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Updated over 13 years ago on . Most recent reply

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Will H
  • Macon, GA
1
Votes |
3
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Fannie Mae owed property going to auction

Will H
  • Macon, GA
Posted

I'm looking at a Fannie Mae owned property. The property was forclosed on and taken by Fannie Mae in May 2010 (county records show the sale to FNMA was for $286k).

Homepath lists the property currently at $161k.

I saw an old Google cache from March 2011 where the property was listed on auction.com w/ a starting bid of $59k. It apparently didn't sell b/c it's up for auction again next week w/ a starting bid of $39k.

Any chance they'd let this thing go for $50k? Am I wasting my time? House appears to be in decent shape -- I'm going to see if I can get the Homepath-listed agent to show me the inside. It's in a pretty rural area of Georgia -- so I doubt there were any bidders for the March 2011 auction.

Thoughts on the reserve? Is it always a per-property reserve? Could they have pooled several houses together and made an aggregate reserve?

Any insight appreciated... This would be my first investment property.

Most Popular Reply

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Robin Grimes
  • Real Estate Investor
  • Houston, TX
326
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37
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Robin Grimes
  • Real Estate Investor
  • Houston, TX
Replied

Hi Will,

Here is my experience with FNMA and Auction.com

I bought a FannieMae property through Auction.com in June 2011. (Spring, Tx)

Here's how it went.

1. Saw a property on Homepath.com when it was first listed. Asking 89.9K. I generally watch a potential property on Homepath for the price drops, which occur every 30 days.
2. Went to "under contract" before the "first view" period ended.
3. Few weeks later it was "back on market" at 84.9K.
4. Still to much so I kept watch. Next time I check it's at 79.9 so I have my agent contact Listing agent to make offer.
5. OOPS, we're told that property had been contracted to sell through Auction.com. I watched the auction but did not participate. There was a 'winning' bid but I don't know the amt. Homepath.com changes status to 'Under contract'.
6. Few weeks later I'm on Homepath and there is the property again, it's "back on market" again, for 79.9 . I check the MLS and it's NOT on MLS. That is very strange.
7. I call listing agent and am told that he has no idea, it's still with Auction.com and he thought it was sold.
8. After many emails and calls to Auction.com I get a manager who tells me that the winning bidder backed out, losing his deposit.

HERE IS KICKER:
9. Auction.com manager tells me that they still have property consignment, but that the bank was not going to auction it again. The manager told me that if I would submit an offer, he would submit to bank as a "winning bid". There is no negotiating, bank will just accept or reject.
10. I submit offer of 59.3k. (Price: I'm using Homepath Investor financing with 15% down so this is the lowest bid possible to keep loan over 50K. I had to wire a deposit to some law firm in Dallas.
11. Listed my agent on offer, she only got a 1% commission per Auction.com rules. I try to keep my team members happy.
12. Bank accepted offer after about 5 days and we went to closing a few weeks later.

4/2.5/2
2100sf in very nice older neighborhood.
Repairs: $9K
Reasonable ARV: $110k
Currently rented at $1275

Summary:
Auction.com is NOT a real auction, despite their name. They just generate offers that the bank can accept/reject. Expect the bank to accept somewhere around 70%+/- of what they are asking on Homepath. Whether it is through Auction.com or not.

Robin

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