Buying Fannie Mae and Freddie Mac properties can be a great way to save on all kinds of great real estate. Since Fannie and Freddie are lending agencies, they sometimes have to deal with repossessions and foreclosures. When a homeowner defaults on a mortgage, Fannie Mae and Freddie Mac's lenders will seek to repossess the home as a means of recovering the unpaid loan. They then sell the properties as Federal National Mortgage Association foreclosures and Federal Home Loan Mortgage Corporation foreclosures.
However, these homes are often undersold, because the FNMA and FHLMC lenders only have to make back a portion of the property's probably market value in order to cover most debts. In fact, this is what draws buyers and investors to Fannie Mae and Freddie Mac properties. They often go for up to 50% off what they would normally cost, and anyone can take advantage of this chance for savings.
All you have to do is find these public sales, but unfortunately they can be difficult to find. Most people choose to consult a listings service, making it easy to find Fannie Mae and Freddie Mac homes in one area. Listings services let you preview properties and make preliminary decisions about whether to pursue them.
Once you've narrowed it down to a few listings you like, it's time to consult Fannie Mae or Freddie Mac. Use the contact information in your listing to get as much information you can about the sale. Be sure to visit the property yourself and assess any additional costs that might have to go into it, such as repairs or handiwork. These must go into your assessments of the property's 'value', so be sure to add them to what you expect to pay for the home. You're trying to maximize the value between what you pay at auction and put into the home, and what it's worth on the open market. Most foreclosures can be obtained for anywhere between 10% and 50% off their market value!
The actual process of how to buy distressed properties usually occurs in an auction format where any bidder may attend. Be sure to set a maximum bid for yourself, and stick to it. If the bidding goes above your maximum, don't overbid! You're just cutting into the value you wanted to gain, the whole reason to buy a Fannie Mae or Freddie Mac property! There will always be other properties out there, so be patient and get the value you want.
So, let's review: Find listings. Get as much information as possible about the property you want to buy. Calculate all its costs and potential value. Attend the auction and stick to your highest bid.
Best of luck finding your dream home!
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
Notice: In accordance with FTC guidelines, we state that RealEstateProArticles.com has financial relationships with some companies and may be compensated if consumers choose to buy, subscribe or take any action to a product or service via the links on our website. Occasionally, we receive free access to review a product or service. We do not accept compensation in exchange for a positive review. These reviews are strictly the opinions of the author.
![[Valid RSS feed]](http://www.realestateproarticles.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites