So, if you need to sell your Medford home now, how can you compete I this housing market? Competing with banks on price is much harder for individual homeowners, who often depend on sales proceeds to be able to afford their next home. If you can afford to wait, the obvious answer is to wait for the number of foreclosures to go down, and for the Medford housing market to improve. If you cannot afford to wait, then you must rely on a combination of other advantages. The condition of your Medford home can be an advantage over REOs, which have often been neglected. Whatever you can do to improve your home’s appearance, including cleaning, decluttering, painting, minor repairs, and sprucing up landscaping will help. You should also make sure your Medford home is easy for realtors to show, even on short notice. Offering to help with buyer closing costs can be a major advantage. Banks are often less flexible with terms, and paying closing costs can make the difference for many otherwise qualified buyers who are short on cash. The way you market your home can also provide an advantage over REOs. If you are working with a realtor, make sure he or she has a plan for marketing your home effectively.

Finally, you still must be priced within the current range of Medford housing market values. That does not mean that you have to be priced better than similar REOs, but if only 4 homes similar to yours have sold in the last 6 months, your home should be priced pretty close to the 4 lowest priced similar homes on the market right now.

A cram down is an action by a bankruptcy court that reduces the amount owed on a secured debt to its current market value. Since the 1970′s, bankruptcy judges have not been allowed to decrease mortgage principal for primary homes. Ironically, this restriction was adopted to encourage banks to provide mortgages to new home buyers in Medford to avoid foreclosure. In effect, it made it appear less risky for many lenders to offer questionable loans, and less risky to securitize packages of these loans.  Fast-forward to 2009, with hundreds of Jackson County homeowners facing possible foreclosures.  Lender response to this looming catastrophe has been a joke so far. They have modified only a small percentage of at-risk mortgages, and in general their hands are tied when it comes to reducing mortgage principal. So now Congress is working on legislation that will allow cram downs, with the goal of encouraging lenders to work harder with Medford homeowners to avoid foreclosure.

Saving Medford homeowners from foreclosure is huge, but it’s not a free lunch. Declaring bankruptcy affects a homeowner’s credit for years. Depending on the details of the final legislation from Congress, homeowners who get their mortgages reduced may also have to share future profits with their lenders if housing prices have increased when they sell.

FYI: If you are facing possible foreclosure in Medford you have other options than bankruptcy. For more information Please contact the Home Ownership Preservation Foundation for information about foreclosures.

This is a carefree, low maintenance home, with front landscaping on drip irrigation, and a modest private patio off the dining area. 1633 sq ft at the end of a cul-de-sac. Close to shopping. Priced to sell at $209,000! For more information on this great offering please click here.

Reasons to Buy Now

1. Lowest Medford home prices in 4 years. I don’t know how close to the bottom we are, but it’s hard to time the market, and when buyers start to jump back into the market demand will increase and Medford home prices will rise.
2. If it’s now possible for you to afford to buy because of low interest rates (if interest rates rise later you might not be able to qualify, even if home prices continue to decline).
3. This is a Buyer’s market. There are an unusually large number of homes to choose from with affordable prices. Seller’s are much more likely to take lower offers on the asking home price or to pay the buyer’s closing costs. With the number of foreclosed homes on the market it’s possible to find homes priced 10-20% under even today’s low market values.
4. If you are a Medford seller who wants to move up to a more expensive home this may be the best time. It may seem like you are losing money if you sell your home now, but more expensive Medford home prices have dropped even more, so you can save more money on the new home you purchase than you lose in selling your current home.
5. If, including tax-benefits, it costs you about the same or less to own as it does to rent in Medford.
6. Over time, you will be able to build equity in your Medford home and one day own it free and clear, with no monthly payments at all. If you get a fixed-rate mortgage, your payments will remain the same over time, while renting home prices generally rise.
7. Home-ownership decisions are not based solely on financial concerns. The emotional and lifestyle benefits of home ownership may tip the scales for you, if the lowering Medford home prices, financial benefits and costs don’t provide strong enough arguments.

PLEASE READ PART 2 for Reasons Not to Buy Now, and How to Decide

Reasons Not to Buy Now

1. If you don’t think you will keep the home for at least five years.
2. If you believe Medford home prices will fall at least another 20% and interest rates will remain relatively low.
3. If there’s a significant possibility that you could lose your job.
4. If you’ve got enough money for a down payment on a Medford home, but have found other investments that are more attractive to you now, and you’d rather continue renting and have the opportunity to make money on those investments.
5. If it’s cheaper for you to rent in Medford, and you’re able to save every month towards a down payment or other important goals.

