1. Every month, more than 80,000 new families see their homes enter into foreclosure. As of 2011. Short sales have become an attractive option due to less adverse credit impact on sellers. However short sales can take a very long time to complete.
2. In New Mexico it is possible that sellers may still owe the difference between final sales price and what they owed on the mortgage. In both foreclosures and short sales it is possible that the lender may issue a deficiency judgment against the mortgagor. Further, if they forgive this debt it is possible the IRS may tax the forgiven amount as income.
3. Banks are wising up… they are finally beginning to see that foreclosures are bad and short sales are better. Foreclosures hurt everyone. They often leave a stream of unpaid bills, destroyed credit and unmarketable homes. Banks realize that they stand a better chance of a sale closer to market price while the owner is still living in the property.
4. Foreclosures can be purchased far below market value. There are deals available in all market types at this point – distressed and non-distressed. The distressed ones often come at a high price with unpaid liens and damage that may need extensive repair. Foreclosures can save you thousands, but have a professional check it out and be prepared to spend time and money on it.
5. Albuquerque foreclosures are easy to find on the Southwest MLS. Yes they are easy to find. Most search engines today allow you to specify for the status. You may however need to verify if it is “bank owned” or a short sale. The negotiation process is very different. Short sales can take from 3 months up to a year to complete.
6. What can you negotiate with foreclosures. Generally, just the price. Take your best shot because foreclosures are sold “As-Is” in New Mexico. Bring your own inspector. Also, a professional real estate agent is really best here. Negotiation, inspections and title search are key to buying a successful foreclosure.
7. Do the math… look for traditional non-distressed properties while looking for foreclosures. Everybody thinks that a foreclosure is a great deal at the beginning. In this market, it is possible to find a move in ready home at well below market value for one reason or another. Do the math to find out which is truly the best deal.
8. Most banks do not include a seller’s disclosure for foreclosures. The sad truth is that NM is not a disclosure state anyway. Other than latent defects sellers are not required to include a disclosure statement. Many real estate firms however require them from their sellers to offer more protection. But you won’t typically see one on a foreclosure since banks know very little about the history of their properties.
9. Multiple offers are common on foreclosures. Banks are going to try to get as close to market value as possible for a home. But if investors see a bargain there may likely be several. Just make your best offer. Banks consider several things in order to determine the “best offer.”
10. Real estate agent services typically are free to buyers. In most markets (including short sales and foreclosures) agent fees are paid by the seller. So why not use a local pro to negotiate and represent your best interest. They know exactly what to look for.