It's been a strange week.

I keep getting extreme gratitude from people for doing my job!

A woman thanked me for showing her a rental. The other agents she'd talked to hadn't wanted to show her what she wanted to see! And, she was unsure about renting vs. buying and they didn't want to have that conversation either, except to tell her it's a great time to buy.

I've gotten thanked repeatedly for returning phone calls and e-mails promptly.

I got thanked by a seller for letting him know I thought we should lower the price on his listing.

I got thanked by someone in our office for turning in paperwork properly filled out, in a timely fashion and in the right format.

In short, I'm being thanked repeatedly for just doing my job!

To which, I can only reply... thank you to all of my competition. Apparently you're all making me look good!

Robert Bruner, the Dean of Darden School of Business at UVA has a blog that I often find interesting. His latest entry is based on a quote by the famed investor Bernard Baruch "If you have made a mistake, cut your losses as quickly as possible."

He talks about the difficulties of doing that in the business world, specifically using the AOL/Time Warner merger as an example. But one of the points he makes about why it's so difficult seems applicable in real estate as well.

He talks about "sunk cost" thinking. In other words, a seller says "I bought this place for $400,000. I'm not selling it for less than that."

The problem becomes that if you really do need to sell there's no guarantee you can hold out long enough for prices to go back up, or even to stabilize. If you're a seller who's moved on and you're paying two mortgages, how long can you continue doing that?

If you refuse to lower the price or let an offer get away for $10,000 difference, what happens when it's still on the market six months from now and you've paid that much more out in mortgage payments and prices have continued to fall?

Sometimes, cutting your losses is the best advice, in business and in real estate!

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 official June numbers have been released for this area of Virginia. Let's take a look, by county, at what they have to tell us.

First, Culpeper County. Compared to a year ago, inventory is down (732 now vs. 784 then). New contracts written have jumped (61 now vs. 47 then) and we see the same thing with solds (57 vs, 31). It's all good news! The only thing we see that isn't positive is that we're still adding new listings at a faster clip than I'd like. There were 130 new listings in June, compared to 113 a year ago. Still, when you look at year over year numbers, this is some of the best news we've seen in awhile.

Fauquier county presents a more mixed picture. The great news is Fauquier is inventory. A year ago we were looking at 865 homes on the market. Now we're down to 753. That's a 13% reduction in inventory. Good news! And the trend seems likely to continue. There were 128 new listings this month compared to 171 a year ago. The mixed part is the number of contracts and sales. There were 61 new contracts written this month compared to 65 a year ago. And 67 homes sold compared to 65 a year ago. Those aren't terrible numbers, but they're not telling as good a story as the other numbers.

Prince William County is where things are really hopping! This is the best news of any jurisidiction. And it follows the nationwide trend of this housing recovery happening closer to urban centers. Inventory is down from a year ago (5501 vs. 5703). But look at the contracts written and the number of solds! 987 new contracts were written in June. Compare that to last June when there were only 454. That's an increase of over 100%. And the solds tell a similar story. The numbers in June were 834 vs. 456 a year ago. The number of new listings is also decreasing 1448 now vs. 1539 in 2007. There's not a spec of bad news to be found in Prince William! Anecdotal evidence supports this. There are numerous examples of not only quick sales, but multiple offers on the most attractively priced properties.

Rappahannock remains in its own little world! Inventory is up from 79 to 85. New listings are almost identical to a year ago (17 now, 16 then). New contracts are down from 7 a year ago to 4 now.  Solds are exactly the same at 4. In other words things remain much the same in Rappahannock County.

This is the most positive report I've seen in a long time. There's no way to look at these numbers and not be optimistic.  I'm going to go out on a limb here and say that in Prince William County they may have seen the bottom. We won't know for sure until at least 6 months from now, but it's possible.

By the way, if you're a seller that doesn't mean you can raise your price! The properties priced CORRECTLY FOR THE MARKET are selling. There are still plenty of them sitting there!

I saw this article on Friday, but I hate to go into the weekend on a bad news note! So, I saved it for Monday! Just what you needed, right?!

