Ask Elaine!

Elaine is a top producing agent in her firm and area. She is a published author and real estate expert.
If you have questions on real estate, send your questions to Elaine and she will answer your questions.

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Questions & Answers

Hi Elaine,

Why Do I Need a REALTOR?

Julie Brown, Lanexa, Va.

Thanksgiving is the one Holiday my family eats out, as I need a break, so they treat me on this special day. This year one of my tenants/buyers joined us as his wife will not be in the area till the middle of December. We had a wonderful time.

Three weeks before he dropped by my office on a Saturday morning and I was not in, as I was out showing homes. My Owner/Broker however was in the office.

My client told my Broker that he has been in touch with me constantly for 8 years, thru 2 combat deployments. He would receive updates on his search criteria thru the MLS as well as email newsletters and emails. He was very impressed so when he finally was able to be station here in my area, he contacted me straight away.

After he left my Broker called me and told me about the visit. He said "Now this is good real estate". I was driving at the time, but I puffed out my chest and was very pleased.

Now this is just one small example of what REALOTRS do, I hope you take time to read the following excerpts from emails that were sent this holiday.

True story:

"I was in the market place (that's Farm Fresh) this evening selecting my vitals (food) for my Thanksgiving Day bounty (dinner) and a young lad (a guy about 30ish) that I had passed earlier in the aisle had turned around and approached me calling my he was much larger than me, I worried that I needed to be ready for he stood across from me, with many people around me in a public place, I acknowledged that indeed I was _(Broker/owner's name here)...he out stretched his hand and said I just wanted to thank you.... not yet sure why I obliged his hand shake...he asked me if I remembered him...directly I said "not so much" ....he introduced himself as "Dave", and further explained the (REALTOR with our Company) and I had helped he and his wife to buy a house some years ago, and that if it were not for us caring about them and working on their behalf they would have never been able to buy a home...but because we stood with them and worked through the arduous process of buying the home, even at times when they were ready to give up, we kept them going. We continued to educate them to the process, to counsel them through the steps to buying their first home, and to encourage them all along the way ... that from our efforts, even when they almost stopped believing, when all was said and done, they owned a "home"....and, now years later their 3 year old daughter and he and his wife have a wonderful home that they cherish everyday...and quote "every day we thank you, (the REALTOR who was the agent), and your company for believing in us and helping us to own our own home, if it were not for y'all and what you did we may never have owned a home"...he further commented that when they go away on travel their young daughter cannot wait to get "home" as it is where she feels, he had not seen me for a while and just wanted to say "thank you"....

"Now, at that moment, I did not break down and cry, but instead I congratulated him for his fortitude and strength to do what he needed to do to preserver for his family, and that this is what we do ..we are fortunate to have the most incredible mission, to be a part of people's lives to help them to change their lives....and, that I was glad to know that it all worked out and was hopeful that that he and his family would have a most wonderful Thanksgiving in their "home"....and, that I appreciated his sentiment and that I hoped he knew that we are here every day, and if there is ever anything we can ever do for he and his young family.... to just holler...

"He proudly walked away with his basket of Thanksgiving dinner....and, me.... I just stood their proud and grateful for the honorable craft that I practice every day...and, though this week, as many weeks do, made we sometimes wonder if I am enough, or whether I can I hold up, and that there are some days that are just too hard.... I knew that the universe was as it should be...and, that this is what I was meant to be....and, that all is good, and I will be fine, and proudly I walked away with my basket of Thanksgiving dinner ...and thankful for all the giving that I had this day....

So, to you and yours I wish you a wonderful and safe Thanksgiving, and never stop believing in what we do every day and in our craft and in those we serve."


Great story. And timely too. I was driving home from dropping (we will say Peter) off for working this morning, when I saw a FSBO sign, and thought that even in tough times, it is so important to have a Realtor to help you out with all the unexpected things that can happen when trying to buy or sell a home. How do you handle a short sale? Who is there for you when you are mentally exhausted? What happens when a last minute inspection issues comes up? A Realtor...that is who.

I know you all (REALTORS) are sometimes taken for granted, and that is a shame. I for one know just how important you and what you do are.

Enjoy the holiday and be safe.


