As part of our new economic situation, many banks now own foreclosed property that is being offered for sale. Because there have also been a lot of bank failures, we also have Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation) as our owners/sellers. This situation is causing some consternation among potential buyers of these properties who are unaccustomed to the rigid rules and regulations affecting these sales.
When a buyer submits an offer on a foreclosed property owned by Fannie Mae or Freddie Mac, they in turn receive an Amendment from the seller that basically says “Here are our terms…take it or leave it.” No changes to the contract addendum are accepted. The HUD has to be presented to the seller for approval a full 72 hours prior to closing. If any changes are made after that, they start the 72 hour requirement over again as though it is a new HUD.
As real estate professionals, we understand that this is the way it is with financial sellers. The problem is that the buyers often don’t understand. Realtors need to prepare their buyers to understand that the seller does not negotiate.
If the buyer becomes frustrated and backs out of the purchase, the seller knows that at some point in the future there will be another buyer who will buy on the bank’s terms. They don’t mind waiting.
J. Byron Wyndham