Sunday, March 14, 2010

Is Freddie mac's new offer approval system a good thing?

It's getting pretty common for well priced foreclosure homes to get multiple bids. Here in Manatee County I sell a lot of Bank owned homes to buyers looking for a great deal.  Our prices have dropped to about Half of the peak prices, and our inventory is tight.  Manatee County now has about half the homes from three years ago. Multiple offers is something that I am used to dealing with, but this week I was thrown a curve from Freddie Mac.

As a Bradenton real Estate agent with plenty of experience I am not afraid of multiple offers.  As a listing agent multiple offers are a great thing, for a buyer's agent not so much..

As a buyer's agent multiple offers to compete against is never good news!

That "low-ball" offer with all the contingencies does not look as enticing now..

In the past when I was involved with a multiple bid situation the listing agent would present a "

highest and  best offer form"
  This would give notice to all bidders that they had one last chance to improve the offer prior to the seller accepting one.

I was writing an offer for a Freddie Mac owned home in Parrish, FL, and was told that the seller only considers "one offer at a time".  There was also another offer in, and it would only be considered if the first was not successful.

I am not sure if I like the new system.  As I see it, the only person benefiting is the "first" buyer to come along since they do not have to compete with any offers.  

this procedure is bad for pretty much everyone else

  • Other buyers do not benefit since their offers are not seen until the prior offer fails.
  • The Seller loses too. No question that buyer that are allowed to outbid their competitors will drive up the price.  This would be more money for the lender/investor.  
  • This does not helps out the former homeowner, with potential reduced deficiencies,
  • The neighbors lose too.  A lower selling price keeps the property values down for homes in the area.  this puts further pressure on neighbors doing short sales, or strategic defaults.

I know that if I had the buyer with the first offer I would probably be less annoyed by the new procedure.  I am concerned that homes sell for a fair market value.  This is fair to everyone involved.

Also, from presenting a lot of offers on bank owned homes, slow response time from the sellers would allow for a verbally accepted offer to be delayed and a new offer pops in, beating out the buyer.

I think the best solution would be a predetermined time to present bids, and speeding up the process to get these contracts fully executed.

Buying or Selling in Bradenton or Sarasota give me a call for all your real estate needs.



Joseph C Murphy P.A.

Posted via email from Joe's posterous


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