Finding government-owned foreclosed properties in your area just got a little easier. The U.S. Department of Housing and Urban Development has made available an up-to-date  searchable mapping  portal that shows  where all foreclosures  owned by FannieMae, FreddieMac and the FHA are located.

The link to the HUD portal is http://www.huduser.org/REO/reo.html.

Chesterfield County  held an informal meeting regarding the roundabout planned for Old Hundred Road and Brandermill Parkway at Swift Creek Middle School  last night.  Plans and renderings of the project  were made  available for viewing and citizen input. The Brandermill Board of Directors unanimously approved the roundabout in September, 2010. The  project takes $230,000 from the capital improvements funding for Clover Hill High School, and additionally appropriates $308,000 from area road cash proffers. They hope to have the project completed later this year. A copy of the plan rendering is attached below.

brandermill roundabout plan rendering.pdf

Many of the homes for sale today – as many as half in some markets – fall under the category of “distressed properties.”

These are homes that have either gone through foreclosure or are being marketed as “short sales.” In a short sale, the homeowner can’t afford to maintain the mortgage, but the lender – rather than foreclosing – agrees to the sale of the property for less than the balance of the loan.

These types of sales have different dynamics than traditional sales – with more paperwork, often a longer transaction process and, in some cases, more frustration. For these reasons, many buyers shy away from foreclosures or short sales.

However, if you understand the potential pitfalls of purchasing a distressed property – and work with an agent who has a thorough knowledge of this market – you can get a great home at a great price.

Thousands of RE/MAX agents have been specially trained in working with foreclosures or short sales through the Certified Distressed Property Expert class or a similar course. They can guide you through the process and help you locate and purchase just the right home for you.

This is an outstanding time to buy a home – distressed property or not. With historically low interest rates, and a glut of homes on the market in many areas, there are bargains to be found.

Is a distressed property for you? Here are pros and cons of buying one.

Advantages of Buying a Distressed Property

First, you’ll be dealing with a highly motivated seller “ either a bank in the case of a foreclosure, or in a short sale, sellers who are in financial trouble and very interested in getting out of a mortgage they can no longer afford.  

These types of sales take much of the emotion out of the process. You won’t be insulting anybody, for instance, if you make an offer that’s lower than the asking price. (That’s not to say that the low offer will necessarily be accepted, of course.)

Lenders are extremely interested in getting these homes sold and off the liability side of their balance sheets. Many foreclosed properties can be purchased for only a percentage of what they would have commanded five years ago. (This situation is beginning to change, though; bidding wars are breaking out on some foreclosed properties these days, especially those that are moderately priced. Your RE/MAX agent will know what’s going on in this area and will be able to help you arrive at a reasonable strategy for making an offer.)

If you’re looking at a short sale, you’re not likely to get quite as good a deal as on a foreclosure. But there are definite advantages to purchasing one of these homes. For one thing, since the homeowners want to get the home sold quickly, they are likely to keep it well-maintained and in good move-in condition.

Disadvantages of Purchasing a Distressed Property

If you’re looking for a “steal,” you’re probably not going to find it. The market is heating up, with more and more buyers jumping into the market. If you’re purchasing a home to live in, you’ll often be competing not only against buyers similar to yourself, but against investors. More competition inevitably leads to higher prices.

The transaction process for short sales or foreclosures often takes longer than for traditional transactions. It’s sometimes not clear which lending institution actually owns a mortgage loan, and it can take time to get it all sorted out “ especially if there’s a second mortgage involved, which is often the case.

Some foreclosed properties are also in rough condition. Many have sat idle for a long time with minimal or no maintenance. The departing owners may have sold off fixtures, or damaged the property.

Interested in searching for foreclosures in your area? Access the Foreclosed Properties database here on remax.com.

