Been trying to get an answer from the banks for weeks or months on whether or not your short sale has been approved?

Are you a buyer trying to buy a short sale? Or a seller desperately waiting for that "yes" or "no" that will make all the difference?

Maybe you're an agent tearing your hair out over the hours you spend on hold with banks.

There's help at hand, finally! No matter where you live in Virginia, there's information here for you.

http://hasmyshortsalebeenapprovedyet.com

This site will get you the straight scoop on whether or not your short sale has been approved in seconds.

I just got back from a class on short sales. Things keep changing and you have to try to keep up with the latest trends.

Here's the biggest take away as far as recent changes to the short sale process go.

Banks are much less inclined to forgive the debt on a short sale. This is particularly true of the second mortgage holder. And, they're willing to hold the deal hostage at the last minute in order to get their pound of flesh.

It brings up the question of whether a short sale, deed in lieu of foreclosure or foreclosure is better for the homeowner. And, I'm going to tell you that if you're a seller wondering that you shouldn't be asking me.

If you're not talking to an attorney who can protect your interests, with this much money at stake, I think you're making a mistake.

A couple of years ago, most debt was wiped out completely on a short sale. So, if you got one done then, be very, very glad!

The other take away is how difficult these things still are. I've seen press reports that they're getting easier, banks are getting more reasonable or smarter or more efficient. Don't believe it!

On a short sale, if you go from contract to settlement in anything less than 120 days, consider yourself lucky!

If you're a buyer you're going to have to weigh your ability to wait that long against the incredible deals that are available on short sales. The truth is that most buyers are deciding short sales won't work for them. That makes the deals better for those few willing to endure the pain of the process.

There's a new roadblock on the way to getting to settlement these days.

The number of people refinancing has skyrocketed. And, as a result banks and some of the people they rely on are overwhelmed. Appraisers are overbooked. Lenders are pushing out settlement dates to be sure they can get everything through underwriting.

There are still settlements happening in 30 days, but it's getting a lot tougher.

Interest rates won't stay at this rate forever. In fact, interest rates in the mortgage markets will jump before a lot of other interest rates do. Mortgage interest rates are very sensitive to inflation worries. With all the money being pumped into the economy, I suspect this is a pretty small window of opportunity before rates start to move back up.

But for right now, if you're buying a house talk to your lender about whether 30 days is doable. And, if you're a seller, don't be surprised to see delays on the way to settlement.

Final February numbers became available today. There are no startling changes to current trends. Inventory continues to decline. Sales continue to look pretty strong.

Culpeper's absorption rate indicates that current inventory would be entirely absorbed in just under 13 months. That's the best that number's looked in a very long time.  In fact, for the first time in several years Culpeper's absorption rate is higher than Fauquier County's rate. Fauquier County's absorption rate shows it would take almost 16 months to get rid of current inventory. Prince William County stays at an astonishingly low 5 months. And, Rappahannock continues to move along at its own pace!

The biggest surprise to me in this month's data is that we did not see the big jump in new listings that I expected we'd see. Typically this is when you see sellers trying to get a jump on the spring market and inventory starts to climb. And we did see small increases in the number of new listings in a couple of counties. But they were very small increases and sales increased enough that there was no impact to overall inventory.

Sometimes what I see on a particular day is more striking than numbers. Today I was out showing properties in Prince William County. I showed four properties. The first one had already gotten one offer in today. At another property we were greeted by an agent and her clients who informed us that the bank had already accepted their offer. At the third a property that had just gone on the market this week already had cards from 21 agents that had shown it. And, our showing was interrupted by another couple right behind us.

The only property of the four that didn't appear to be overrun with potential buyers was one that clearly had water issues and possibly even foundation issues in the basement.

If you're looking at properties in Prince William County that are under $350K we're back to multiple offers, bidding wars and potential buyers tripping over each other in houses.

Overall, the market seems healthier and I'm pretty optimistic that the number of sales overall will be substantially above 2008. I still don't anticipate a big jump in prices. However, prices in Prince William are likely to increase this year if current trends continue.

