The on again, off again, opportunity to use the $8000 tax credit as a down payment is back on again. At least if you get a VHDA loan.

The guidelines for the program are here. The program utilizes a second mortgage to make this happen. That second mortgage requires no mortgage payments for the first year and has a 0% interest rate during that year. You have multiple options on how to deal with the second mortgage after that first year.

It's worth taking a look at this program if the only thing keeping you from owning a home is coming up with a down payment.

If you need help finding a VHDA lender, let me know. I'd be happy to help!

Governor Kaine announced the Virginia recipients of the Neighborhood Stabilization fund grants yesterday. Unfortunately, neither Fauquier or Culpeper made the cut. Incredibly, Prince William county doesn't appear to have gotten a dime!

This would have had a small impact, but every little bit helps.

There was a little money given to Shenandoah, Frederick and Warren counties, $2.5 million for all three combined.

I'm not sure you could argue they are harder hit than places like Culpeper. In fact, I'd make a pretty good argument against that.

CLARIFICATION/CORRECTION:

It appears Prince William got funds as part of an earlier $7 million award, along with Fairfax county.

The original announcement said there was $20 million available for the Open Submission portion of the program and another $10 million available for the Competitive Program. Between the $17.5 announced yesterday and the earlier $7 million awards, there should be another roughly $5 million available. So there may yet be funds available for Fauquier and Culpeper.

The compensation system in real estate is, in my opinion, broken. There are many reasons the way the system has worked for so long doesn't seem feasible any more. But I want to talk about just one aspect today.

Buyer's agents in Virginia (and every other state) get paid based on what is listed in the MLS as the "coop fee" or the fee to the cooperating broker. In most cases, that fee is half of what the listing agent has negotiated as the fee for listing the house.

There is endless debate in the online real estate community over whether or not the seller is, then, in effect, paying the buyer's agent. After all, the listing agent is asking the seller for the X percent and then splitting it. Nowhere does the buyer's agent get asked to come up with this money to pay their own agent. The other side of this debate is that the buyer is paying for the house and that out of those proceeds come the fee for the buyer's agent and so, in the end, they are paying for their agent. I won't come down on one side or the other of this argument. Suffice it to say I think the fact that it's unclear who's paying the buyer's agent is a bad thing!

I think it's a horrendous thing, however, that the buyers agent's compensation is based on the sales price. That means that by negotiating the best deal possible for my buyers, I essentially hurt my own earnings. This is a very basic conflict of interest. It makes no sense that in a huge financial transaction, most buyers are represented by someone who has a conflict of interest!

The origin of this system dates back to when all agents represented the interests of the seller. Back then, even if I never met the seller and if I spent all my time working with you the buyer to help you purchase this home, I was still legally representing the seller's interests. So, it made perfect sense to compensate me based on how much the seller got for his house.

They did finally create buyer agency, but compensation has never caught up with that change.

The argument from agents is often that the amount of compensation difference between getting my buyer that house for $300,000 or $295,000 is so small, typically less than a couple hundred dollars, that it in no way influences my behavior.

And, I agree that in many cases, perhaps even in most cases, that's true.

The problem is the appearance of impropriety. The problem is that the buyer shouldn't have to wonder whether or not you're influenced by that difference. The problem is that it tarnishes the reputation of good agents. And, finally, the problem is that it makes the whole industry look shady.

It's time to fix this. I've got some ideas on how compensation could change. And, there are plenty floating around on the internet. But I'd rather hear your input. How should compensation work for a buyer's agent? What model would allow for a sustainable business on the part of the agent and no conflict of interest?

I look forward to hearing your solutions!

My friend (and fellow VLA alumni), Jim Duncan, announced his move to Nest Realty Group this week. It's a new firm in Charlottesville that will NOT practice dual agency.

Jim's latest video blog talks about why he's making this move, how hard it is to kill this outdated practice and what he's hoping consumers will see.

I'm honored to know Jim and applaud him for having the courage of his convictions.

It's long past time to kill dual agency once and for all! The only ones benefiting from this practice are real estate agents. Consumers and the agents who get this will have to work together to end this practice!

It seems incredible that at a time when this profession gets more complex each day, the Virginia Senate thinks once you've been a broker for 15 years you no longer need to learn anything new.

But I've ranted about the lack of educational expectations in the industry before. I'll let my friend and colleague, Jim Duncan, in Charlottesville state the case this time around.

For the record, though, this is an idiotic idea. The only thing more idiotic is that it passed unanimously. Is there something in the water in Richmond?

The Virginia Association of REALTORS has founded an organization dedicated to protecting the interests of Virginia homeowners. It's called the Virginia Homeowner's Alliance. Their web site provides a place to get information on how to improve the value of your home, lets you monitor what's going on in various government entities that may impact you as a homeowner, and will also provide you with an easy way to contact government about your concerns.

