Freddie Mac’s Average REO Sale Yields 94% Market Value

""Freddie Mac"":http://www.freddiemac.com says its REO homes sell for an average of 94 percent of market value.
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According to ""a blog post"":http://www.freddiemac.com/news/blog/tracy_mooney/ by Tracy Hagen Mooney, SVP of single-family servicing and REO for the GSE, because Freddie Mac-owned homes “are well maintained and priced right for the local market,” most sell close to full estimated market value.

Freddie Mac sold more than 80,000 single-family REO homes in the first nine months of 2011, which the company says is a record. According to the McLean, Virginia-based GSE, it is selling more homes than it’s taking in through foreclosure.

“Although Freddie Mac's inventory of foreclosed homes has been falling and represents only a small share of all [REO] [COLUMN_BREAK]

properties, we understand the negative impact these homes can have on neighborhoods and communities,” Hagen Mooney said. “That's why our policies and programs are designed to maintain home values, reduce losses, and stabilize communities.”

Hagen Mooney points out that more than 70 percent of Freddie Mac’s REOs are sold to owner-occupants.

She says while the GSE has always been open to selling to investors, the company’s strategy is to limit the concentration of investor sales in any given area. She adds that Freddie Mac typically doesn’t consider any offers that require significant discount pricing.

Hagen Mooney also highlights the company’s ""Good Neighbor"" property preservation and maintenance best practices, which are designed to ensure that buyers purchase Freddie Mac homes in move-in condition, and that property values are maintained for neighborhoods.

The GSE’s “Good Neighbor” policies mandate that within three business days of a confirmed vacancy, each home is secured, preserved, and cleaned. The company’s contractors then continue to monitor and look after the home until it's sold, including maintaining the landscaping.

Freddie Mac’s sales cycle for its REO homes is about 120 days, which the company attributes in part to its “top-performing broker network.”