According to recent numbers released by Freddie Mac, the GSE’s REO properties sell for an average of 94 percent of market value thanks to their being “well maintained and priced right for the local market”[1]. Since the beginning of 2011, Freddie Mac has sold more than 80,000 single-family REO homes, more than its taking in through foreclosure. 70 percent of that 80,000 have been sold to owner-occupants and the sales cycle is about 120 days.
The GSE is presently involves in launching a winter sales promotion through its real estate unit, Homesteps, which will involve Homesteps paying up to 3 percent of the final sales price toward buyer closing costs and throwing in a $1,000 selling agent bonus. Offers must be received before January 31, 2012 and escrow must close on or before March 15, 2012[2]. The promotion is available only on homes being purchase by owner-occupants. Homesteps winter sales promotion is available in Idaho, Montana, Utah, Wyoming, Colorado, North Dakota, South Dakota, Nebraska, Minnesota, Iowa, Wisconsin, Illinois, Michigan, Indiana, Ohio, Main, Vermont, New Hampshire, Massachusetts, New York, Connecticut, New Jersey, Pennsylvania, West Virginia, Virginia, Delaware and Washington, D.C.
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[1] http://www.dsnews.com/articles/freddie-macs-average-reo-sale-yields-94-market-value-2011-11-14
[2] http://www.housingwire.com/2011/11/15/freddie-mac-launches-winter-reo-promotion
I can’t comment on Freddy Mac’s success, but I suspect that Freddy is spinning the data. “Market value” is subjective at best–I would prefer to see what percent they are recouping of the last price paid on their REO properties. I also wonder about “priced right.” Bank of America, for example, at least around Northern Virginia, is fixing up their lower-end properties, advertizing them at bargain prices so as to get multiple offers, then selecting the full-priced offer with the highest down payment, regardless of whether the bidder is looking for a primary residence or not. I want to see GSE management adhere to Civil Service pay scales and to publish their policies and procedures online, so as to be accountable to Congress and to the people they serve.