Investors Beware!!!!!!

Hi there,

Occasionally this networking thing provides some interesting information. This comes from my friend and fellow Realtor® Scott Lee, who although not a RE/MAX Agent does have his act together. I’ve had a couple of transactions with Scott over the years and I find him to be on my “Attaboy” list, or whatever I’m going to call it…check my website (www.livingindoors.com) out at some point in the future!

Real Estate Investors BEWARE!

There is a new guideline implemented by Fannie Mae to restrict investors from purchasing a Fannie Mae REO (Real Estate Owned) and turning around and selling it for a profit (flip).

Fannie Mae has begun requiring agents who market its REO properties to include provisions in sales contracts that certain anti-flip language will be included in deeds. The language may vary, but is generally along the following lines:

Grantee herein shall be prohibited from conveying property to a bonafide purchaser for a sales price of greater than ($__=120% of sales price) for a period of 180 days from the date of this deed. Grantee shall also be prohibited from encumbering (getting a new loan) subject property with a security interest in the amount greater than ($___=120% of sales price) for a period of 180 days from the date of this deed. These restrictions shall run with the land and are not personal to grantee.

It appears the attempt is to help owner occupied buyers get into property that an investor, with more purchasing power, may have purchased instead. The problem with this concept is when a property is flipped by an investor; they quickly fix up the property usually including good curb appeal, helping to make the neighborhood look better. These flippers often help with higher values in the neighborhood as well, looking to realize a gain in the sale upon completion of the work. Time will tell if making it more difficult for Real Estate investors will help us get out of the current Real Estate slump we are in.

Scott J Lee
Coldwell Banker
www.ScottJLee.com

I find this worthwhile to pass on…