Questions & Answers

Dear Elaine,

My husband just recently passed and I have a summer home on the river that we bought over 30 years ago. In the last five years, my husbands health deteriorated and we stopped going and have rented it during that time. It is now worth nearly 10 times what we paid for it, even with the recession, and I wish to sell it but I do not want to pay capital gains taxes and I am not interested in a tax deferred exchange for another property being I am 76 years old. The house has no mortgage on it.

Is there any way I can sell it legally without paying so much capital gain taxes?

Thanks for your help,

Ricki Blanton, Surry, Va.

Hi Ricki,

Yes, you can and I helped my clients who have done it several times. There is an entity called a CHARITABLE REMAINDER TRUST. This can be set up very easily with a qualified attorney and the procedure is as follows:

You gift you river home to a Charitable Remainder Trust (CRT) set up by your attorney. The Trust will have its own FEDERAL ID number just like a business. Then you have the house listed and sold. The amount it sells for is your charitable remainder trust contribution.

That money the TRUST receives for the river place should be invested in an investment vehicle such as an annuity that can pay a regular return to the Trust. YOU ARE ENTITLED TO RECEIVE a distribution from the CRT based on your age or if you want to have a joint beneficiary - the ages of both of you.

Based on your age with you as the sole beneficiary, you would be entitled to up to a 10% annual distribution form the CRT. So, say your if your river home sold for $500,000, you would receive an income of $50,000 every year for the rest of your life. You will also receive a tax write off for the contribution which you can carry forward up to five years currently.

You also have the option to set up a wealth replacement trust such as an ILIT - Irrevocable Life Insurance Trust - if you have heirs that you want to leave the value of the contribution to the CRT too on a tax free basis in most cases.

If you want to know more and are considering doing one, contact me and I have qualified experts who have done this for many years with others seeking to do the same as you.

Thanks for Asking Elaine!


Hi Elaine,

I am confused, to say the least. My sister told me to do a Short Sale on our home as my husband has lot his job (8 months ago, and luck with finding one). We are also behind 4 months on our mortgage.

We purchased our current home 4 years ago. To say it bluntly we are under water with our mortgage about $80,000, which is why a regular home sale will not work for me.

My husband's brother told us to do a thing called Deed-In Lieu. Can you please tell us the difference in these tow options?

Thank you in advance for your help,

C. R. Dancer,

Richmond, Va.

Hi C. R.,

Deed in lieu of foreclosure and "short sale" are alternatives to foreclosure. Because foreclosure is so devastating to a credit score, almost anything is better than foreclosure, and both of these alternatives result a much lighter impact on a credit score.

A deed in lieu of foreclosure and a short sale are very similar but there are some key differences that depend on the details of the situation.

Potential tax liabilities

An overlooked downside to a deed in lieu of foreclosure is the possible forgiveness of the deficiency balance. Under federal law, a creditor is required to file a 1099C whenever it forgives a loan balance greater than $600. This may create a tax liability for the former property owner because it is considered "income." However, the Mortgage Forgiveness Debt Relief Act of 2007 provides tax relief for some loans forgiven in 2007 through 2012.

The key issue in a deed in lieu of foreclosure is whether the lender is willing to forgive the deficiency balance. Read the contract carefully to see how the deficiency balance issue is handled. If the document is unclear, take it to an attorney with experience in property law. An attorney's time is not cheap, but will be a bargain compared to signing an agreement you do not understand and are surprised later to realize its implications.

Here is the typical (although by no means inclusive) list of deed in lieu of foreclosure or short sale requirements:

  1. The residence must already be on the market for a certain number of days (90 days is average).
  2. There can be no liens on the property.
  3. The property cannot already be in foreclosure.
  4. The offer of a deed in lieu must be voluntary.
  5. For a short-sale, the seller must have a hardship.
  6. The house must be priced reasonably.

Is a "short sale" a better option for you?

On the other hand, the property owner and lender may choose to do a short sale on the home. Through a short sale the lender agrees to accept less than the balance owed on the mortgage at sale. The deficiency balance is forgiven, typically.

Some mortgage companies are asking borrowers to agree to accept liability for the deficiency balance. The lawyer told my clients to refuse to do this and the bank backed down in order to close. The lesson here is if you are considering either a deed in lieu of foreclosure or a short sale you must review the terms and conditions carefully and make certain you understand whether the deficiency balance is forgiven. Also consult a lawyer.

Unlike a deed in lieu of foreclosure, the ownership of the property is not transferred to the mortgage holder, and remains with the owner.