With the flood of paid lobbyists at all levels of government this seems like a terrific idea. Citizens come together to make their voices heard. It's one of the things the internet does best.

Once you go to the site and sign up you will not be flooded with a ton of spam! But you will have access to information that I think will be useful to you. In addition to giving you a voice in governement, it also provides useful information on neighborhoods and schools and practical information on things like lawn care. By the way, the site is relatively new. It will continue to grow and expand and your suggestions on how to do that are welcomed!

Now I have a favor to ask. If you do go to the site and register, it asks for the name of the REALTOR who referred you. I'd like to ask that you please enter my name. In the interests of full disclosure this enters me in a drawing for things like an iPOD or a Wii.

But I hope you do this for yourself! And I'll be interested to hear what you think of the site!

As you know by now, I like highlighting local Virginia businesses who are making a difference by their commitment to a greener, more sustainable way of operating.

JK Moving & Storage recently sent me their Commitment To Sustainability.

They're doing things like offering free used packing materials to their customers to reduce waste. They help with recycling your electronics. These visible efforts impacting their customers are great, but maybe more important are the things going on that you might never see.

They train staff on the importance of sustainability and how individuals can contribute at work and at home. Their vehicles use ultra low sulfur diesel to reduce emissions. They recycle batteries and anti-freeze. And, my favorite, they launched ReUse DC. It's a site where individuals and corporations can trade, sell and give away their unwanted furniture, household items and office equipment.

JK Moving & Storage had already turned me into a fan because of how they treat my customers. I'm an even bigger fan now!

If you'd like more information, check out their website or e-mail Clarke Mahek at cmahek@jkmoving.com or call him at 703-930-7275.

Effective on July 1st there are a number of changes to the rules governing homeowner's associations in the Commonwealth of Virginia. The previous laws were so vague that it had become the wild west in terms of fees to sellers requesting HOA packets and inspections. So a number of changes were made.

First of all, they created the Virginia Common Interest Community Board to investigate complaints about community association managers. They also require that associations now publish their fees for certificates or packets either in paper or electronic format.

It also has mandated the maximum fees for the following services:

Inspection: $100

Disclosure Packet Copies:

    Hard Copies: $150 for 2

    Electronic Copies: $125 for 2

Additional Hard Copy: $25

Expedite Fee: $50

Update Fee: $50 (For packets produced in last 12 mos.)

These should, first of all, let sellers know what to expect when they're calculating how much it will cost them to get the documentation needed to sell their home. And, while these fees are higher than were allowed under the previous law, many associations were completely ignoring those fees anyway. So the practical effect may be lower fees overall.

The Virginia Association of REALTORS took a leading role in getting this pushed through and I think they've done a great job. This will benefit consumers, and, in particular, real estate sellers in Virginia.

The April numbers are finalized.  I did a sneak preview for you about ten days ago, before the numbers were official. And, the picture hasn't changed much.

In every county, the pattern is the same. Inventory has risen again, as has the number of new listings. After a dismal month in terms of sales in March, April looks better, both in terms of new contracts written and sales closed. But the number of houses sold is not keeping pace with the new listings coming on the market.

Fauquier, Culpeper are each showing about 16 months of inventory. Warren is looking worse at 24 months. Prince William is in the best shape at only 9 months. Rappahannock, being a special place, has about 3 years worth of inventory. But, again, the numbers generally don't give a very realistic picture of Rappahannock.

The more interesting comparison, of course, is year over year. Since real estate is very seasonal, that's always true. In general, inventory is higher than it was a year ago and sales are slower. There are some exceptions, but it's too soon to say if those are a blip or a true change in market conditions.

No bottom in sight would be my reading of current conditions. There is nothing to suggest we've turned a corner. (Although I remain hopeful that I'm wrong!)

Last week, in the House of Representatives, they finally voted on the "Foreclosure Prevention Act of 2008". This bill is designed to help stem the tide of foreclosures. It would not only help people who are in danger of losing their homes, but also their neighbors who are tired of seeing the value of their own homes plummet.

It is very interesting to note that the counties hardest hit by the foreclosure crisis, not one of the representatives from Virginia voted to support this bill.

Representatives Cantor, Davis, Wolf and Wittman all voted no on this bill.

Let's be clear about what they voted against.

This bill would have allowed homeowners to stay in their homes, restructured their mortgage to reduce the amount owed to more accurately reflect actual values and guaranteed those loans through the FHA. It would have rewarded buyers of foreclosed properties with tax credits, thus helping all homeowners.

It's tough to see what could possibly have induced them to vote no. That's especially true when their Republican counterparts in other hard hit areas of the country crossed party lines to support the bill.

I know the argument about not wanting the people who were responsible to suffer to help those who were not. But NEWS FLASH: if you were very financially responsible and because of all the foreclosures in the area your home prices are plummeting you're still paying the price.