There are still buyers out there. There will always be buyers out there!

The pool is small and you're going to have to knock yourself out to get them to your house. And, if they're not coming to your house, it's over priced!

And, this article from the New York Times will probably interest buyers and sellers. The numbers here are national. (Our local numbers are worse.) But I think the letter to sellers is a good idea. Sellers, given the inventory in Culpeper, Rappahannock, Fauquier and Warren counties, I don't think I'd try the letter to the buyer. They really do have all the cards right now!

One of the things I enjoy most about blogging is the interaction with readers. Whether it's your comments or your questions, I enjoy hearing what's on your mind. I thought I'd take a little time today to respond to some of what you've been saying.

Someone used the Meebo functionality on the right side of the page to chat with me about Fauquier County tax assessments. The question was has the county delayed the assessments so as not to take a revenue from the reduced values of area homes.

According to the County Commissioner of Revenue's office, the assessments have been done every four years, for at least the last 20 years. Prior to that assessments were done every six years. So it appears there's no change in policy at this time. The next assessments would be done in 2009 with the new rates to go into effect in 2010. The problem with that, of course, is that current values are no where near current assessments. There's a case to be made for appealing your current assessment.

"Sarah" recently reminded me that while the decline in home prices is bad for sellers, it's a great thing for buyers. That's very true. In every market there are winners and losers.

To be honest, I probably feel the sellers pain now more than I felt the buyers pain when they were desperately trying to buy a house and were one of 20 offers (or more)! The truth is I wasn't worried about them being thrown out on the street. I did worry that some of them were taking out mortgages that weren't in their best interest, but I was usually told that they knew what they were doing. These days, some of the sellers I work with are in very serious difficulty and I do worry about them!

So, if as a potential buyer you don't feel I'm sufficiently celebrating your ability to buy a house at a more affordable price, never fear! Prices actually still need to come down more. I'll do a post next week on affordability in our area. But I rejoice for every buyer who gets a great deal on the home they want!

And for my fellow agents who read this and keep me honest, thanks!

Keep those comments coming!

People talk to me all the time about real estate. Obviously customer and clients do that. But people who barely know me but know I'm an agent also do that. That's a good thing! I like hearing what's on people's minds and how they're seeing the current market.

Lately I've been hearing some things that don't quite ring true. So I thought I'd set the record straight.

First of all there's the current chart topper "I know that a bank will take any offer just to get rid of a foreclosure." It's a lovely thought, but just not true. In fact, there is quite a range of policy on this among the various lenders. While, in theory, no bank wants to hold a property a day longer than they have to, each lender has its own policy as to what's an acceptable offer. That may be a percentage below the listing price or it may be based on a percentage loss they are willing to absorb. It may be a combination of factors, including how long the property has been on the market.

Unfortunately, no one hard and fast rule covers this. But be assured, I've seen banks reject lowball offers, even perfectly reasonable ones!

Here's what sellers tell me a lot these days. "I know you're probably right about the price, but I just want to try it at this higher price for a little while."

Here's the problem. Prices are declining. So, while you're sitting on an overpriced listing that no one comes to see, prices have gone down further. Now, just to catch up to the market, you need to come down further in price than where I originally suggested. All you've done is reduce your likely profit.

And, of course, real estate agents have their own misconceptions. The one you'll hear most often these days is "It's a great time to buy a house." One agent last week told me he's never stopped saying that! I'm guessing his clients who listened to him a year or two ago may not be thanking him now!

It's a great time to buy a house if you're likely to stay in it at least five years. Given current market conditions and where I think we're going, I still won't guarantee anybody will make money in five years. But I think, if you include the tax advantages, you have an excellent chance of breaking even or even a little better.

If you're likely to get transferred in a year or two, it is clearly not a good time to buy! If you're looking to flip a house for a quick profit it is definitely a very bad time to buy! If you're looking for a long term investment, say a rental income property, it's a very good time to buy.

And, as always, what you buy and where you buy make a huge difference!