Some lenders choose short sales because they do not want to own the distressed property. They would much rather see the owner sell the property and lose the deficiency balance than be forced to take the property through foreclosure, as foreclosure is a costly and time-consuming process.

Whether the lender picks a deed in lieu of foreclosure or a short sale depends on how the lender balances its risks and how it wants the distressed properties to appear on their books. State laws may have an impact on the decision, too.

One last point regarding short sales: Like deeds in lieu of foreclosure, a lender is required to file a 1099C if the debt forgiven exceeds $600. As mentioned in the deed in lieu of foreclosure section above, The Mortgage Forgiveness Debt Relief Act offers former homeowners relief for forgiven debt.

What if the lender rejects a short sale or a deed in lieu of foreclosure?

If the lender will not allow a short sale or a deed in lieu of foreclosure, foreclosure is the last option, although it presents major problems. Foreclosure auctions tend to bring significantly less money than a normal sale would bring. If the sale brings less than the amount owed on the loan, the remaining balance of the loan is called a deficiency balance.

If the home falls into foreclosure, it is possible to mitigate the negative impact of a deficiency balance by filing bankruptcy. Generally speaking, deficiency balances are treated like any other unsecured debt in bankruptcy, meaning that they can be wiped clear by Chapter 7, and repaid over time through a Chapter 13. Although bankruptcy does not sound like a positive alternative, it may be the best solution if the mortgage lender will not allow the home to be sold through a short sale or a deed in lieu of foreclosure.

I urge you to consult with an attorney experienced in bankruptcy law to understand all of your options to resolving your mortgage debt.


Hi Elaine,

My brother is getting a divorce. She will have the kids and most of his money. He got the house which they had built 6 years ago. They over built it for the neighborhood they built in so he can not sale the home to pay off the mortgage and he can not afford to keep the house. About 2 years ago when they started having trouble they put the house in his name only and re financed the mortgage in his name so her credit would not be hurt. Wrong move on his part, as I told him at the time.

So my question is what is a Deed in lieu instead of a foreclosure? How will this impact his credit?

My friend used you to sell her home and to purchase a home about 3 years ago and she swears by you.

B Hawkins

York County, Va.

Hello B,

Let's talk about: Deed-in-lieu of Forclosure

As the name sounds, a deed-in-lieu of foreclosure is a process in which the deed to a home is signed over to the mortgage company in return for them forgiving all, or a significant portion, of your mortgage loan.

You are giving your property to your lender in exchange for a release of your mortgage repayment obligation. The advantage to you is that it immediately releases most or all of the defaulted loan.

You also avoid a full public foreclosure proceeding. You may receive more generous terms than in a court ordered foreclosure. The advantages to a lender are to minimize their losses... and a significant reduction in the time, expense and red tape, involved in a foreclosure proceeding.

Despite the fear of calling the lender to inform them of a financial hardship or asking for help, homeowners should just contact their bank or mortgage company and ask them what they can do to start the process of reviewing an offer for a deed in lieu of foreclosure.

Mortgage companies are not allowed to request their clients give them a deed in lieu, because it must be offered voluntarily by the homeowner.

In fact, many mortgage companies will not even suggest this option to homeowners in default, because they do not want to be viewed as persuading or pressuring the delinquent homeowner into giving up their home, and of course; they would rather have the money to pay off the mortgage or get it back on track.

Thus, it will be up to the homeowners themselves to begin the process of speaking to the bank or mortgage company about a deed in lieu of foreclosure.

This should be done as soon as they know they will be unable to stop foreclosure any other way. Deed in-lieu-of foreclosure should always be an absolute last resort to avoid full a court order home foreclosure.

Deeds in lieu of Foreclosures are not automatically approved by the banks or mortgage company.

You may also get into the black hole with this type of option. Chase, Citibank, Bank of America is just a few who has different departments and agents in each department handling the same property and not talking to each other. The paper work gets lost, missed phone calls, and in some cases the Banks require the property to be listed and the listing to be active.

That being said, what agent is going to list a property that knows the owner is trying to do a deed in lieu? I did to help put a very nice client of mine. They had to have the property as an active listing. With an offer on the table they had to decline the offer or they would loose the option of the bank taking the property back. So you see this is a quagmire. The only upside is it hits your credit like a short sale would, not as much as a foreclosure would.