Sellers have reason for optimism. Buyers still have a great market, but there's definitely a sense of urgency if you're buying in Prince William County.

The interpretation of Paragraph 7 of the local real estate contract came up recently with a buyer client. I'm sure my client isn't the only buyer to wonder about definitions for this paragraph so I thought it would make a good blog post.

Here is the language of the contract:

Purchaser accepts the Property in the condition as of the Contract Date except as otherwise provided herein. Seller warrants that, except as otherwise provided, the existing appliances, heating, cooling, plumbing, electrical systems and equipment, and smoke and heat detectors (as required), will be in normal working order as of the Possession Date. Seller will deliver the Property in substantially the same condition as on the Contract Date and broom clean with all trash and debris removed. Purchaser and Seller will not hold the Broker liable for any breach of this paragraph. Seller will have all utilities in service through Settlement or as otherwise agreed.

The phrase in question is "normal working order".

This phrase is, unfortunately, open to interpretation. For example, when you bought your oven, it was calibrated at the factory so that when you turned the dial to 350 degrees, that's exactly what temperature you got. However, as your oven has aged, there's a pretty good chance that there's been some slippage. 350 degrees may now mean 360 degrees. Should "normal working order" mean that it must heat at exactly the precise temperature it did when new?

Typically, this phrase has been taken to mean, if it's working at the same level as it was on the contract date, that's good enough. That's barring any negotiation on this point in the home inspection.

My client questioned whether "normal working order" shouldn't really mean "to current code". And it definitely is not interpreted in that way. If the home was built in 1940 there is no requirement that it meet current code. Although, renovations/additions must have met the code at the time they were built.

As with all contracts in Virginia, remember that this is very much a "buyer beware" commonwealth. Do all your due diligence and take it seriously. When you get to the settlement table it's too late!

This is another in a continuing, occasional series on how to choose a real estate agent.

Previous posts have focused on more concrete, measurable things. But I think the softer side of this equation also merits some focus.

Perhaps one of the most important elements in choosing a real estate agent is to get one with whom you feel comfortable. You need to "click". The process of buying or selling a home is stressful, even under the best of conditions. And, heaven knows our current market, even if you're buying, can be tough. You want that interaction to be as comfortable as possible.

I know that "comfortable" is going to strike many of you as too soft and mushy. So, let me see if I can help you with a little better definition.

You want someone you can communicate with directly and honestly. You don't want to worry about hurting their feelings. You don't want to worry that they'll dismiss your fears and worries without listening. This stuff is important and you need to be able to talk openly what you're worrying about, where you have misgivings. If things things stay bottled up you can make a mistake because you didn't ask the right question. And, all those unsaid things can definitely poison a relationship!

There are people out there who take stress in, amplify it, and pass it on to everyone they meet. Then there are others who are good at taking the stress, absorbing it and killing it. They pass along their calm to those they come into contact with. You definitely want the latter as your real estate agent. When the little road bumps occur you don't need someone telling you the sky is falling!

Comfortable also means you have a good fit in terms of communication styles. If you love e-mail and hate the phone make sure your agent feels the same way. (Or at least is willing to modify her style for you!)  And, if you want long, chatty phone conversations and all you ever get are e-mails, there's probably a communications mis-match. It's a good idea to indicate early in a relationship how you like to communicate and making sure that works for everyone.

The soft stuff really does matter. Pay attention to this and the rest of the real estate experience will be much better!

I was supposed to have a settlement yesterday. My clients are buying a foreclosure. (The one that we've been working on for months and months and months!)

I know it will come as no surprise to many of you that the settlement didn't happen.

Why, you ask......?

The original estimated settlement statement (HUD1) differed from the final numbers by.....TEN CENTS.

Ordinarily, the change would be made and we'd have approval from all parties for the change in a matter of minutes and would proceed with settlement.

But, this ten cent change had to go back up the chain of command on the bank's side. And, so, we're still waiting. Since this was Friday and no bank is going to give us final approval over the weekend settlement won't happen before Monday.

