Buying in Central New Mexico

I've long been a firm believer that "who the seller is" is much less important than the property and the listing price. But, things have changed.  With an increase in short sales, a supply of REOs, plenty of non-motivated Sellers, and "the clueless", foraging for a home or a bargain has gotten much more ccomplicated.

Of course, the property has to be right.  But what kind of Seller, and possibly some underlying details, needs to be determined and well considered to determine approach.

The Conventional Owner may or may not have the motivation needed to sell, but hopefully, has the ability to sell.   Negotiations are influenced more by perception and motivation of the Owner and circumstances which, more often than not, are unknown or difficult to determine. But, response to an offer should be fairly quick.     

The Short Seller lacks equity and needs one or more lenders to agree to settle for less than due.  In this case the Seller is willing to accept ANY offer that is considered "reasonable".  The ultimate decision maker is the Loan Servicer or Investor.  In a perfect world, the Bank would be quick to accept any offer that would provide a better net that an ultimate sale after foreclosure.  Aside from the difficulties to determinewhat that might entail, there will probably be "secret rules" under which they must operate.  The complexities, the work load of the Servicer and the possible need for review by a higher authority all contribute to the biggest probable issues with this type of sale, -- time and uncertainty.

The Bank Seller (REO) needs to liquidate, pure and simple.  They may have misinformation on the value of the property or the market, but they will be selling.  Over time, they will become more motivated and both reduce list price and their attitude on offers.  Generally they will respond to offers within a reasonable time.  Exceptions to quick response may occur at busy times, at the beginning of the listing period and/or if offers are low or ccomplicated.

When a bank is involved, either Short Sale or REO, "national conventions" will generally apply to the sale.  That is, there will be limited costs that they will be willing to pay, regardless of local custom.  Proper and carefulpreparation of an offer to purchase by a knowledgeable agent can greatly increase success.  Concessions that the Bank either can not or will not make will only delay the process and can loose the deal.  Often detailed instructions from the Bank or the Listing Agent are completely ignored by inexperienced Buyers Agents to the peril of the transaction.

The biggest advantages of dealing with the Conventional Seller are flexibility in terms and quick response to offers.  There may be low motivation and reluctance to make concessions, but every case is different.

With aShort Sale the advantage is the possibility of a below market deal.  Limitations on how terms can be structured and the waiting and indefinite status of the transaction for extended periods are definitely disadvantages.  The ability and attention of the listing agent is a very important factor in the potential success of a Short Sale.  It is only after a Borrower approved offer is submitted to the Loan Servicer that an evaluation of the property and the market is started.  There is often a backlog of cases adding to the delay in processing.    

REOs have limitations similar to the Short Sale on the structure of terms, but the response time on offers is only a little longer than expected from the Conventional Seller.  Part of the reason for a faster pace than the Short Sale is preparation.  With an REO, the Bank is an owner, motivated to sell, who has already determined market conditions and values.

Once you find the right property, develop an approach in negotiation that fits the type of sale.

Matt Peters, Albuquerque-Rio Rancho, NM                      Matt@REALTOR.com     
(505) 269-4791 . . . .  Your Direct Line to RESULTS
www.IdealNM.com           www.Relocation2Albuquerque.com