I urge you to consult with an attorney experienced in bankruptcy law to understand all of your options to resolving your mortgage debt.


Hi Elaine,

I am an avid reader of your Blog and articles you write on real estate. Here is my question.

What is a "contract for deed"? My real estate broker suggested that I consider this, but I don't understand the concept, could explain this to me?

Lillie Morgan, GA.

Hi Lillie,

This is also called an "installment contract" or a "land contract."

Oversimplified, you enter into a contract with a buyer for the sale of your property. The contract price, for example, is $310,000. You give the deed to the property, in recordable form, to your attorney to hold in escrow. Your buyer makes periodic payments to you. And when the buyer is able to pay you in full, you instruct your attorney to record the deed into the buyer's name.

It was developed years ago, when the ranchers out West wanted to sell some acres to their farmhands.

This may sound simple to you, but there are many issues that have to be reviewed. For example, the Internal Revenue Service takes the position that such a transaction is considered a sale for tax purposes. That means that the seller has to determine whether there will be any income tax to pay when the contract is entered into.

Also, if the seller currently has a mortgage on the property, unless that loan is paid off in full or the lender approves of the transaction, it could trigger the "due on sale" clause in the seller's loan documents.

The due-on-sale clause is a concept that lenders created decades ago when they did not want their seller to allow a new buyer of the property to assume the existing mortgage. For example, if the current loan was 6 percent, and now the market for interest rates was much higher, the lender wanted to get the higher rate from the new buyer. NOTE: (In the 80's the non qualifying assumable mortgage was popular, the Reagan era did away with this.) In simple terms, if you sold your property -- or entered into a contract for deed -- this would trigger that clause and your entire mortgage would then be due and payable.

So, you and your attorney must review your loan documents to determine if the due-on-sale clause applies. Most loan documents within the past 10 to 15 years will contain this concept.

If you own this property out right then this may work for you. You would still have your attorney review all contracts and you may even want to talk with your tax advisor. You would still have a taxable event. Other issues to consider is if the property was your primary residence or was it used as an investment property. Always do your home work and consult with the experts.

I urge you to consult with an attorney experienced in bankruptcy law to understand all of your options to resolving your mortgage debt.


Hi Elaine,

I would like someone to explain to me what a short sale is. I would really like an idiot's guide as to what a short sale is. I have read so much and no one has really broken it down for me.


J. Alan Cox, N.C.

Hello J.,

An Overview of Short Sales:

I have written a lot of articles on Short Sales and Foreclosures. I have been on TV, I have a radio show called "Ask the Expert on Real Estate", it is produced and aired on WMBG 740 AM, here in Williamsburg, James City, New Kent and York County area.

Definition of a short sale A short sale is when the lender agrees to accept less than what is owed on the mortgage. The short sale process proceeds as follows:

That is just a basic overview of the short sale process. It may seem like a simple process, but it is not.

Now this will work if you have only one mortgage company involved. What if you have a 2nd mortgage on the home? This is where the wheels go off the track, so to speak. The 2nd mortgage wants more that what the 1st is willing to give them. The 2nd lender refuses to corporate. Now you are asking who is doing these negotiations. The seller, the closing agent or the Listing Agent would be the one to get this done.

The second may still refuse to close. So the property could still go into foreclosure. I know this does not make sense, but it does happen. If the property goes in foreclosure then the 2nd lender will get nothing. So you would think that the 2nd lender would want something rather than nothing.

Virginia is currently a state in which the lenders may go after the Seller for the amount they have lost on the short sale or foreclosure of the property. The amount lost could also be a taxable event with the IRS for the Seller.

In some cases, the difference between the two numbers is being forgiven by the mortgage lender. In others, the homeowner must arrange with the lender to settle the rest of the debt.

Theoretically, short sales are less costly to a lender than foreclosures. There are fewer legal costs involved, for example. But the chief attraction of a short sale is that there is a buyer for the house, while a foreclosed property can sit in a lender's portfolio for months.

Here is a list of banks and the average amount of time it takes to close a short sale. These are from my own experiences with short sales.


Hi Elaine.

I have a friend who is thinking about buying a short sale. There is so much written out there he is a little confused. Could you clarify this process for him?

Thank you.

Archer, New Kent, Va.

Hi Archer,

Here is an Overview of a Short Sale. I hope this will help our friend. Call or email me either of you has any questions!

