People looking to buy a home often wonder how their offer may be perceived. If the Albuquerque housing market is not confusing enough itself, buyers often need to consider the financial condition of the seller. Agents are not allowed to disclose motivation and, except in conditions where it may impact the sale of a home, financial conditions… yet they exist as a major undertone to negotiation and pricing.
As I see it there are two types of home sellers:
- Ones that need to sell
- Ones that don’t
While very basic, this is key information that when combined with knowledge of the neighborhood prices, is extremely helpful to buyers.
Many sellers today are moving through a backwards progression. (I didn’t even know you could progress backwards… but it seems almost reasonable in this marketplace.) Money is tight, they list their home, miss some payments along the way turning the property into a short sale, and eventually (if they don’t sell it) foreclosure.
Masked by the emotional desire to sell, often they are self confident that their house IS the nicest house on the block. They would be doing you a favor to sell this to you at the list price. Or their reasoning for the price may be more of a financial necessity. Perhaps they have to get $200,000 for their house to pay off the existing mortgage and closing cost. This can be a deadly negotiation, as it is not rooted whatsoever in the actual value.
If they don’t need to sell that is much more elusive. They may put their house on the market and take it off at will. They may try again in the spring. They are waiting for the right person to come along and knock on their door with a check in hand. As prices of real estate go up, it is a good bet that so will interest rates driving the cost of the home up even higher.
So the take away from this is to try to determine where the price of the home is sitting in the neighborhood. Ask your real estate agent to do a “CMA.” Then try to determine if the seller needs to sell or is simply testing the market. While not always apparent, there are now published sources like the current mortgage on a home as compared to the market value. This will give you
some indication as to why the home may be priced where it is.