I have ranted and railed against Fannie Mae and Freddie Mac here on this blog before. Not only do they put up barriers to a true real estate recovery by keeping real estate investors, actually qualified real estate investors, on the sideline but in addition they staff themselves with asset managers that just don’t seem to understand real estate. Seriously.
Read the link above to see previous self-defeating decisions they have made. But now I have a new story.
I represent a buyer who contracted a Fannie Mae owned duplex in the Kansas City area for $140,000. Based on comps we felt this was a bit high but that taking this position would ensure my buyer got the property for a good price wherein he could do the necessary repairs and still have room for cash flow.
Bank of America did an appraisal that came back at $120,000, because of a very recent fire sale that Fannie Mae had held a short distance from the property in question. So we submitted an amendment to the contract changing the sales price to $120,000. Fannie Mae would not sign, not that they ever got around to signing the original contract, but after about 5 days of communications decided to order their own appraisal.
How did their appraisal come back? $130,000. So they will sell the duplex for $130,000, right? No. Their answer is to ignore and reject my ready, willing and able buyers and to discuss a price reduction in the “future.” We are welcome to watch the Kansas City MLS and submit a new offer when that does, or doesn’t, happen.
How does Fannie Mae get away with just suspending the realities of our current real estate market which they helped to create? How does hanging on to another asset for a few additional months and then inevitably dropping the price to $130,000 help? People, your tax dollars are at work here. The machine is clogged up with “decision makers” located in NW Washington, DC and Dallas (I believe that’s the location of the asset manager) making decisions about whichever local market you live in. I would seriously doubt if this asset manager has any actual real estate sales or appraisal experience. But I’m quite certain the AM has a minimum of 2 weeks paid vacation, health care benefits, and leaves promptly at 4:59 pm each afternoon.
It’s bad enough that we are in this current real estate situation. It frustrates me to no end to know that it’s difficult to get out of it when I see the decisions being made by people who are supposed to know what is going on.