Homepath Question on House Already in Negotiation
Hi All,
I'm still in the hunt for my first B&H property and have my eye on a homepath SFR in an up and coming area in Kingston, NY.
I finally got in touch with the Realtor and she let me know, by e-mail, that there is already an offer on the property and is being negotiated.
My question is, and the answer may be obvious, but is there a chance that I can still get an offer in and what is everyone's experience in this situation? Will Fannie negotiate with two (or more) prospective buyers? The property is not under contract, so I'm hopeful that I still have a shot but will not go above the price that works for my numbers.
The property is cheap enough so my plan is to do a cash deal and then re-fi out once I rehab and the title seasons.
My #'s have it cash-flowing at 265/mo. (2bd 1ba - could potentially be a 3bd which would be a huge win).
Thanks in advance!
Time is of the essence. If you want it act. Least you find out is no. They sometimes sit on these a bit so you may have a chance.
Good Luck
Hi @Frank Gucciardo,
Once negotiations are underway they will not entertain any other offers. Having said that, one thing you can do is contact the Listing Agent. (if you are working with a Realtor have them do it) suggest strongly that you'd like to submit a back up offer. If they agree, immediately write as strong of an offer as you can keeping it clean and simple (don't ask for items like; Title Policy etc. If you want anything paid for like that, reflect it in your offer price). Have the Listing agent notify the Bank that a Back up Offer is forthcoming. Include a brief cover letter w your back up offer that states that this is an, "all cash deal, can close quickly, respectfully yours, etc."
Another Ray of Hope: A majority of the time, "HomePath's " go to owner occupieds. There are a lot of strict rules for obtaining financing for an HP Owner Occ. so many times the deal will fall thru. Hopefully you'll be there to catch it if it does.
I don't believe in luck but, here's hoping good things for you!
Take care,
Jennifer (Jenn) Ryan
Thank you for the speedy responses @Jennifer Ryan and @Jay C. .
I'm talking to the Listing Agent at 2:30 this afternoon and will hopefully get some more info.
I have not see the inside of this place (aside from the listing photos), would you suggest that I make my backup offer over the phone contingent on passing inspection or should I ask to see it before I make an offer? I assume if I ask to see it she's not going to want to spend the time since there's already an offer.
Frank you need to look every prop over before you buy it inside and out when possible. Thats the beauty of the Fannie Freddie REO homes. Its not an auction home you cannot get inside. Certainly get a look inside and do your inspection which for me is a crawl underneath and the whole deal. If you still want it make your offer.
Good deals come often. Dont sidestep good practices and get in a hurry. It just hurts you in the end. Good Luck
Spoke with the agent. No accepted offer yet and the buyer (owner occ) is dragging their feet on responding to Fannie's counter-offer. I am going to go look at it next early next week (along with a couple of duplexes in the area) with the agent and make a backup offer if it looks worthwhile.
Thanks again everyone. I'll keep you posted.
I respectively dis agree with @Jennifer Ryan statement that they will not entertain other offers during negotiations. I have negotiated on at least 20 FNMA properties in the past couple of years. Just when I think we are coming to terms, I get the "highest and best offer" request because of other offers. I haven't been successful in buying one.
Don
Originally posted by @Don Hines:
I respectively dis agree with @Jennifer Ryan statement that they will not entertain other offers during negotiations. I have negotiated on at least 20 FNMA properties in the past couple of years. Just when I think we are coming to terms, I get the "highest and best offer" request because of other offers. I haven't been successful in buying one.
Don
Don, the agent told me she couldn't submit another offer but would hold mine as a backup in case the current deal falls through.
That is true if the property is already under contract. But, they will mess with your head during negotiations.
Don
Fannie Mae offers can be submitted online so may be it is not that the agent can't submit another offer but just not wanting to waste time doing so.
Does Fannie Mae even execute backup contracts? The listing holding your backup offer is different from an executed backup contract with the seller. Submitting a backup offer for the agent to "hold on to" seems to me would only give leverage to the agent against the current buyer.
Fannie Mae properties fall out of contract all the time, so it's possible it will come back. But if it's "under negotiation", that means it's too late to get them to go highest and best.
Originally posted by @Andrew Syrios:
Fannie Mae properties fall out of contract all the time, so it's possible it will come back. But if it's "under negotiation", that means it's too late to get them to go highest and best.
From everything I've read that's exactly the case. Fannie and the prospective buyer have traded offers several times. It would be bad faith to accept a second buyer in the middle of that process.
Still going to see it on Saturday along with a property that looks to cash-flow better anyway.
ok, I finally got to look at the SFH and it was a complete mess.. probably a 50K rip to the studs rebuild, mechanical, the whole 9 yards. I'm not comfortable with that level of work and finance commitment just yet and the rental as an exit option #'s just wont work.
However, we also looked at a duplex in a nice part of town, 3bd/1.5ba and the #'s are very nice. one side needs some cosmetic and appliances and the other needs some work (there was a leak at one point and the ceiling is a mess).
Question - To do this I'm going to pull funding from a few sources (401K, Savings, CC, mortgage). If there is sufficient equity (and I would make sure there was before I make an offer) how quickly can I do a home equity to pay back my 401K and CC? Is there some seasoning that needs to happen or is it really up to the lender since it would be a conventional loan?
Sorry, meant to mention in my above post that I am looking to hold and rent this property. I'll post my #'s later on once I had a chance to tweak them.