I just put a property under contract for $61,000 and well, the property looked "nice" in the pictures but it was a complete different story when I went to see it. Long short story, my contractor estimated rehab costs of 60,000 and I was estimating around 40,000. The property numbers work well as long as the rehab doesn't exceed 55,000. The ARV is 150K.
My question is, how do you deal with Fannie Mae/Freddie Mac when you try to reduce to asking price on the property? I've heard they are not very flexible, however, the property has been sitting on the market for 150+ days.
Personally i would just offer what you think it is worth. Who cares who the seller is. You have to make money on the deal.
All the bank can say is no, or counter your offer.
Hope this helps.
@Daniel M. I agree with Theo. It does not make sense to spend a lot of time trying to negotiate. Offer the price that you want to be at, if they say no you can still go with the original price or move on.
The bank doesn't make that determination. Fannie/Freddie review the offer and instruct the bank on what response to provide. That said, I agree with the other posters. Offer what you are willing to spend and let the chips fall where they fall.
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