Foreclosures an option for buyers

Misfortune for some can mean opportunity for others when it comes to foreclosures.

"It would be an excellent opportunity for someone to buy because of the prices the banks are taking on these homes," said Renée Spahn, a broker with Coldwell Banker Pro West Real Estate in Medford. "It's unfortunate for sellers. It's sad on that end."

For anyone interested in buying a foreclosed home, Spahn recommended finding a real estate agent who is a buyer's agent and has experience with foreclosures. A buyer's agent represents the buyer's interests.

Once a home has gone through the foreclosure process, the buyer is dealing with a bank.

While there are tales of amazing deals found at foreclosure auctions, Spahn said auctions may not be the best way to buy.

"At a lot of auctions, people get into a buying frenzy," she said.

A better step could be to make an offer through a Realtor to the bank that owns the home. She advised one client to make an offer on a house, but the person waited for the auction and the price was bid up above what the offer would have been.

Spahn said banks are motivated to sell off foreclosures because they have so many on their books.

While some people buy foreclosures on their own, the advantage to having a real estate agent is that the agent can make sure the property is free and clear. Foreclosures are listed at the Jackson County Courthouse and in newspapers, but a real estate agent can work with the buyer to narrow down parameters, such as location, she said.

Foreclosures can also be a good opportunity for people who already own a home, but would like to buy something different or bigger, Spahn said.

But how can a buyer avoid the risk of paying two mortgages at the same time because the first home sits on the market after the homeowner bought a foreclosure?

Spahn said a real estate agent can write terms into a deal that the purchase of the foreclosure is contingent upon the sale of the first home.

Another option is to put your home on the market now and then only go hunting for a foreclosure after you have an offer from a serious, qualified buyer, she said.

"It doesn't hurt to put out a feeler. A lot of people think it's so dismal out there, but there are always people relocating and coming up from California," Spahn said.

Colin Mullane, a broker with Re/Max Realty Group in Ashland, said buying foreclosures can be a tricky process with a lot of pitfalls.

An impatient, inexperienced buyer may not be a good candidate, but a patient person who has financing lined up can be a good candidate, he said.

Potential buyers should be aware of two different terms, Mullane said.

With a foreclosure, the home has already been taken back by the bank.

A "short sale" home is still owned by a person who is late on payments and can't afford the mortgage. There may be two or three mortgages on the property, and the buyer will have to negotiate with each mortgage lender, he said.

People who want to avoid the hassle of dealing with foreclosure or short sale properties altogether might be better off looking at regular houses for sale in the same neighborhood. The prices for those homes may be depressed because of their proximity to the troubled properties, he said.

"The best deal may not be the foreclosure or the short sale," Mullane said.

Like Spahn, he recommended anyone who is interested in buying a foreclosure or a short sale property get a real estate agent. The agent may be better equipped to haggle with banks, which normally want to sell foreclosure homes as they are, with no discount for problems such as a need for roof repairs. Foreclosure documents also need to be gone over with a fine tooth comb either by a real estate agent or a lawyer, he said.

Spahn said the real estate slump will not last forever.

"If there are people sitting on the fence because they're thinking it could go lower, they should stop waiting. It's time to get off the fence. If you wait too long, you'll be buying on the upswing right when everyone else is buying," she said.

Roy Wright of Roy Wright's Appraisal Service in Medford said home sales have already started to increase. From August through October of 2007, 65 homes sold in Ashland. During those same months this year, 70 homes sold.

That might not seem like much of an increase, but in all the earlier months of 2008, homes sales were down compared to the same months in 2007, according to Wright's statistics.

The median home price in Ashland has fallen from $415,000 in 2007 to $375,000 for 2008 as of Oct. 31, his figures show.

Wright said even though sales are increasing, prices may not have hit their bottom yet, based on historical trends.

"There seems to be about a year lag time from when sales volume changes and sale prices change," he said.

Staff writer Vickie Aldous can be reached at 479-8199 or To post a comment, visit

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