I have written a lot of articles on Short Sales and Foreclosures. I have been on TV, I have a radio show called "Ask the Expert on Real Estate", it is produced and aired on WMBG 740 AM, here in Williamsburg, James City, New Kent and York County area.

Definition of a short sale A short sale is when the lender agrees to accept less than what is owed on the mortgage. The short sale process proceeds as follows:

That is just a basic overview of the short sale process. It may seem like a simple process, but it is not. This will work if you have only one mortgage company involved. What if you have a 2nd mortgage on the home? This is where the wheels go off the track, so to speak. The 2nd mortgage wants more that what the 1st is willing to give them. The 2nd lender refuses to corporate. Now you are asking who is doing these negotiations. The seller, the closing agent or the Listing Agent would be the one to get this done.

The second may still refuse to close. So the property could still go into foreclosure. I know this does not make sense, but it does happen. If the property goes in foreclosure then the 2nd lender will get nothing. So you would think that the 2nd lender would want something rather than nothing.

Virginia is currently a state in which the lenders may go after the Seller for the amount they have lost on the short sale or foreclosure of the property. The amount lost could also be a taxable event with the IRS for the Seller.


Dear Elaine,

My husband and I are looking to purchase a new home in the Williamsburg, VA area. We would like to avoid buying a home where Chinese drywall was used in construction. How can you tell a home was built with Chinese drywall? Any information you can provide is greatly appreciated.

Chinese drywall was used in new home construction at the height of the building boom, between 2006-2007, when there was a drywall shortage, and there was an upsurge in post-hurricane construction. It was not used in ALL new home construction of that time period. Here are some of the indications a home was built with Chinese drywall:

Here are some websites where photos of Chinese drywall and the damage to electrical wiring and copper components, can be viewed:


Dear Elaine,

Loan modification...why do they want toxic assets on the books?

This is the third Blog I have done on this subject about the same client. My client has put in the 6th time for a loan modification on their 1st mortgage. They even go their lawyer to help them as the lawyer is best friends with my client. The lawyer has not charged my client for helping them. And still my clients are getting nowhere.

American Servicing Corp. is representing Leman who is an insurance company who is now in receivership of the government. They are the investor who is the loan holder on the mortgage note of my clients. They have refused to do a modification of my client loan. So I ask you and our Representatives in Washington why are they allow to make more toxic assets on the books when they a made a mess of their company and wanted mine and your tax money to bail them out and refuse to do loan modifications? Can anyone tell me or my clients?

My clients called today to see if American Servicing Corp. received all the correct documentation that was sent in the 6th time the 1st week in Feb. 2010. It was confirmed that they do have all the documentation they need at this time. In order to get this information the 1st rep they talked to was named Ann her employee ID # is TGN, she hung up on my clients when the asked for her employee number and they had to call back to get the number and to talk with a rep. This is the lost mitigation department of American Servicing Corp.

The 2nd time they asked the rep. to talk with a supervisor, when the supervisor got on the phone he acted like he could not hear my clients when they asked for his employee ID number. He hung up on my client. He did say "Oh you are taking notes". He then proceeded to act like he could not hear them. This is still the lost mitigation department of American Servicing Company.

The 3rd call my clients talked with another rep. who gave my clients Henry's employee's Id number, which is #UWC. My clients still wanted to talk with a supervisor and was put into a voice mail at which time there has been no returned calls. This is still the lost mitigation department of American Servicing Company.




American Servicing Company is owned by Well Fargo and there are countless websites on the internet about how they treat their clients and the lack of service on their part. ARE THEY NOT REGULATED BY THE FCC OR THE OCC? CAN ANYONE ANSWER THIS QUESTION??????

My clients both are self employed and are like countless others who are having problems with loan modifications due to this very reason.

Visit my web sites to view other listings at,, You will also find articles and more information on homes, the Virginia real estate market and my team.


Dear Elaine,

My home is not selling? I have had it staged and it has nice curb appeal. I have it listed here in Northern Virginia, D.C. metro area with a local real estate company who everyone uses. What am I doing wrong? We will be moving soon (the next two weeks) to Ohio for my husband's new employment to begin. Any suggestions?


Mary O.

