Foreclosure offer advice

[James Stamp]

I've found a Fannie Mae foreclosure in a neighborhood I like.  I want to move into the house and rent my current home.  The foreclosure has been on the market for about 3 months with NO offers.  Price has gone from $295k, to $285k, and is now $275k.  My realtor says the market value of the house is $250k max.  I went by there and it looks in great shape other than the HVAC looks like it may be on it's last leg.  The lot is also very sloped and there is a creek in the back that may flood the back part of the yard, but nothing that would get near the house.  I can't figure out why, other than price that no one has made an offer.  I'm thinking about offering $195k for it to see what the bank says.  Is this crazy?  Am I wasting my time and more importantly, my realtor's time?

My current house was a BoA foreclosure and the bank only came down a couple thousand from the original asking price and it was vacant for years and needed a new roof.  

All comments are welcome and thanks in advance.  This is my first post on Bigger Pockets. :)

[Jeff Copeland]

If the house is worth $250k, Fannie Mae almost certainly isn't going to sell it for $200k. 

Fannie Mae generally prices high, then does price reductions in $10k increments on a fairly regular schedule until they start getting offers. If market price is truly $250k, you can expect it to drop again to $265k, then a few weeks later to $255k, then (maybe) to $245k.

If you are right on the value, sometime around the $255k or $245k price reduction they will probably start getting offers. 

Sometimes it helps to time your offer (and speak to the listing agent) right about the time you expect the the next price reduction to be posted. But I would not expect it to be available by the time the $205k to $195k price reduction comes around!

As Greg stated above, Fannie Mae offers are submitted online via the HomeSearch portal, so it's a pretty faceless, automated process and you rarely get to talk to the man behind the curtain.