how to make an offer 'sweeter' for Fannie Mae

[Zach Shafer]

Was hoping for some input from someone who has a close relationship with FM.

Situation:

We know of a house that has been foreclosed on that my wife and I are interested in purchasing as a primary residence.

It is a Fannie Mae home. We have already contacted the local agent who will be the listing agent. He has already let us walk through the house twice. We want it, and we want it bad. Unfortunately, this is a well-known home in the area. The listing agent has had 6 different calls about the place, and he only believes two of them (me included) are going to be making an offer when the house comes on the market.

So that being said - what things does Fannie Mae lean towards when they are comparing competing offers? The most obvious to me is the actual offered dollar amount. Do they pay much attention to closing costs? Closing dates? Approved financing?

Here is what we have going for us -

1. We already know the house needs repairs. (septic tank & drainfield, roof needs replaced) (this is fine... we are planning this into the cost of the home - we will have no inspection contingencies or anything like that)
2. We already have financing lined up and have been pre-approved for this specific house.
3. Due to #2 above, we could easily close within 30 days.

I'm just looking for suggestions on anything else that would be a 'kicker' for Fannie Mae to gravitate towards when looking at two different offers.

Who's been there? Help! :)

thanks,
Zach

[Jon Holdman]

The best offer is going to be an all cash offer, two weeks closing, absolutely no contingencies. Near, maybe above, their listing price. Cash means a bank statement in the same name as on the offer showing the money in the bank to close the deal. And an earnest money check, certified, equal to 10% of the offers.

Is your lender going to have an issue with these repairs? That can often be a sticking point with a conventional loan on a REO property. Is the lender fully aware of the items you mention? A letter from the lender saying they're aware of the issues and will approve the loan even with this issues might help.

You'll need to prepared to make a high offer. Sometimes banks price houses right about market. Usually they will adjust for repairs. Sometimes they price lower to encourage a bidding war. Regardless of their starting price, you seem to want this house too much to expect to get a good deal on it. Usually the initial price is too high for investors to be interested. But its possible they see an opportunity to improve it and still make a profit.

REOs will break your heart. Getting your heart set on a specific REO is a recipe for disappointment. Sorry.