Giving First Time Home Buyers a Chance
November 30, 2009
According to an article in the Wall Street Journal on November 25, Fannie Mae has announced a program aims at helping ordinary home buyers compete with investors on foreclosed homes.
Buyers have been very frustrated in their attempts to purchase bank-owned properties. It is quite common for their to be multiple offers and the ordinary buyer who will be purchasing with a loan has a difficult time competing with the investors who will be paying all cash.
Called "First Look", Fannie plans to consider offers only from potential owner-occupants and certain public-housing entities during the first 15 days in which a foreclosed property is on the market.
It will be interesting to see if this program actually results in properties being sold to these so-called ordinary buyers who are just wanting a home in which to live. Fannie says that nationwide it had 72,275 single family homes on its books. Investors have had a clear edge since they can close quickly and no appraisal is required. Ordinary home buyers who purchase using a loan need the appraisal to come in at the selling price. When there is a bidding situation, often the bank is wary about the potential of an appraisal coming in under the selling price, thus an investor-buyer is often more attractive to a seller. Can the "First Look" program overcome this issue?
Fannie Mae has also said that offers might be able to be renegotiated after the appraisal and that in stead of requiring a 30 day closing, buyers would now be given 45 days.
Hopefully the buyers wanting to purchase a home now because of the favorable interest rates, the attractive prices and the possibility of a tax credit will only have to compete with each other during the first 15 days of a bank-owned listing.
According to an article in the Wall Street Journal on November 25, Fannie Mae has announced a program aims at helping ordinary home buyers compete with investors on foreclosed homes.
Buyers have been very frustrated in their attempts to purchase bank-owned properties. It is quite common for their to be multiple offers and the ordinary buyer who will be purchasing with a loan has a difficult time competing with the investors who will be paying all cash.
Called "First Look", Fannie plans to consider offers only from potential owner-occupants and certain public-housing entities during the first 15 days in which a foreclosed property is on the market.
It will be interesting to see if this program actually results in properties being sold to these so-called ordinary buyers who are just wanting a home in which to live. Fannie says that nationwide it had 72,275 single family homes on its books. Investors have had a clear edge since they can close quickly and no appraisal is required. Ordinary home buyers who purchase using a loan need the appraisal to come in at the selling price. When there is a bidding situation, often the bank is wary about the potential of an appraisal coming in under the selling price, thus an investor-buyer is often more attractive to a seller. Can the "First Look" program overcome this issue?
Fannie Mae has also said that offers might be able to be renegotiated after the appraisal and that in stead of requiring a 30 day closing, buyers would now be given 45 days.
Hopefully the buyers wanting to purchase a home now because of the favorable interest rates, the attractive prices and the possibility of a tax credit will only have to compete with each other during the first 15 days of a bank-owned listing.
posted by shirley harry at 8:08 AM
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