How to decide

1. Look at the numbers and the home prices in the Medford area. Use the mortgage calculator on the right to estimate your monthly payments for different loan amounts. Then do a rent vs. buy calculation to quantify the financial benefits.
2. Evaluate the lifestyle benefits you would expect with your own home. How much are they worth to you?
3. Before looking over Medford home prices, talk to a lender to find out how much you qualify for, how to improve your credit scores to qualify for the best mortgage rates, and if there are any special benefits available to you, such as first-time buyer incentives. You will not be obligated or have to pay anything for this service.
4. Look at home prices on-line, or ask a realtor in Medford to help you. There’s no cost or obligation to simply review home prices.
5. Consult with a tax professional or investment professional to compare costs and financial benefits of home ownership compared to other types of investments.

1. Banks have never lived in nor seen the homes they sell, and they are exempt from many requirements for disclosing issues with their homes. It is essential for buyers and their agents to investigate Medford bank-owned properties to their satisfaction before completing purchases. That means getting a home inspection and any other inspections that may be recommended by the home inspector. It may also mean checking for permits, zoning variances or engineering reports at the city or county building department, or checking well logs or paying for appropriate well tests, etc.
2. You may receive a Special Warranty Deed from the bank when you purchase a Medford bank-owned property. This limits the liabilities of the bank regarding issues with the home that originated before the bank took title. This makes Title Insurance coverage essential.
3. Most banks will not accept an offer on their property which is contingent on the sale of another home.
4. Banks will not even look at offers submitted without financing pre-qualification. Prior to making an offer on a Medford bank-owned property, you should start the loan process, and then get a letter of preapproval from your lender that will be submitted with the offer. Any funds required for your down-payment on the bank-owned property will need to be verified by the bank before receiving final acceptance. Most Medford banks will not accept a promissory note in place of an earnest money deposit.
5. Banks will generally also require a special addendum to be filled out by the purchaser of the bank-owned property. This addendum is generally written to provide as much protection as possible to the bank, and may require the buyer to give up some rights or options. Such an addendum should be read carefully and understood before you sign it. If you do not understand terms of the addendum ask your realtor any questions you may have, and consider having an attorney look over the addendum and provide counsel.
6. Make sure you are aware of and comply with any contingency periods on the Medford bank-owned property, closing dates and other important milestones. If they are specified in the bank’s special addendum, they may take precedence over terms in the original sales agreement. Your realtor should help you stay on top of these.

1. Just because it’s a bank-owned property in Medford doesn’t mean it’s a good deal. Your realtor should perform a comparative market analysis on the property to help you understand whether it really is a good deal, and how good of a deal it is.
2. Medford bank-owned properties often have deferred maintenance, and they may have missing appliances or even have holes in the walls. Banks generally require that you purchase the home “as is”, and if the bank has not paid to have the home fixed up before it’s put on the market, you may not be able to negotiate repairs or concessions. Generally, only issues that your Lender requires will be negotiated after the acceptance of your contract. During your inspection contingency period, it’s a good idea to get professional estimates on any work that the Medford bank-owned home may need, to quantify your risk if you decide to buy the house as is.
3. The former owner may have the right to reclaim the Medford bank-owned property. Oregon law permits either Judicial Foreclosures or Non-Judicial Foreclosures (“power of sale” foreclosures). If the home was foreclosed on judicially, the former owner may have the right to reclaim the property within 180 days after the sale date, by paying the purchase price, foreclosure costs and purchaser’s expenses.
4. When a bank-owned property in Medford first comes on the market it is likely to be fairly close to market value. If the home does not sell right away, it makes it easier for the listing broker to negotiate with the bank to lower the price and make it more competitive. Banks typically lower prices periodically, until their properties sell. If you find a bank-owned property in Medford that you would like to make an offer on, ask your realtor to find out how many times the bank has lowered the price and by how much.
5. Banks will negotiate on price, but timing can be important. If it has just come on the market, banks may be unwilling to accept significantly lower offers. Banks do not want to be in the real estate business though, and they don’t want to carry non-performing real estate on their books, so they are motivated to sell. They are not likely to give a property away, but will agree to price homes competitively with other comparable Medford bank-owned properties. That is good news for buyers in today’s market, because there are many competing bank-owned properties.
6. Be aware that banks transactions may move slowly. A bank may take 4 or 5 days to respond to an offer, even if you specify a 2 day expiration period. If there is more than one offer, the bank may counter all offers with a “highest and best” offer request. This invites you to come back with your best offer, and then the bank will choose one. The bank may not counter after this. You should read the counter offer carefully with your realtor and make sure you understand all terms of Medford bank-owned properties.

I’ll be posting the other 6 Things You Need to Know about Buying a Bank-Owned Property soon. Please check back.