Dear Mary,

In today's market, price is the major driving force. The public has a large inventory to pick and choose from. Today's market is a "Buyer's market," and will remain this way for at least another 3-4 years, as we are in a 5 year cycle now. I know you are tired of the doom and gloom of the media, but consider this. When you move, are you planning to buy or rent? If you are planning to buy, are you prepared to carry two mortgages? Or if you are planning to rent, can you afford to pay a mortgage and monthly rental payment? Can you carry two sets of home expenses; taxes, utilities, payments, upkeep (lawn etc.), and such? Remember, renting doesn't get the tax benefits that home ownership does. Will you be digging yourself deeper in a hole? Why not reduce the price of your home? Again, price is the major key.

If you have owned your home for less than two years and did a 100% mortgage, then you will be in trouble and may be required to bring money to the table. Renting your home out is an option, but you would have the expenses to consider. Also, if your mortgage is high, you may have to take a negative cash flow because people will not rent if the payment is too high.

You said the company you used is strong in your area. Are they strong on internet marketing? According to the National Association of REALTORS, 90% of all home searches begin on the internet. I personally advertise on 40 plus internet sites for my listings. In the Williamsburg, Virginia and surrounding areas, the average time on market for a home is 6 to 9 months. I also place all of my listings on 4 MLS systems and in Advertising in print does not help to sell your home.

A national or international company, such as RE/MAX, with a sign in your yard is your best bet.

Another tip is to go and look at your competition (other listings in your neighborhood) and compare them to your house. It is important to have an objective point of view, don't look at it as your house, it is a home.

Now more than ever, curb appeal is very important. Call me or email me if you have further questions.

Remember, price is your driving factor and you may have to bring money to the table to dig your way out.


Dear Elaine,

I have had my house on the market for over 6 months now. I have only had a handful of showings since I listed it in the fall. I wanted to try and sell it myself, to save on commission. It really seems that I will need to use the professional services of a Realtor. Can you tell why Realtors are able to sell the homes they list more quickly than for sale by owners? What is my benefit of hiring a Realtor over trying to sell the home myself?


Heather, Newport News, Virginia

Dear Heather,

I know that you are not alone in your assumptions. Many homeowners believe they can list their own home and save money on commission. They do not realize how much is involved in a real estate transaction. Not only is selling a home time consuming, but consultation and coordination with professionals at every level is necessary. There are many legal loopholes that leave you vulnerable as a seller. You need the expertise of a Realtor to help you avoid these issues. Also, A staggering 80% of home sales are done through a Multiple Listing Service. Realtors have access to this. Sellers may have as much as several thousand members depending on the area or residence. An MLS listing is the most effective way to bring in qualified potential buyers. Please remember, attendance at a seminar or reading information online does not make you an expert on home selling. For additional information, please visit my website to read my article entitled "Debunking the Myth of More Net Gain with For Sale by Owner".


Dear Elaine,

We are new to the area, and country and recently tried to purchase a home. Currently, we have no outstanding debt. We have no credit cards and no loans. We also have money saved in the bank for home closing costs and down payments. Even with all this, we could still not get a home loan. Our lender said the reason was that we have no credit score. Is there anything else we do to get a loan to purchase a home?


Iris Quinton, Virginia

Dear Iris,

Don't worry; there are some programs which are in place to help people in your situation. One option is a program where you can use alternative trade lines to prove credit, such as cell phone bills, utility bills, etc. The lender that I use, Sam Poole of Breakwater Mortgage could tell you a little more about this type of program. Sam could also help you set up such a program. You will need three total positive trade lines. Other sources could include secure credit cards or car payments on a car loan. If you choose a credit card or car payment as your trade line, be careful. You will have to make all of your payments on time. Don't max out your credit card and be sure to keep a balance of 1/3 or less. Also, be sure to ask if the credit card/car payments are reported to the three major credit reporting organizations. Contact me for more information at (757) 564-1557 if you have any further questions.


Dear Elaine VonCannon,

My name is Joyce and I live in Manhattan, NY. I just read your article "How to Research and Purchase a Good Investment Property" and I found many good points I need to keep in mind as I venture in learning how to purchase an unkempt building that is across from my apartment building. The building looks almost abandoned, it's in such sad state. I was able to find out that there are only a handful of tenants still living there. I would like to purchase it, rehabilitate it, and rent it out to low/high income residents. My questions are, where do I need to go to research the property's past and present, and who would I need to speak to in order to get information on purchasing the building? I also want to learn how does owning a building play in the IRS field? Thank you.


