing agent and I were both stymied by them. I'd be happy to never write up another offer on one of their properties. It took a week to get a response from them on the offer.
Normally I'd tell you that you have a really good shot, but Freddie Mac is very difficult to work with, in my experience.
AMEN SISTER!
In any multiple offer situation you are likely to be asked for your highest and best offer, and not just with Freddie.
The house is 5400 square feet and as my sister said "has very good bones" It was a very nice home, well built, hardwoods throughout on 3 acres, no HOA. I believe I should be able to pull at least 350k out of it in 5 years.
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