Buying Homepath property?

Question

Hello all,

There is a house that I definitely want to purchase as an Owner occupant. I have a few questions first as I have never dealt with purchasing a homepath property. Its in Maryland btw if that makes a difference.

The property is listed for around 220,000. I want to offer less as it needs a good amount of work done. I want to offer it within the 20 day owner occupant period. Does homepath ever negotiate for less during this period. Do i have an upper hand coming in during the owner occupant period even with offering less? I of course will be occupying the property.

What would almost 100% seal an offer for me with fannie mae. Would they prefer all cash or financing with their renovation loan?

Basically I want the best possible approach to sealing the deal.

I was going to purchase a previous property and the listing agent for that one showed me the property and was willing to submit an offer for me but before I made an offer, another buyer beat me to it.

I still don't have a buyer's agent so I called this new property's listing agent. She told me she would not be able to put an offer in for me as it's unethical? She said to contact a buyer's agent from her firm. She told me this buyer's agent has already shown the property to others that are interested in purchasing this property. This doesn't sound good to me. Am i correct in thinking that I should pick my own buyer's agent? Or would working with the agent the listing agent referred me to that she works with, benefit me in some way?

There are multiple others that have looked at the property according to the listing agent.

I appreciate all answers and advice. Thanks in advance!

Nicole Thomas · Answer

Yes, helps alot.

The property is not going to be able to get conventional financing. It needs work that I can get down from a family member's company. I have been preapproved for conventional and talking to someone about the homepath homestyle loan program who said i will be approved.

I am going to be an owner occupant so not worried about investigation. However, most of the cash that I would use to purchase it with all cash and not financing would come from borrowing from a family member. Does this matter at all? If family member transferred all funds in my account and I made a full cash offer the same or next day, Will this be a problem?

The property is priced with consideration of the good amount of work needed. But i was hoping to offer 10% less if paying all cash. What do you think about this?

Since i don't know for sure if it needs a new roof or not. What about offering full asking price, then after inspection if it needs a roof asking for less. Is this possible with homepath, to ask for less for an unexpected repair?

Sarah Becker · Answer

I worked as a Fannie Mae listing agent in California for many years.

With homeopath your offer will need to be submitted on the homepath site and some additional forms and documents needed. If the listing agent doesent work with buyers then find an agent experienced especially with selling homepath or other bank owned properties. Make sure that you are comfortable trusting their advice on your largest investment, where you will spend a tremendous amount of money. Interview the recommended buyers agent. If they work n the listing agents team it may help you to be getting clear instructions from the listing agent. Just ask them if they have written any other offers or plan to. Depends on the agent you really have to judge every situation n a case by case basis.

The owner occupant first look period gives you a great advantage of not needing to compete with investors.

Most of the time Fannie Mae will not take an offer very far off the asking price in the first 30 days. They get an appraisal and use several other valuation methods that help the asset manager determine the price and marketing strategy.

If there are competing offers you will be asked to provide your "highest and best" offer which basically gives you the chance to raise your offer.

If the property is in financeable condition you will not likely receive preference for a cash offer. (In fact the asset manager may even ask the listing agent to investigate further to determine that you are a bonified owner occupant). Essentially all cash  is a red flag for an owner occupant.

Hope these tidbits help.

My fingers are crossed for you. :)

Aaron L. · Answer

@Nicole Thomas - My first property was a homepath deal. I ended up using the listing agent - not all agents will do this (on some other deals I have used an agent that was referred by the listing agent - it has helped but cannot say that is always the case). There was not a lot of negotiation room, however, they did come down a little bit. It was not only going to be my primary, it was also going to be my first house ever (I was told that helped). At the end of the day, all you have to lose is them rejecting your offer. My deal had three offers placed, mine was accepted. This may not always be the case, BUT, it's sometimes worth a shot.