I walk talking to a colleague a couple of days ago about how the lower end of the market is where all the deals are being done right now. A house under $300K has a significantly better chance of selling than anything above it does. (Of the 41 houses sold in April in Fauquier County, half were below $300K. Another 10 were between $300K and $400K.)

She said that's good, because then the people who sold those houses will move up and so on and so forth. That's how the cycle works. And, I agreed initially. But as we discussed it further it occurred to me that the cycle seems to be broken right now.

There are still quite a few first time home buyers out there, and, an increasing number of investors. Typically the houses they buy are starter homes and then the sellers of those home move up the rung to a larger home.

But almost every home I show these days is empty. And, a large number of them are bank owned or on their way there. There are no owners living in those homes to move up to the next level of home ownership. They've already left and, in most cases, it was to go back to renting.

There are some empty homes where the owners got transferred and are gone because they're buying another home in another community. But a lot of the sales of starter homes are not producing the normal "move up" buyer that we usually see.

Today I'm going to talk about March's numbers for Fauquier county.

There is very little difference between the numbers in February and March. The total number of properties for sale in February was 730 and at the end of March we showed 734 available properties. That, actually, is good news. Many other counties continue to show substantial increases in that metric. 140 new listings were added this month as opposed to 153 in February. Again, at least it's moving in the right direction. There were 56 contracts written this month and only 44 in February. This is the biggest change in the month over month numbers. The number of houses sold last month rose from 32 in February to 35 in March. Not a huge difference, but an improvement.

Again, I think it's much more telling to look at year over year numbers.

Unlike Culpeper County we have not seen an explosion in inventory over last year, although we are up. That 734 homes for sale number is slightly higher than 723. We see a lot less homes coming on the market 212 last year as opposed to 140 this year. Unfortunately, that's where the good news ends. The number of new contracts written has fallen almost in half, 94 a year ago down to only 56 now. The same story applies to closed sales. In March of 2007 there were 62 closed sales. In March of 2008 only 35.

Year over year it's hard to see any signs that this market is turning around. The flatter inventory numbers do give me some hope,  however.

Prices continue to drop. The average sales price in Fauquier county a year ago was $368,565. The average sales price now is $318,249. That's a 15% drop in one year. That's significant. There's no sign that prices are stabilizing either.

We're not seeing an increase in new construction listings. And, new construction sales are almost non-existent. There was 1 last month.

Overall, there's not much here to raise your hopes if you're a seller. But there is lots of continued good news for the buyers!

I'm a little late getting March's numbers out to you all. Blame the IRS! But now that taxes are done, it's time to dive into the numbers and take a look. I haven't done individual posts by county for awhile so I'll be doing that over the course of the next few days.

Today it's Culpeper.

The biggest difference between February and March is the number of new listings coming on the market. Last month there were 206 new listings. This month there were only 142 new listings. That would seem to be helpful to the total amount of inventory on the market but there's only a slight difference (February: 819, March: 802). The other notable difference is the number of sales which increased from 31 in February to 42 in March.

Those numbers are interesting, but the more interesting comparison is with what happened a year ago. Remember, real estate is very seasonal. Spring markets are very different from fall or winter markets. The best comparison is almost always year over year changes.

In March of 2007, a year ago, the total inventory was only 643, as opposed to the 802 we've got now. The number of new listing taken were 145, almost identical to the number in March of 2008, 142. The number of new contracts was also very similar, 54 last year, 53 this year. The biggest difference is the number of closed sales. That number was 52 in March of 2007 and 42 in March of 2008.

Year over year it's hard to see any signs that this market is turning around.

Prices continue to drop. Average sales price in Culpeper county a year ago was $328,013. The average sales price now is $288,017. That's a 12% drop in one year. That's significant. There's no sign that prices are stabilizing either.

One statistic that surprised me is that the total number of new construction listings are up. As more and more builders have slowed or stopped building, I expected a reduction in new construction listings. But a year ago there were 224 new construction properties listed and now there are 263.

But perhaps even more surprising is the number of new construction sales. 12 sold in March of 2007 and only 4 in 2008. Considering the terrific deals most builders are providing, that's surprising. If you're ever going to buy new construction, the deals out there right now may make this the time.