Purchasing Tips

It’s critical to have the home professionally inspected before you make an offer or put down earnest money. The inspector will assess the structure’s soundness and may uncover problems that would be very costly to repair. Banks usually sell foreclosed homes as-is, meaning they won’t make any allowances for repair. And even in a short sale, they likely won’t make any such allowances, because they’re already losing money on the transaction.

You should have your financing in order before pursuing a foreclosure purchase. Pre-approved buyers have the best chance of getting the property in case of multiple offers. Also, banks generally aren’t interested in contingencies (for instance, needing to sell your current home before purchasing another).

You might also consider hiring an appraiser who’ll tell you what the house is worth. A RE/MAX agent can also perform a Comparative Market Analysis.

Distressed Properties and FHA Loans

If you’re a first-time homebuyer, a federally insured FHA (Federal Housing Administration) loan might be a good option. The FHA has a program to help you repair a fixer-upper. You can get one loan that combines the mortgage with the repair costs. The amount of the loan is based on the projected value of the property once repairs are made.  

FHA loans only require a 3.5 percent down payment “ compared to 20 percent with conventional loans “ and the down payment can come from an employer, family member or charitable organization. FHA loans also have lower closing costs than conventional mortgages.

Since the federal government insures these loans, you’ll get a competitive interest rate and lenders may be willing to give you terms that make it easier to qualify for a loan. If you have less-than-perfect credit, it’s easier to obtain an FHA loan than a conventional mortgage.

About HUD Homes

FHA-insured homes that go into foreclosure are acquired by the U.S. Department of Housing and Urban Development (HUD). HUD homes are offered for sale through Internet sites managed by management companies under contract to HUD.

Real estate agents who register with HUD can submit offers on behalf of their clients. HUD pays the agent’s commission.

HUD homes are sold as-is, without any warranty. HUD doesn’t make repairs nor pay to correct any problems. Again, that makes it critical to have homes inspected before making an offer.

In designated revitalization areas, law enforcement officers, K-12 teachers, firefighters and emergency medical technicians can purchase a home at 50 percent off the listing price. (They must commit to live in the property for three years.) Additionally, evacuees from hurricanes Katrina, Rita or Wilma can purchase a HUD home at a discount.

Maybe it’s just me, but it certainly feels like selling prices have been dropping for a looooong time. Since the market peak in 2004-2005, many sellers have found themselves chasing the market trying not to over-price their homes as sales slowed down. How did selling prices in Midlothian actually do in 2010?

Honestly, average sold prices in Midlothian were all over the map in 2010. From a low average monthly price of $268,633 in May, to a high just two months later of $317,510 in July, average prices were hardly predictable. What is encouraging is the uptick at the end of the year. A sign of things to come? Hmmm…

How does 2010 compare with average sold prices over the last five years in Midlothian? Let’s take a look…

 As you can see, the drop in average sold price last year was a modest 1.92% from the previous year. That’s encouraging considering the 8.03% drop in 2009.

So what does all of this mean? In Midlothian, it appears the descent of sale prices has dramatically slowed down. Will it stabilize? Maybe. At least it’s headed in that direction. We shall see…

What a year! From Homebuyer Tax Credits,  record low mortgage rates, rising inventories and  record high foreclosures, through Snowmageddon, the ususal summer water restrictions and tumultous mid-term elections, we still managed to get through the year in one piece, more or less.

So how did home sales fare in Midlothian this year? The Homebuyer Tax Credit certainly seemed to kick up the activity in the first half of the year, but after the initial expiration of the program on June 30th things seemed to almost return to the pre-HTC stagnancy. What do you think?

No need to guess. Let’s take a peek at the numbers from 2010 for Midlothian.

(Click graph to enlarge.)

There’s no question the HTC had a dramatic effect on home sales, particularly April through June. But watch that next step into July! Pretty precipitous plunge, huh? It looks like 23114 sales took the most dramatic post-HTC drop, followed by 23112 and 23113. From August through the end of the year, sales really flattened out, although higher than volume at the beginning of 2010.

What about prices? How did they fare through the year?

 We’ll talk about that tomorrow…