The question isn't whether those of us who were responsible pay for those who weren't. The question is do all of us want to preserve the value of our homes?

So, does party loyalty count more than constituent pain?

It appears some of what I've envisioned for Culpeper may be coming to pass. With new condos slated to be built downtown right across from the train depot and now another Amtrak train to and from DC potentially being added, I like the long term outlook for Culpeper!

Today, finally, I'll get around to talking about the numbers for Warren County.

Inventory in Warren County has stayed relatively stable month over month. There were 560 homes listed for sale in February and 567 in March. No significant difference there. Surprisingly enough, Warren County is the one county where there's very little difference year over year in this number. In March of 2007 there were 558 homes listed.

93 new listings came on the market in February. March was up slightly with 98. There's a significant difference in last year's numbers, however. In March of 2007 there were 161 new listings.

We do start to see some differences with contracts, month over month. In February there were 22 new contracts. In March that jumped up to 34. Of course, that's less impressive when you consider that a year ago there were 52 new contracts.

There were 24 closed sales in March, 22 in February and a year ago there were 39.

Overall, the patterns are similar to what we've seen in the other counties.

Prices in Warren County are down almost 17% year over year. It's worse than Fauquier, Culpeper or Rappahannock, but not as bad as Prince William.

Next week I promise an end to all these boring statistics for awhile!

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

First of all, a note to those of you who may be new to this blog or to Rappahannock County's real estate market. It is a much, much different market than the surrounding counties. The volumes are very small and so, in some ways, these numbers are less enlightening.

That said, inventory remains static in the county with 71 homes currently for sale. As with surrounding counties, inventory is up from a year ago, although not by a huge percentage. In March of 2007 there were 66 homes listed for sale. There were 11 new listings added this month as opposed to 13 in February.

The big new is that 3 sales closed in March. There have been several months in a row now where that number has been 1. So, percentage-wise, a huge increase! I wouldn't read it as a trend just yet, however! But it is good to note that there were also 2 new contracts written. Those numbers still don't look as good as last year's. In March of 2007 there were 5 closed sales and 3 new contracts written.

Prices continue to drop, even in Rappahannock County. The average sales price a year ago was $460,000. The average sales price now is $411,667. That's a 10% drop in one year. It's lower than the surrounding counties, but still not good news to sellers. A reminder to take average sales prices with a dose of salt for Rappahannock. With volumes so low and prices all over the map, this is a statistic that is often fatally flawed. But, year over year, right now, it looks reasonably accurate.

While new construction is a very small percentage of Rappahannock County real estate, it is noticeable that the new homes inventory has dropped over 50% over the last year. There were 10 a year ago and there are only 4 now.

In Rappahannock County,  much of the action is in land sales. There were three of those last month. In general, smaller parcels seem to be moving a little better recently.

The Rappahannock County real estate market remains steady, slow and not significantly different than a year ago. If you're a buyer looking in Rappahannock County things have rarely looked this good!

We're going to look at Prince William County statistics today.

Prince William is different than the other counties I look at here. Its numbers are better by far in almost every category. If you were only looking at Prince William you could be forgiven for thinking things had definitely turned around.

There are 5757 properties currently for sale. And, inventory is one of the few indicators that show the market headed in the wrong direction. Last month there were 5573 homes for sale. In March a year ago there were only 4527 homes available. 1631 new listings came on the market in March. Last month there were 1595. A year ago in March we saw 1764 new listings.

502 sales closed in March of this year. That's up 49% over last month! And, if we look a year ago, when 418 houses sold, we're up 20%. Again, year over year numbers are the more meaningful statistic.

Even better are the number of new contracts written. 820 new contracts were written in March of 2008 as opposed to 698 in February. That's a 17 percent jump. Again, I don't give that a lot of weight because things should be getting better. It's spring! But the really good news is that last year at this time there were only 508 sales. That's a whopping 61% year over year increase.

Now, here's why! Prices have dropped dramatically. The average sales price in March of this year was $299,586. The average sales price a year ago was $408,574. That's a price drop of 26%. Compare that the Fauquier County average sales price of $318K and you begin to see some of the reason homes aren't selling as well there. Do you want to commute those extra miles with gas prices headed towards $4 a gallon and traffic getting worse?

Also, keep in mind that one of the reasons prices have dropped faster there is the larger number of foreclosures. Banks will do what they need to do to get the houses sold and off their books.

The number of new construction listings is substantially down frm last year. The number of sales of new construction is relatively flat.

More than any other local county, there are signs of hope in Prince William County. Yes, the price drops are steep, but it's getting the market moving. Sellers in other counties should take note.

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!

The Charlottesville Area Association of REALTORS has a great plan for giving first time home buyers a little additional help and incentive to get out there and buy.

It's proactive, targets the right group and isn't based on hype. That's a great plan!