Overall, there's not much here to raise your hopes if you're a seller. Lots of continued good news for the buyers!

Congress is working on its plan to stimulate the real estate market. But no one ever said the wheels of government turn with alacrity! And, I've never been any good at all at waiting!

So, here's my own little real estate stimulus plan!

If you're looking to buy a home, I'm offering a buyer's rebate program that's good for any ratified contracts between now and May 31st.

In addition, all buyers will receive a free home warranty.

If you're planning on selling your home, and you list with me between now and May 31st, I will pay for a home staging consultation and a home warranty.

If you'd like more information on either of these programs, give me a call at 800-851-1563 or e-mail me at Julie@JulieEmery.com

We're seeing a few more FHA mortgages this year. They had fallen out of favor during the boom years. And, for buyers it's a great thing that they're back.

The benefits to buyers are a reduced requirement for down payment (3%), lower loan costs, easier qualification and, some additional home inspection protection.

There are some down sides if you're a seller, however.

The big one is the FHA appraisal. This is not your standard appraisal where the appraiser is looking at the market value of the home. It is that; but it is also another home inspection. A transaction can sail right through the home inspection contingency with no issues. Then the FHA appraiser looks at the house and decide that there's a problem that MUST BE FIXED before settlement can occur.

Unlike with the normal home inspection, this is not a negotiation. If the seller finds himeself unwilling or unable to complete these repairs, the deal is usually dead.

The home inspector may have thought the roof was in perfectly good condition. The FHA appraiser can decide that the roof needs to be replaced.

If you're the buyer, this can be terrific. The FHA is trying to prevent you from having to buy a new roof shortly after you've bought a home.

If you're the seller, you may not be as thrilled.

The other, much smaller issue, is that there are some fees associated with a settlement that the FHA will not allow a buyer to pay. Typically these are small amounts and I've never seen this jeapordize a transaction.

You can see why, when houses sold like hot cakes, it was hard for anyone to buy a home with an FHA mortgage. If there are several offers, I'd likely advise my seller client to choose the non-FHA offer.

Still, in this market, if the only offer you've got is one with an FHA mortgage, I'd say grab it and keep your fingers crossed!

In the comments on a recent blog someone asked why someone who pays cash has more negotiating leverage. I answered briefly in response, but thought it made sense to cover it in more detail in a blog post.

There are several reasons you're in a stronger negotiating position if you're buying with cash.

First of all, many deals never make it to closing. Even when there's a ratified contract, that's no guarantee that the deal settles. And, over 95% of the time, deals that fall apart do so because of issues related to the buyer's financing.

If you can remove that concern for the sellers, they are likely to take a lower offer, trading price for the certainty of a closed sale.

Another factor is time. Typically right now it's about 30 days in most cases from ratified contract to settlement. The majority of that time is spent on items required by the lender. Some of those things include getting a survey, having the property appraised, verifying credit and employment for the buyers and sending the deal through underwriting. It's possible, these days, for most lenders to close much faster, say in two weeks. But in most cases if they buyers are getting a mortgage the settlement date is probably about 30 days out.

With cash, on the other hand, settlement can happen as quickly as the buyer wants. I've seen cash settlements in less than 48 hours. Mind you, I wouldn't recommend that. I think the buyer should still do a title search and a home inspection at the very least. But it does happen.

Most sellers prefer money in their pocket sooner rather than later!

And, lastly, along with buyers getting a mortgage come several related contingencies. Contracts that involve a lender typically include a contingency to make sure that the buyer can actually qualify for a mortgage. (Certainly not a sure thing these days!) There's an appraisal contingency. If the property doesn't appraise for at least the sales price, the deal may be dead. And, depending on the type of financing, there may be other contingencies and/or conditions that make a timely settlement more uncertain.

All in all, if I'm selling, I'll give a little on the price to get a cash buyer!

Last night I attended the Tranzon auction in Fairfax. Since most of you will probably never attend one, but many of you are probably interested, I thought I'd give you a report.