Joyce, Manhattan, NY

Dear Joyce,

Thanks for asking. As for research do the following points:

  1. Talk to the tenants and find out who they pay the rent to each month, then go and talk to that person or company ask them if the owner is will to sell. If not see item #3 on this list and find the owner and write the owner a letter expressing your desire to buy the property and how you qualify to pay for the property.
  2. Call the City housing authority and find out if there are grants to apply for to help with the cost of rehabbing - a lot of times there are. You may have to write a business plan or proposal in order to get the grant. Go to your local business college or school and ask for help to do this. It can't hurt.
  3. Go to city hall where they real estate tax records and titles to real estate properties are kept. Look up the records for this property and you will find all owners and what the taxes are and the history of the property and the price each time it was sold.
  4. I would also call the city code and compliance department and see if the building is up to code. This may prompt the city to investigate the property which in turn will put heat on the owner so they may want to sell.
  5. Make a budget for your self. Are you a contractor? Are you doing most the work your self? If not you will have to have a large cash budget to draw from to do the rehab. If not, this be a money pit for you. You should have a inspector or contractor check the property over before you buy it and tell you what needs to be done to the property and have some estimates in hand.
  6. As for tax purposes, any improvements can be used as a tax write off. You will need a CPA to do the taxes because of the rent issues - they can answer you questions on taxes.

Good Luck,


Dear Elaine,

My brother recently had a bad experience with an on line limited service brokerage firm.

He saw that they would give him back 75% of there commission fee. They sent him listings. He and his wife rode around looking at the homes they sent him. He called the listing agent to gain access to the homes so they could view them. They found one that they loved. Had the firm write an offer.

The firm did not ask for a septic and well inspection as they were not familiar with the area. My bother purchased the home. One month later the well went dry (the well was a shallow well 60 ft. deep). This cost him $3200 to have a new deep well put in. Six months later the septic back up, and he had to replace all the carpets and redo the wood floors in the home.

This would not have happen if the septic inspection had been done and it pumped out before closing. This cost him another $9,000. The listing agent did not add it to the contract and the out of state firm did not write it in. He contacted his lawyer and found he had no recourse. Have you ever heard of this type of buyer's real estate?


- Lilly, Wadesboro North Carolina

Dear Lilly,

An agent in my office came across an interesting new limited service brokerage scenario recently. The agent was a listing agent on a property.

The agent received a call from a couple who wanted to see the house that was listed. The agent showed the home. The agent asked the important question are you working with another agent. The couple answered yes and told the agent that their agent could not be present to show. So the agent doing "due diligence" for the sellers, showed the home.

The agent received another call from the same couple wanting to see the home again. They told the agent that their agent could not show them the home this time either.

At this point in the story, the agent told me about the second showing that the agent could not be present for, I told the agent that they need to ask questions and stop all conversations that they were having with the interested buyers. As they could be perceived as "talking behind the sign" (talking to another agent's client). Even though the couple called the agent, the agent was going to call the couple to get feed back and see the level of interest.

I counseled the agent that this could be perceived as "dual agency".

Another concern was the agent could have weaken her seller's position by maybe in small talk with the potential buyers given information that they could use to their advantage. Another question I asked the agent is why the buyer's agent could never be there for showings? Who would write the contract? Who would do the home inspection; the other agent needs to be present? Can the other agent do business in the state of Virginia?

What came out was the other agent work for an online limited brokerage firm. So the listing agent was in a sense doing both sides of the transaction and the commission was going as a referral fee to an out of state firm. This leaves the buyer with no representation on the transaction. This could open a whole chapter of negative fall out.

Buyers and Sellers beware of limited brokerage firms and whose interest they protect. It seems like the only protection is the limited service firm's.

Thanks for Asking,


Aloha, Elaine

We saw your articles/blog on a msn search...

We are actually in forclosure Monday, Nov. 13, 2006, due to a messed up dispersment from our May, 2004 , Mortgage, with (undisclosed lender).

The Title Co, they used has since closed We have fought a Year with, (undisclosed lender), as they now call themselves, ( perhaps this is all legit, they service loans for " Investors " ) and no longer "sell" Mortgages...

In the Year since they sent our last Mortgage payment back (because even though the HUD statement provided at closing stated $15,000.

