DOES FANNIE MAE AND FREDDIE MAC GUIDELINES HELP THE HOUSING MARKET?

October 25, 2010 at 9:16 am Leave a comment

By: Maria Hass

I recently put in an offer for a client on a Fannie Mae-owned home. I was told that, per Fannie and Freddie Mac guidelines, my investor would have to wait for the home to be listed 15 days on the market before investor offers could be reviewed.
No other offers came in during the waiting period. So, our offer was submitted to the lender. Fannie countered the offer by asking my client to choose between 3.5 percent closing cost assistance or 3.5 percent less in purchase price, but not both.
Fannie and Freddie representatives making the decision have not seen the house. Without that first hand knowledge, they don’t know that my client’s offer is a great offer and that asking for a full-price offer on the house may potentially raise appraisal issues down the road as the market declines.
Fannie and Freddie guidelines allow the list price to be dropped every 30 days. We are nearing that 30th day now. My client could either accept the counter, or wait until the price drops another $5,000 or $10,000. If my client decides to wait, the home will sell for less than my client’s first offer and contribute to housing values’ overall continued decline. If my client accepts the counter of Fannie Mae, we risk facing an appraisal issue. Bottom line, nothing is for certain until we get there.
In summary, Fannie and Freddie guidelines contribute to the decline in the housing market. While it prioritizes owner occupied buyers over investors, they should also consider that investors are the ones in the position to buy in a down economy. Having the investors wait many days before their offer is reviewed is allowing the home to decrease in value in a declining real estate market like Arizona.

Entry filed under: Arizona Real Estate, Chandler Real Estate, Foreclosures & Short Sales, Phoenix Real Estate, Real Estate Deals. Tags: , .

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