Irvine,Orange County Real Estate Market News

Yesterday, I was invited to the Fannie Mae regional listing broker training in Long Beach California and I have to say it was such an eye opening experience.  If you have ever had the opportunity to view a bank owned home, you know that 90% of them are not in the best condition (to say the least).  It is not uncommon for most bank owned homes to be sold as-is, typically requiring many repairs to be done by the buyer, and rarely qualifying for FHA loan programs.

  Typical issues with most bank owned homes can range from dirty/unusable carpets or flooring, missing appliances, torn window screens, neglected landscaping, holes in the walls, and destroyed window coverings.  Extreme cases can also included boarded up or broken windows, missing toilets and sinks, missing lighting fixtures, stripped copper piping, and so much more!  Bottom line is that most of these homes are fixer uppers and will generally not meet the FHA financing guidelines that many first time home buyers are looking to take advantage of.  In addition, most traditional banks are listing these homes below market to generate a feeding frenzy of buyers in hopes to get above asking price and in some cases above market value.  Because of these issues, most bank owned homes are selling to investors who are paying all cash only to flip the home and make a profit or rent it out for continual income, while true home buyers looking for a home to live in long term simply take a back seat. 

Most bank owned homes do not cater to the average buyer and actually push them away at times, as the banks number one concern is to sell the home in the fastest time possible, with the least amount of costs to them, with absolutely no concern to the overall, long term affect this has on the market.

In addition, 90% of bank owned homes listed on the MLS today have 1 or even no pictures, and the listing agent can be impossible to get a hold of at times which makes it very hard for buyers and/or their agents to submit offers or get any updated information.

Fannie Mae is doing the exact opposite!  Their goal is to cater to the owner occupied home buyer with hopes to stabilize the market using what they call the Neighborhood Stabilization Program.  This is what Fannie Mae wants and it sounds like they will not rest until it happens.  Yes they want to sell their homes in the fastest amount of time, however not at the cost of the overall market.

To ensure they do everything they can to attract owner occupied buyers, here is what they have in place:

-          Make any and all necessary repairs to their properties to bring them to a sellable, presentable, and marketable condition, move in ready, and comparable to the current competition and surrounding neighborhood homes.

-          Offer the First Look program which allows owner occupied buyers a first look at the home for the first 15 days.  Fannie Mae will not look at or consider investor offers until after 15 days of the home being on the market.

-          Sell homes at market value and list at a price that reflects market value.  They are not looking to under price homes just to generate a multiple offer situation with buyers over bidding each other.

-          Require that the listing broker create a detailed description of the home in the MLS, describing the home and focusing on the features of the home that buyers are looking for.  In addition to the description, they are requiring listing brokers to upload at least 6 high quality color photos in the MLS for buyers to view on the internet.

-          Require that the listing broker place a color brochure in the home as well as any applicable Fannie Mae buyer materials.

-          Require that the listing broker treat everyone fairly by returning all inquiries on the home regardless of who or where the inquiry comes from

-          Offer special HomePath financing programs with 3% down payment, no appraisal required (since the price has already been approved by them), no Mortgage Insurance, and up to 6% credits to the buyer for closing costs

-          Discourage the use of words like “REO” or “Bank-Owned”, as they are trying to break out of that stigma.

-          Offer broker trainings to ensure proper protocol is followed by all Fannie Mae listing brokers

-          Ensure that these brokers are following the required protocol for listing and selling Fannie Mae homes by using secret shoppers as well as providing the number 1-800-7FANNIE to allow for quality control complaints and/or suggestions.

I love the direction that Fannie Mae is taking and I am confident after attending this seminar that they will achieve their goals and slowly do their part to turn things around!

{ 5 comments }