Except that this week, Monday is a holiday. So, now we're looking at Tuesday at the earliest.

So, how much do you think it cost the bank, to approve this ten cent change? How much in lost time (wages) for the employees who worked on this? How much did it cost them to have this money in my clients' pockets and not theirs for these extra few days?

This is the culmination of months of negotiations as the bank continued to get lower offers from my clients after they rejected higher ones. And, in one case, lowered the price while we had a higher offer on the table!

There are very well managed financial institutions in this country. This isn't one of them.

Clients I'm working with who are trying to buy a home settled on the one they want this week. It's a foreclosure and, as with most foreclosure properties, it's sold as is. That means we can't make the offer contingent on a home inspection or a radon inspection.

Normally, what I advise clients to do in this situation is to have a home inspection done before writing an offer. But in this case the bank already had several offers and gave us a deadline if we wanted to submit an offer. We had less than 20 hours to do so.

It's impossible to get a radon inspection in that time. And, it's practically impossible to get a home inspection done that quickly. In the end, my clients decided to pass on writing an offer on this home.

Here's my dilemna. I advised them that it's certainly not prudent to buy a home without an inspection. And, that's true. But the deeper truth is that I'd have put an offer on this home without a home inspection. It's a pretty new home, built in 2005. I see nothing that worries me, nothing to suggest water or pest issues, my two biggest worries. I am, by nature, less risk averse than your average individual.  And, so, I'd have jumped in and made that offer.

But, it seems like the wrong advice to give to clients. First of all, let's all admit that we live in a litigious society. God forbid something seriously wrong shows up after they've moved in. These are very, very nice people. But that doesn't mean they wouldn't sue me for giving them bad advice and costing them a lot of money. And, that does impact what I say.

I also try very, very hard to never push my own personal likes, dislikes and personal biases on my clients. So, just because I'm willing to take that risk doesn't mean I assume that my clients have that same willingness to take risks with what may be their largest investment.

I'll admit that I remain a little torn about this. It's possible this would have been a good home for them. And I'll never know whether my advice was right or wrong. Don't you hate that?!

I promised a sneak peak at the August numbers. And, overall, they're looking good. The number of closed sales looks like it stayed pretty close to July numbers. But those were good numbers overall. Inventory seems to have dropped significantly in most markets. Final numbers will be out next week and I'll have a more detailed analysis then.

And, while I'm giving you impressions, here are a few things that hit me after showing dozens of homes over the weekend.

• The showing instructions provided for many of the real estate agents were often wrong. There were a lot of people in homes where the listing agent had said they were vacant or out of town. Surprises are never a good thing!
• Overall, foreclosures are priced significantly below the rest of the market. There are a few banks who still aren't getting it. But most have priced these homes to move! However, most foreclosures will require, at a minimum new paint and carpet throughout the house.
• Short sale pricing is all over the map. And, many of the properties where the bank has already approved the short sale price are going to actually sell for much less. Or, the banks will not accept the offers and it will end up in foreclosure (at a much lower price).
• There were a substantial number of short sales where it was clear an offer had disappeared after buyers gave in to frustration when the bank took too long to make a decision. I suspect the real surprise is that there weren't more of those!
• For the first time in a very long time, we ran into other agents with clients showing the same homes at about the same time. That's got to be a good sign!

I'm fully booked this weekend showing properties to potential buyers.

Great news, right?

Here's the thing, out of all those buyers, not one of them wants to see anything in Fauquier, Culpeper, Rappahannock or Warren Counties.

Next week I'm going to do a very, very specific analysis between a few houses in comparable subdivisions in Fauquier, Prince William and Loudon counties. I think the price comparisons will be surprising to a lot of people.

Other Coming Attractions Next Week:

• Early Peek at August Numbers
• Poplar Springs Efforts to Go Green
• Re-inventing Warrenton

Have a wonderful Labor Day weekend!

I wish I'd bought a house on a busier street.

I wish I hadn't wasted my money on a home inspection.

I wish my commute was a little longer.

It was such a waste of time test driving the commute ahead of time.

