Quick HomePath Question

4 Replies

I was told by an agent who lists a ton of HomePath properties in our area - don't bother making an offer on a HomePath property unless your within 10% of what they are listed at.  "They will always say no".

This sounded a bit extreme, but yet this guy has been a real estate agent for many years and has had most of the HomePath listings in my area.

Thoughts??

@Matt Maluchnik

Hi Matt. I've seen similar things in the Baltimore market with these FNMA foreclosures.  Thing is, the HomePath mortgage went away almost 2 years ago so there is nothing special about that designation anymore.  Basically, it's a foreclosure.

Either way, the bank needs to meet your price, not vice versa, so get real solid neighborhood comps and establish your max offer.  They don't meet it, you move on.

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A useful thing to remember here is the seller side of this transaction - the performance measures for Fannie Mae employees responsible for the sale of these properties are based in sales execution and time as compared to several independent sources of value. And not for nothing, as a taxpayer you should appreciate that -- they've sold nearly a million foreclosed properties in the past 7 years and using this methodology, lost far less money as a consequence. 

Given that, it's completely unreasonable to expect that they're going to accept (or, honestly, even consider) an offer significantly below list price. This isn't unusual -- you wouldn't typically take a lowball offer on your house, why should they?

What you will see is that over time list prices will drop if the property hasn't had an acceptable offer during fairly regular 30-day or 45 day increments. There are deals to be had, for sure, but if what you're looking for is a significantly mis-valued property, they can be hard to come by. 

@Matt Maluchnik

I've read that in several places as well. I purchased 1 Homeopath Property last year and in contract with one now... 1st property kept getting a reduction because it had foundation issues, when the price finally bottomed, it was a highest and best situation (as always, multiple offers). I won with a No Inspection, Cash, 10% down. I went a few hundred over asking.

The second one I am in contract with was a tough call. They listed it and naturally Owner Occupient individuals have first stab at the property. Homeopath I believe strategically held the other 2 OO offers and waited till the 20th day and opened it up to investors. Apparently there were only (3) offers... It was a best and highest situation. I went $250 over asking, 2 week close, all cash, no inspection and only $1000 down.

They countered me with 10% down (which is the norm, my agent and I failed to recall that) and they wanted a QUICKER close.....IF all goes planned, we are closing within a 5-6 day time frame. They are basically rushing the close...I am OK with that because in my eyes, the faster we close the earlier i can start burning up time to the 90 day Deed restriction.

My advice is if your an investor and the property seems like a "normal" flip (standard renovation/rehab, nothing to crazy) go in at your best price and leave it at that (depending on how they price is, sometimes it's priced to sell sometimes they are priced to SIT). My realtor wanted me to increase my offer however I fail to listen to realtors in some cases. It's my money and me being the "investor", its my part to offer accordingly to my analysis. Maybe I won't make AS much as I normally would however time and money play a factor in offers. All business models are different, some look for QUALITY deals where some look for QUANTITY deals. I prefer a hybrid of both :-)