There were originally 19 auction lots to be sold. (Auction lots as opposed to parcels of land.) Ten of those 19 lots were from our area. They also had a half dozen DC properties and some land parcels in Clifton and Chantilly. I believe the proportion of local properties is representative of how much tougher the real estate market is as you move further away from DC.

Four of those 19 properties were pre-sold prior to the auction. In addition, one of the lots was three Culpeper townhouses. Two of those were pre-sold as well.

It was interesting that not one of the parcels of land met the reserve price. There were bids. But the seller had set a minimum price at which they'd accept an offer and none of the bids on any land parcel met that reserve. Land prices are always less elastic than residential homes and this confirmed that. And, since many of the bidders on land were builders, it's pretty clear that they're being very cautious right now. (If they weren't they'd be bankrupt, not bidding at auctions!)

I was at the auction with a buyer client so I had that hat on. So, I'll give my impressions from the buyer side first.

While the auction prices on some of these properties were attractive, there were no "steals" here. The ultimate sale prices overall were not far off current market prices. That tells me the people in that room had done their homework and weren't going to overbid. It also tells me that the heat of a bidding competition got some of them to bid a bit more than they really wanted to.

It was a cautious crowd overall. (And a large crowd.) For example, on the first property of the evening, a large colonial in Manassas on a 1.18 acre lot, the auctioneer tried to start the bidding at $700,000. He ultimately had to go down to $400K to get the first bid. The final sale price was $530K.

I was also struck by some of the comments by Tranzon, both the auctioneer and the gentleman providing the descriptions of each property. Comments like "You know this is going to be worth $350K in a year or two" and "The value on this can only go up" were shocking to this REALTOR who has been trained to never misrepresent value. And, the interesting thing is that I think those kind of statements were actually counterproductive. You could hear some of the scoffing after these comments as the potential buyers seemed to be reminded of the current state of the local real estate market and the folly of such predictions.

From a seller's perspective, this is not an unattractive way to sell a home. None of the residential properties failed to meet the reserve price. They all certainly sold faster than they would have under normal circumstances. And, I don't believe there was a significant decrease in the net in the seller's pocket. Remember that all of these properties are sold as-is with no inspections, appraisals, etc. And, settlement must take place within 30 days. I wouldn't hesitate to help a seller use an auction to sell their property. In this market, it's probably a method more sellers and their agents should seriously consider.

It was a very educational evening. If you're interested in more information on either buying or selling at an auction, let me know and I'd be happy to help!

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!

Effective today the methodology for determining how many days a property has been for sale is changing in the local Multiple Listing Service.

The indicator that is changing is something known as Days on Market Property and basically tells you how long the property has been listed for sale, Even if the sellers have changed agents or changed something about the listing, it still shows you the cumulative days on the market.

The rule has been that in order for that number to reset to zero, the property must be off the market for 180 days, essentially six months. If it is relisted after that time the counter starts again at zero. If it's relisted before that 180 days, the counter picks up where it left off. So, if you had your house for sale for 100 days, then took it off the market for two months to make some renovations and relisted it, on the first day it's back on the market it shows it's been listed for 101 days.

The new policy decreases that waiting time from 180 days to 90 days.

The rationale is that the market has changed, houses turn over more often and that the 180 days didn't accurately reflect the market. At least that's the story from the MLS.

In actuality it's motivated by unhappy sellers and their unhappy agents. Let's face it, a house that looks like it's brand new on the market is going to get more attention than a house that's already been listed for four months, or two years! And, when an offer is written, how long it's been for sale is one factor a buyer may want to consider in their offer.

Buyers are definitely the ones on the short end of this stick. The real estate agents who represent buyers can still get the information on how long the house has been for sale. But they're going to have to go that extra mile and do the research. Some of them simply won't bother. And, it becomes close to impossible for the consumer to get this information.

It seems like a short-sighted change that's been made for all the wrong reasons. Changing this kind of data point to deal with market fluctuations just doesn't seem smart. So, while they've no doubt made some sellers a little happier, I doubt they've done anyone any good in the long term.