Simulation: a fictional property for practice.

A bank-owned house: what does the inspection change?

A Fannie Mae-owned house is listed at $310,000. You’re an investor, and the inspection finds a problem.

A fictional bank-owned (REO) house sold through a listing agent. The rules shown are for Fannie Mae and Freddie Mac homes.

• Seller: Fannie Mae, through a listing agent
• List price: $310,000
• Value from comps: About $320,000 after paint and flooring
• Your plan: Keep it as a rental

Mission 1: When can you make an offer?

The house was listed yesterday. Can an investor offer now?

• Not yet: during the 30-day First Look, Fannie Mae and Freddie Mac take offers only from people who will live there, public entities and nonprofits
• Yes, any buyer can offer from day one

Use the First Look period to run your numbers and line up financing, so your offer is ready when investors can bid.

Mission 2: The inspection finds a cracked sewer line

A camera inspection shows roots and a cracked sewer line. Replacement is estimated at $8,000 to $15,000. The sale is as-is. What can you do within the inspection period?

• Ask for a price reduction or credit, with the inspection report
• Cancel within the inspection period if the numbers no longer work
• Close anyway and hope the line lasts
• Wait until after closing to decide

As-is doesn’t mean you can’t inspect. It means the seller won’t fix things: use the inspection period to renegotiate or walk away.

The seller won’t lower the price. What do you do?

Buy, investigate or pass? Work through the drill to see what an experienced investor would weigh.