Buying Homes Owned by Banks
and Government Agencies ...
What Benefits Might Exist
What Benefits Might Exist
Property Sellers are often showing up on real estate contracts these days as Entities or Companies, not as human beings. Government Agencies including Fannie Mae, Freddie Mac, HUD, VA, and banks are as well.
The housing inventory has been low (at least in Chicagoland housing markets), as local Sellers have been reluctant or incapable of taking a hit financially from lower housing values and sales prices. Recent trends point to increasing housing values from 2013 and into 2014, and we've been seeing competing offers on listed properties in some housing markets. As ever, real estate and housing trends remain local. But there is some hope to be found in the most recent reports.
That said, from a Mortgage Lender's standpoint, it remains important as to who the Seller is. Why? Because it matters greatly to the Buyer.
Two of the biggest entities selling properties offer special programs that are often enticing to new Home Buyers. Fannie Mae has its "Homepath" Loan Program. Freddie Mac, has their "Homesteps" Loan Program. Currently, both Fannie and Freddie are offering Realtor and Buyer incentives and bonuses.
As a Mortgage Lender, I need to know if Fannie Mae, Freddie Mac, HUD, or VA are the Seller of the property by the time of Good Faith Estimate disclosure. None of these entities pay customary Seller Fees, such as Real Estate Transfer Stamps charged by municipalities, counties, and states.
If these fees are NOT shown as a Buyer's charge/fee on the GFE (Good Faith Estimate), a Lender can't charge it at Closing. That's considered a "Cost to Cure" ... which means the Lender ends-up incurring the cost.
Another thing that often catches Buyers of Townhomes or Condominiums off-guard, surrounds outstanding Homeowners Association Fees. This is especially true when the property is in foreclosure.
During these situations, it's wise for Buyers to seek the counsel of their Realtor and Attorney (when involved) BEFORE writing a Contract ... or certainly prior to accepting the counter-offer from the Seller's Asset Manager or Seller's Listing Agent.
Other issues that crop-up fairly often include Title Fees, Surveys, and Termite Reports. Normally paid by the Seller, they can crop-up as Buyer's fees in these instances. They remain something to be on the alert for.
Oftentimes, entities (as Sellers) will sell a property "as is", and remain unwilling to negotiate repair items or Appraisal conditions asked for in an inspection. Buyers need to understand, that while they're typically receiving a "below-market" deal on their chosen property, the possibility remains that there could be additional expenses due at Closing or to be made out-of-pocket.
All this being said, some of the best opportunities to be found in the marketplace, are Homepath, Homesteps, HUD, and VA-owned properties. Home Buyers and agents must be wise, stay informed, and take advantage of current incentives and bonuses available through Fannie Mae and Freddie Mac.
* For information regarding a Mortgage for Homepath, Homesteps, HUD, and VA-owned properties ... as well as traditional purchases in New Lenox, Will County, and elsewhere in the Chicagoland area ... please contact me. I'll put my 36 years of Mortgage expertise and experience hard to work on your behalf.
I can be easily found at:
Cell or Text: 708.921.6331
Click HERE for your FREE Mortgage Consultation!
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Gene Mundt, Mortgage Lender, a Lender with 36 years of mortgage experience, will offer you exemplary mortgage service and advice when seeking: Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including: The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL.