Fannie Mae has launched a pilot program in three markets in which it's only accepting offers on properties in its real estate owned (REO) inventory when they are first submitted online by agents representing buyers.
By requiring that all offers be submitted by buyer's agents, Fannie Mae may also be able to prevent "property flopping" -- a fraudulent practice in which listing agents representing distressed or REO properties receive multiple offers but withhold one or more of those offers in order to help an investor purchase the home at a lower price.
If the six-month HomePath Online Offers pilot program is a success in the three test markets -- Orlando, Fla., San Diego and Detroit -- it will be expanded to markets nationwide, Fannie Mae said.
The stated goal of HomePath Online Offers is to provide increased transparency and efficiency in the REO bidding process by providing buyer's agents with offer confirmations and allowing them to track the status of submitted offers.
This is a great idea, especially for home buyers in multiple offer situations. And especially for home buyers at lower price points that have been competing with investors (who usually offer all cash, and in my experience very few buyers can compete with that). My only concern would be that it slows down the process, but hey, the process of buying bank-owed homes is already a marathon to get through. It will be interesting to see what the results are after the six-month trial period.