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how to negotiate price on a foreclosure held by fannie may??

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September 13 2011 - Boynton Beach
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I see no one has brought up timing yet.  Fannie Mae and the others basically conduct a "Dutch Auction" on their REO properties.  They lower the price every 30 days until someone makes a serious offer.  As already noted, may properties attract mulitple offers in the first few days and in that case you should expect to pay list or more.  The key to finding the best deals id to look for the ones that have gone past 90 days on the market.  That's when Fannie and the rest will seriously consider low ball offers to get the property off their books.  An REO that lasts 90 days will have some serious issues to the sure.
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September 16 2011
It depends on the market condition. In Vegas, we are in a multiple offers market. Half of Vegas' 22,000 listings have experienced multiple offers, many of these are Fannie. In this type of market, Fannie will accept only the highest and best offer. Before, Fannie would take a cash offer at less than the asking price. Now, there's a trend of accepting 3% down buyers (financed by Fannie) whose offers are higher than cash buyers.

If the market was the opposite in different parts of the country, meaning that there are much less buyers, then you can submit a reasonably lower offer.
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September 16 2011
I would like to only add that when multiple offers are submitted, all potential buyers will be asked for their highest and best offer. In my recent experience, even though my clients offered cash, Fannie Mae accepted higher offer with FHA financing. Good luck!
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September 14 2011
Craig's answer is spot on and I couldn't have said it better myself. He just gave you some really good advice. Good luck with your search.

Nathan
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September 13 2011

Jim,
I typically see multiple offers on Fannie Mae properties, which could make negotiating difficult if you are a financed buyer, or even worse, a FHA financed buyer.  Almost all REO sellers are looking for cash buyers. 

Fannie requires properties to be on the market for 13 days before accepting offers from Investors, so that could allow you enough time to negotiate a deal.

Remember, they know the value, so it's unlikely they will negotiate much below list price if the property is livable and in pretty clean condition.

If the property requires substantial renovations or repairs, it may already be factored into the price, if not, you definitely have some amunition for a lower price.

Your motivation to purchase that particular property should also be taken into consideration.  If the home is in a great location, perfect for your family, and offers things that other homes may not, then the value to you may be higher than it would to someone else.

Negotiate like you would any other purchase.  If you don't feel the value is there and your offer is not accepted, move on.

Good luck, your agent should be guiding you.  If you have any questions, feel free to contact me.

Craig Fialkowski GRI,CDPE
Realty Elite - Boynton Beach

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September 13 2011
Make an offer on their listing.

They rarely flat out refuse an offer. They will more likely counter offer if your offer isn't acceptable to their standards.

If you're so far apart in price, you can always wait for price drops - assuming they don't first sell to another buyer.
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September 13 2011
 
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