Friday, July 1, 2011

How to make an offer on a Fannie Mae home

This is a post about how to make an offer on a Fannie Mae-owned (foreclosure) home in metro Phoenix, Arizona where I’m a licensed Realtor. If you’re reading this from out of area, or long after Summer 2011, please consult a professional in your area.   Need a metro Phoenix-area Realtor? Contact me!

To make an offer on a Phoenix-area Fannie Mae home at present, you need at least the following forms, completely filled out:

  • REO coversheet
  • Owner Occupant Certification
  • Notification to Listing Agent
  • Fannie Mae Real Estate Purchase Addendum
  • AZ State Purchase Offer/ Contract
  • Agency form
  • Loan PQF

I submitted a Fannie Mae purchase offer this morning for one of our buyer clients -- it was 28 pages long!

Several of these forms you get from the Listing Agent (that’s the seller’s Realtor). The Loan PQF (Pre-Qualification Form) you have to get from the Buyer’s loan officer, and it must be dated within the past 1 to 8 weeks or so.

Currently, Fannie Mae is requiring that the Buyer complete their Fannie Mae Real Estate Purchase Addendum. That’s a fairly new requirement; it used to be buyers didn’t fill in that form at all but rather waited for Fannie Mae to send it once the buyer’s bid had been accepted. Be careful with this form! It has a couple really vital “trigger dates” in it, and the Buyer has to fill in those dates. A trigger date is my term for a date that other contract deadlines count from. For example, the inspection period counts from the Acknowledgement Date which is different from (but closely related to) the Effective Date. Fill in the wrong dates on these blank trigger date fields and you can seriously screw yourself up.

Another thing to be carful with on the Fannie Mae addendum – the form uses the terms Settlement Date and Expiration Date interchangeably, but never use the term Closing Date, which I find utterly stupid. The way the government’s attorneys wrote the form, if the closing doesn’t happen on the Settlement Date, the deal expires, per the Expiration Date. But the addendum doesn’t say what happens then! Does the buyer lose their Earnest Money? Does the deal just close on the next business day? Who knows! The Addendum doesn’t say.

Oh, and don’t forget to specifically ask for the Fannie Mae Incentive of 3.50% of the purchase price from the Seller to cover some of the buyer’s closing costs, by adding that request to your purchase offer. If you don’t ask, you won’t get the closing cost assistance! You also have to know when Fannie Mae’s offering that incentive; they don’t do it all the time.

Confused yet? You’re not alone. If you’re a buyer or potential buyer in the metro Phoenix are in Summer 2011 you’re bound to run into Fannie Mae homes. Fannie Mae’s got so many homes for sale these days, it’s like shooting fish in a barrel.  As the commercials say, “Don’t attempt this at home alone kids!”  

You really need an experienced Realtor working on your behalf when you’re trying to make an offer on a Fannie Mae home. The paperwork is just so confusing and Fannie Mae keeps changing the rules about which forms they want and how you have to fill them out.  Hire a Realtor!

Need a Realtor? Read all about Heather and Chris, authors of this site and experienced Buyers’ Agents.  Then contact us and hire us; we’re happy to help.