I'm so glad I didn't worry about resale when I bought this house.

I so wish I'd bought more house than I could afford.

Using the seller's agent and having no representation was definitely a good move.

I'd just as soon not see photos on listings on the internet.

I wish I hadn't saved up so much money for the down payment.

I love that heavy metal rock band that practices in the garage next door.

Since foreclosures are such a big part of the market right now, I'm going to do a few posts on some of the issues that are likely to arise if you're buying a foreclosure.

Today I'm going to talk about settlement companies.

Once the bank has given you a verbal agreement that they've accepted your offer, you'll get an addendum (or, more likely, multiple!) One of the clauses you're going to see in that addendum concerns your choice of settlement agent.

The bank is going to want you to use their settlement attorney and there are several ways they may try to make this happen.

One is to incentivize you. The addendum will basically offer you some discount or deal if you use their settlement company. The most common one here is free title insurance. The problem with these incentives is that (as with new construction) you will very rarely actually save any money. Reports are now coming in about the padded fees for these settlement companies in order to make up for giving away the title insurance. In short, you'll be lucky if you save $50 and may actually end up paying more.

The other way a bank can try to get you to use their settlement agent is to simply say in the addendum that you, the buyer, are obligated to do so.

Let's make it clear right now, that you are not obligated and nothing a bank says in an addendum can make you obligated. A buyer in Virginia always has the right to choose their own settlement agent. And, a bank's attempt to get you to use their settlement agent without disclosing the financial relationship between them is a violation of Federal RESPA laws.

The problem becomes that many buyers desperately want the house and are afraid if they don't agree with the addendum without any changes their offer will still be rejected. I understand wanting the house. But it's my job as your agent to also make sure you're protected.

So, go ahead and sign the addendum and get the whole thing ratified. Then your real estate agent should write a notice, informing the seller (in this case, the bank) that you'll be using "X" settlement company instead.

Any clause in any contract forcing you to use their settlement agent is not enforceable. And, in all honesty, once they have a ratified contract in hand and the money is in sight, they're unlikely to balk.

By the way, the other reason you may not want to use the settlement company recommended by the bank is that the process is already slow enough! Since there are very few settlement companies working with these banks, most of them are completely overwhelmed. Good luck getting a settlement done in a timely fashion!

And, last, but not least, the settlement company is going to be doing the title search and make sure you really do own your house when you actually close. You want that done as thoroughly as possible by someone who cares about protecting your ownership interests. The bank's settlement agent would seem to have someone else's best interests at heart!

It feels like we're all moving in slow motion these days in the real estate industry. Or maybe we're just wading through deep mud that's slowing us all down!

Or choose your own mental image here.

And, there's one segment of the real estate industry that's almost single handedly responsible for the slow down...lending institutions.

With foreclosure sales making up 2/3 of Culpeper sales last month and 1/2 of those in Fauquier, a lending institution is actually the seller in most of the sales happening these days. If you add in short sales, where the lender has to approve any deal you're definitely dealing with the vast majority of transactions.

Lenders are moving very slowly on these things. On one foreclosure sale I'm working on right now it took my buyer clients about three weeks to even get a response to their offer. And there are enough stories around this to fill up a blog!

But lenders aren't the only ones slowing up the process. Listing agents who handle foreclosures are typically specialists in this area. Foreclosures are about all they do. Lenders typically offer less compensation on each individual deal in exchange for providing large volumes of transactions. And, so you get agents who are completely overwhelmed by the number of listings they have, but can't afford or won't pay to get help.

I heard one story last week about a buyer's agent bypassing the listing agent when he wasn't getting anywhere and asking the settlement company to talk to the lender directly to get things done. A week after settlement had taken place the listing agent still claimed to be unable to get an answer from the bank on outstanding issues! (This agent was completely unaware the deal had already settled!) More likely the agent wasn't even trying to get an answer as the issue had fallen through the cracks.

Documenting everything I do, every conversation I have, every fax or e-mail I send and who I talk to have become even more important than usual.

