Since buyers seem to be coming out of the woodwork these last few weeks, it seems like a good time to talk about that important moment when you've found the right house, wrote a great offer and now wait in suspended animation for something to happen!

So, what, exactly happens after you wave your good-byes to the real estate agent and walk out of their office? Here's how things typically proceed in our area.

First of all, in addition to the offer, you'll have written a check made out to the broker who is representing you. That check is called an earnest money deposit. That check stays with your agent until you have a ratified contract. At that point it will get deposited in an escrow account where it will remain at settlement.

Now the agent will fax or e-mail the offer to the listing agent. Your agent will then follow up by phone to make sure tha that the offer arrived and to find out when the offer will be presented to the sellers.

Since the offer states that "time is of the essence" the offer should be presented as soon as reasonably possible. Within 24 hours is usually workable. There may be special circumstances, especially now, with so many sellers having already vacated their homes. And, in some instances the presenting of the offer will take place via phone, fax and/or e-mail.

The sellers will decide to either accept your offer, counter your offer, or reject your offer. Let's assume they may want to sleep on it, but typically, you should have an answer within 24 to 48 hours.

If they accept your offer, then you're going to begin the process of executing that contract, proceeding to loan application, inspections, etc.

If they counter your offer the ball is back in your court again and you need to decide how to respond. Again, remember that "time is of the essence". It makes sense to have thought through likely counter offers when you write the original offer so that you can be prepared to make some quick decisions.

If they reject your offer, in my opinion, in this market, they don't really want to sell their home and shouldn't have it on the market. No matter how bad an offer is right now, sensible sellers will counter it. It's hard to negotiate without an offer on the table! And, no offer means no sale!

If they reject your offer with absolutely no negotiation you should keep looking!

Ultimately, hopefully, you end up with a ratified contract. A contract is ratified when every party to the contract has agreed to every provision, including all changes. At that point all the "i's" are dotted and the "t's" are crossed.  It's now a legally binding document! Congratulations!

I heard a story on NPR this morning about landlords in New England who, in the face of high heating costs this winter, have elected to just stop paying for oil for their tenants. It's a terrible situation. But it did make me think that this time of year, the cold weather is a good reminder about the importance of insulation in our homes.

If you haven't added or upgraded your insulation in a long time, it's a good time to think about it. It can be one of the smartest investments you make in a home.

Insulation's effectiveness is measured with an indicator called "R Value". The R value measures the insulation's ability to resist heat traveling through it. Insulation is most useful in helping keep hit in your home during the winter months, but can also help reduce air condition bills in the summer.

Energy Star has a nice table that tells what the R value recommendation is by state and by type of heating system. For Virginia, if you're using gas/oil or heat pump they recommend R38. If you're using electric resistance, they recommend R49.

Insulation can break down and lose its effectiveness over time. So it makes sense to have a professional take a look and let you know what you have and what condition it's in.

Attic/ceiling insulation is where you should start. It's the most cost effective. Walls can be more problematic and we'll talk in more detail about that in another post.

Stay warm!

A CMA is a Comparable Market Analysis. I've also seen it called Competitive Market Analysis. Regardless of how you define it, it's purpose is to give a potential seller an idea about what their home will sell for.

Many real estate agents routinely offer to do a free CMA as a way of getting their foot in the door with a potential client. And, a CMA can be a very valuable tool for the seller. But I don't believe most sellers have enough information to accurately determine if what they're looking at makes sense.

You've probably heard the quote about "lies, damned lies, and statistics".  Well, then there are CMAs.

I can get a CMA to say just about anything I want it to. But a proper CMA, while not an actual appraisal, should take into account the methods an appraiser will use when choosing which homes to use as comparisons for yours.

First of all, if you live in a good sized subdivision and there have been recent sales, that's what will be used. It doesn't matter if you think the people down the road don't have as nice a house. The rules that appraisers follow will almost guarantee that the most important comparables he or she will look at will be in the subdivision where you live.

And, they're only going to look at recent sales. In this market, if it sold more than six months ago it's insane to consider it as a guide to pricing your home. No appraiser worth their salt will use it. Prices in this market may have stabilized. But there's also a pretty good chance they're still dropping.  The more current comparables you have, the better.

The comparables used should be as close to your home as possible in terms of age, style, number of rooms, garage, lot size, etc. Think apples to apples!

And the comparables should be focused on what has sold, not what's active. It doesn't matter what someone asks for their house. It only matters what they can actually sell it for!

CMAs can be manipulated to pull the data that supports the price a seller wants. And there are plenty of agents who want or need business badly enough to tell a seller what they want to hear. That's a disservice to everyone in the long run!

So push back and ask the hard questions when you look at the numbers. If you think those numbers look too good to be true, you're probably right!

There's a new company out there called Real Estate Equity Exchange that will help you pull equity out of your home without all the downside of taking on more debt or having to make payments. Or, at least that's what they advertise!

They will give you cash representing up to 15% of the value of your home. In exchange for this cash you give them up to 52.5% of the capital appreciation when you sell your home. In addition, you pay a service charge of $15,000 when you sell the house.

This does not seem like a good deal to me. That seems like potentially a lot of equity to give up for what you get.

This is likely to be most attractive to older owners who would otherwise be looking at a reverse mortgage. The reverse mortgage carries a service charge of $17,000 and current interest rates are somewhere around 6.5%.

The company says one of the reasons that it doesn't sound as attractive is that they are sharing the risk with the homeowner. So, if there's very little appreciation in your home, they make very little money.

