Further Incentive

Slashed home prices and interest rates continuing to hover near historical lows aren’t the only enticements currently available to buyers seeking a home purchase bargain.

Now, Fannie Mae and Freddie Mac are sweetening the pot by offering special limited-time incentives on foreclosed homes, turning what are already good deals into great ones, say the experts.

Fannie Mae’s current HomePath incentive, which began June 14, gives up to 3.5 percent in closing-cost assistance to buyers who purchase a HomePath property as a primary residence and close by Oct. 31, 2011. A $1,200 selling agent bonus also is available to selling agents who close on an owner-occupied property. Additionally, buyers who qualify for HomePath financing can be eligible for reduced down payments and are not required to purchase mortgage insurance or get an appraisal on the property.

“We offered this incentive to encourage owner-occupant buyers of our properties. Our HomePath properties are located in communities all over the country, and can be outstanding opportunities for families, particularly first-time home buyers,” says Andrew J. Wilson, senior manager of corporate communications for Fannie Mae. “Many of our properties have been repaired so that they are in great condition and move-in ready on day one.”

For more info, homebuyers can visit www.HomePath.com.

Although a similar closing-cost special from Freddie Mac recently expired, those shopping for a foreclosed home from the government-sponsored enterprise still can take advantage of its HomeSteps SmartBuy program. Eric Will, senior REO sales director for HomeSteps, says that buyers can currently receive a limited two-year home warranty – which covers electrical, plumbing, air conditioning, heating and other major systems and appliances. Additionally, Freddie Mac is offering up to 30 percent discount toward the new appliances. On the web, visit www.HomeSteps.com/SmartBuy for more info.

Logan Waller, broker/owner of Waller Group Properties in Dallas and a listing agent for Freddie Mac and Fannie Mae, says that it’s rare for these two enterprises to offer incentives like these at this time of year.

“Fannie and Freddie are going to great lengths to ensure that they are targeting owner occupants and maintaining home values,” Waller says. “They’re doing this by repairing the homes to average or good condition for the neighborhoods.”

“Most of these properties sell very quickly and buyers will usually find themselves in a multi-offer situation,” says Jennifer Thomson, a Coldwell Banker agent in Miami, Fla. “Right now, buying any foreclosure property is a great deal, as most of these properties are priced at current market values, which have drastically declined.”

To ensure the best success in finding and making an offer on a Fannie or Freddie property, try to enlist an agent experienced in Real Estate Owned (foreclosure) transactions, including a Fannie or Freddie listing agent who has a sales team. Look for agents familiar with the foreclosure market and Freddie/Fannie contracts, in addition to the bank negotiation process, pricing and reduction matrices and repair and marketing strategies.

Additionally, hire a local home inspector in the area of the foreclosed home you’re interested in, as most foreclosure contracts allow an inspection period, and use a title company experienced in closing foreclosure properties. Also, if the residence you have your eye on does not include a home warranty, think strongly about purchasing one – which can be purchased and renewed for an average of $300 to $500 each year.