If you're trying to buy in the midst of all this, be aware that you will need a lot of patience. You may very well get a good deal buying a foreclosure or short sale. But it may require that you have the ability to wait several months to get the deal closed and get into your new house. Keep that in mind as you search for your next home.

Me? I'm getting just a little tired of slogging through all this mud. But like everything else, it's cyclical and this too shall pass!

More and more often these days I walk into a house and the first impression is.....

OMG! Phew! What is that awful smell?!

Now, to be fair, most of these homes are vacant. (Over 3/4 of the homes I show these days are vacant!) And, a closed up vacant house will always start to smell, over time.

Some of the smells I regularly encounter:

• Mildew
• Mold
• Pet urine
• Cigarette smoke
• Dead, rotting animals

There are plenty of others, many of them not easily identified.

If you're a homeowner, selling a vacant home, either you or your agent should be checking from time to time to see if the home has acquired any unfortunate odors.

Keep the air conditioning running! I know you're not living there and hate paying the bills, but, believe me, what you'll net in a better offer is more than you'll lose on paying those bills.

If there are some stubborn odors, take steps to remedy them. Get rid of drapes, have carpets professionally cleaned, consider getting an air purifier.

By the way, adding really smelly air fresheners is not the same as taking care of the problem!

Remember, the sense of smell is powerful and has a major influence on our emotions. No one falls in love with a stinky house! Even if they still buy it, the price went down the minute they opened the door and smelled the place!

If you're considering putting your house on the market, consider having a friend or neighbor give you an honest assessment of what they smell when they first walk in the house. This can be a delicate area so make sure they know they have your permission to be brutally honest!

And, if your agent tells you there's an odor problem that needs to be dealt with, don't waste any time in dealing with it. There's a house down the street that smells just fine and is also for sale!

The real answer to that question is, of course, that no one knows. There are some positive signs out there, but it's too soon to say if they're a trend or a blip.

But based on a current client situation, I'd have to say it hasn't happened yet.

I'm working with a buyer client who's also a licensed agent in a neighboring jurisdiction. This client is buying a home with other family members and there's a lot of nervousness about the future of property values in this area.

Here's the thing. This is a licensed agent. Agents get that this is cyclical. They get that if you're planning on staying in your home for many years (which is the case here) you're highly unlikely to lose any money. And, yet... there's a tremendous amount of concern.

We'll know the market has turned around when the agents aren't worried about buying!

This proves it's easier to be dispassionate about any market when it's not your money involved!

If you've been reading this blog lately you know that I've been writing reviews of homes and adding photographs at FranklyMLS.com.

It's been a great experience and it's been educational. I've never noticed exactly how much differently I look at a house when I put on my buyer's agent hat. But I'm very aware of that now.

Earlier this week, however, an issue came up and I think it's worth talking about. I reviewed a house that's been listed for sale. It had no interior photos and so I took those, as well as additional exterior photos.

These photos got me in trouble:

In my comments I said there appears to be a mold issue here.

The agent strenuously (VERY STRENUOUSLY) objected to both my mention of the world mold and my taking photographs and posting them.

One of her arguments was that I am not an expert on mold. That is entirely true. I'm also not a doctor, but if I see a bone sticking through your skin I'm going to tell you it's broken, even if I'm not allowed to diagnose!

She had someone interested in the house and they saw the photos and the comments and changed their mind. (Again, what are they doing calling the listing agent?!)

What I'd tell a potential buyer is that there appears there may be a mold issue here. We'll need to get the home inspector to take a closer look at this. From what we see here we can't tell what kind of mold, whether it's dead or alive, active or inactive. There are many, many kinds of mold, many of them not harmful to humans. If you truly love a house, this shouldn't be enough of a reason to make you automatically walk away.

As with pretty much any problem in a house, there's a fix. The question in each instance is: is the fix worth the time and/or money involved.

By the way, the offensive photos and comments have been removed. I have mixed feelings about that and I'll take that up in a future post.

Meanwhile, I'm off on vacation! This space will be quiet for the next week and a half. I hope you'll have having as much fun as I am!