While I'm skeptical of this deal it's apparently a big hit in the investment community with people lined up to throw money at the company and invest in these mortgages.

One thing is for sure, the financial options available to consumers are growing increasingly complex and "buyer beware" is definitely a good principle to apply. If you're contemplating any reverse mortgage or utilizing this new offering, make sure you do your homework! AARP has some good information on reverse mortgages. And you'll find some resources on this topic on my web site as well.

If you're unsure, don't hesitate to seek professional guidance from someone who isn't trying to sell you something!

When someone finds a home they want to buy, but hasn't yet sold theirs, they will sometimes submit an offer with a home sale contingency clause. What this says is that they will buy the home after their home is sold. It provides a number of days in which the home must sell as well as the number of days before it will be on the market. It also contains a "kickout clause" stating that if another offer comes in they will have a defined period of time to remove that contingency or lose the contract on the house.

A contract with a home sale contingency is fairly unattractive to most sellers these days. For one thing, they know the market has been slower. It is likely to take the prospective buyer longer to sell their home as well. And, during that period, their home is less visible to other potential buyers who may not have a home to sell.

Now that should not be the case. But the world doesn't always work the way it should! There are quite a few agents who won't even show listings that are under contract with a home sale contingency, even though there is a kickout clause and they could get the house. There will always be agents looking to simplify their jobs and in their minds they see no reason to show these homes when there are plenty of homes out there without any kind of contract on them.

But that's not really what I wanted to share with you today! I recently received an offer on one of my listings with a home sale contingency. My sellers were willing to consider it except for one fatal flaw in the offer. The home offer was contingent on the sale of a home that the prospective buyers didn't own. This would seem to not require explanation, but you can not contractually commit to sell a home you don't own!

The defense by the agent who wrote the offer was that the home was owned by the parents of the wife. Again, it doesn't matter who owns the house! If the buyers don't, they can't legally agree that someone else has to sell their house!

Now there are legitimate ways in which this situation could have been handled. You could add the parents as parties to the contract to purchase the next home. Or, you could attach a notarized letter from the owner of the home saying that they were selling and that the proceeds would be available as a downpayment on the home that the buyers were purchasing. In that situation I'd also want to see a letter from the lender that they were aware of where the funds were coming from.

So, if you're living in a house owned by Mom & Dad and they're willing to sell it and give you the proceeds to buy a home of your own, just be aware of the extra steps that will be necessary from a paperwork perspective. And, if you have an agent who doesn't understand that you can't commit to selling someone else's home you may want to rethink how qualified they are to help with this purchase!

I've turned down a couple of listings in the last two weeks. Understand that no real estate agent wants to turn down a listing and the potential for a commission! It's never something I do lightly.

But there are still sellers out there who are reluctant to accept current market conditions.  And, I understand where they're coming from.  I've heard "I need to get more money than that so I can buy what I want." The sad answer is that buyers could care less what you want. When you go shopping for your next home, you won't care a fig about the sellers predicament except insofar as that improves your negotating position. It's true for the potential buyers of your home as well.

A couple of sellers have properties that they bought as investments at the tail end of the red hot market. They tell me they will actually lose money now if they sell at the price I tell them they can get. And, again, they're right. And, again, buyers just don't care. I had to tell one seller today that I believe it will be several years before they're able to sell their property for a high enough price that they'll have a gain on the sale.

I've also had a seller whose home needed significant cosmetic improvement. They told me that they had no money with which to make those improvements. Again, I understand a cash crunch!  I've had plenty of them myself. But the truth is that what is selling right now are homes in excellent condition that are priced very aggressively. If you're not going to do what's necessary to make your home shine and you're also completely unwilling to lower the price to what the market will bear, there's really no way for me to help you.

And, I want to help you! I'm working with plenty of sellers where we're partners at beating a tough market. Even on the worst days I still feel good about how we're pursuing their goals.

Another agent this week said she's very frustrated that she's lost several listings this year to agents who promised the sellers a much higher sales price than they could possibly obtain. And that's tough! You know that the home will sell for that. In fact, I had one seller tell me they suspected they were being bamboozled. But hope springs eternal! I understand how hard it is to go with who you feel is the best agent when there's someone else who is absolutely sure they can get you more money! I'd just say, be wary. You know what they say about if it sounds too good to be true! There are plenty of agents who will tell you what you want to hear and are banking on getting you to lower the price to a more reasonable number down the road.

The latest numbers show that inventory is no longer decreasing locally. That means prices will continue to fall. But that's the subject of my next blog entry! So for now, just keep in mind that it's a tough market out there and you need to price your home aggressively and make sure it's in top condition!

For more tips for sellers, see my web site at http://www.JulieEmery.com

There are a lot of real estate agents and real estate companies working to convince buyers that it's a good time to buy.  And the thing is, I absolutely believe they're right!  But it's easy to say when it's not your money on the line, right?!

So, I'm going to put some skin in the game, so to speak!

Here is my guarantee to you, the buyer.

If you purchase your house with me as your agent, own the house for at least three years, and sell the home with me as your agent...

if you do not net at least the original purchase price of the house and the broker commission, I will work for free to sell your home!

The only caveats are that the house must be in substantially the same or better condition as when you bought it.  (i.e., if it burns down I'm not working for free to sell your pile of ashes!) And, I must still be a licensed REALTOR in the state of Virginia.  If I retire 20 years from now and move out of state I won't be moving back and getting my license just for you! (Although I'll be happy to help you find the right agent!)

It is a good time to buy!  And I'm putting my money where my mouth is! Call me and let's talk about helping you find that next house!