Town Taxes were paid...6 Months later We were informed by Our Town We were in threat of a Tax Lien We paid one Year $3,000 , to fix this next thing (undisclosed lender) sent Us a Bill for $11,000 , stating they had paid the Back Tax to prevent a Tax Lien...We contacted (undisclosed lender) and worked out a Forebearance with aggreed Monthly Payments sent By Western Union in cash....within one Month of completion of this thet sent our Payment back ...We contacted them and were told (undisclosed lender) does not accept " short"payments.. when We indicated we were complying with a signed Foreberance , We were told We needed to sign a " diferent" aggrement with a $ 3,000 down, and double Mortgage Payments, $2,159, per Month.

There is way more ....

We have tried to keep up with all (undisclosed lender)'s requests , However, after basicly re-aplication , including Financial Statements, Income / Expense to several diferent principals, from the Retention Dept, to the " Office of the President.

We gave up and Sold Our Precious Home Of course it took all of a Year and now with P&S in hand and $25,000 Deposit ,contacted all of the above .....for some reason were asked to send all maners of " Proof" including appraisal Hud 1 , and a statement from Buyers Financeer.

We were told that this would be shown to their investors for approval.....stalling long enough to advertise and We suppose complete the Forclosure, Short Circuiting all Our Unbelievable effort, not just Paperwork , We were also Fixing the Property to Maximise selling offer.

Needless to say WE now take the time needed to research...thats when We found your articles/blogs.

Perhaps We can write or "add to" a help Book for Working Folks trying to Swim with the Sharks

We appreciate Your feedback...

Folks in Chatham, NH


I am so sorry to hear about your misfortune. There are good companies in the business. I do have a lender that you can talk to help you get your credit straight and to be able to purchase a home again. I will post this on the ask Elaine and my blog. Call me or my office to get the name and number of Sam. Also I would contact the FCC about this company, your local state senator. The FCC is the main one you need to contact. Also talk with a lawyer or legal counselor.

Thanks for sharing,


Dear Elaine,

Thank you so much. I am so overjoyed, you have confirmed everything that I wrote on paper but was unorganized. All your information has set me in the right course. I am intending on going through each of the steps and have already begun researching grants that will assist me in this project. Again, thank you. God Bless.

Joyce :-)


If land is purchased with deed restrictions and the land is subsequently sold to another person are the ded restrictions still binding?

Thank you,

Donna, Newport News

Dear Donna,

The deed restrictions are recorded witht he deed at the courthouse. If this is the case then yes they do indeed convey. That si how it works in Virginia. I would contact the courthouse in the city or county and have someone help you look up the ded in the deed book to see. The information is public and you may look up any deed.

Thanks for Asking,



Elaine, I was impressed enough by your web site presentation to venture a question. My husband and I own a rental condominium in downtown DC and are thinking of selling it and doing a Starker like-kind exchange. We live in Arlington, are in our mid-50s, and don\'t have any immediate retirement plans. But since I\'m a W&M graduate and our daughter now goes there, we have an obvious affinity for Williamsburg, and I imagine we could get more for our money there than by purchasing another property in the DC area and it might turn out to be a location where we\'d want to retire.

My questions, therefore, are: What's the strength of the rental market? Are condos, town houses, or single family homes more likely to stay rented? Are good property managers available? (We've had an excellent manager for 15 years here.)


Sue, Arlington


Thank you for the nice words about my web site. Now to your question.

You would get more "bang for you buck" here in Williamsburg. If you went to my web site under articles i had one published about retirement in this area. Their are a several articles on retirement, as I have an SRES designation.

About rentals.......again read the several articles I have written on property management and investment in rentals ( not all property managers are created equal....and you are very lucky to have had a good one in the D.C. careful of the extra add on expenses that a lot of property managers charge, this is covered in my articles)..

In the Williamsburg area, most builders and HOA's have place a cap on rentals, condos and townhomes. Too many investors were buying and renting and this was deflating property values. If their is a cap on the subdivision that someone wants to buy a property and rent it, then they may go on a waiting list. The quota of rentals is 10% of the total ownership of the subdivision.

The good news is detached homes have fewer renters in them. And if you choose to purchase a detached home you would not run into a cap in 98% of the time.

If you have any more questions, please email me or call me and I will be glad to help you. And if you have the time read the articles on my web site. My articles are published all over the internet by all kinds of sites (mortgages, single parent magazine, none re/max agents, investment groups, etc.) I hope this has helped answer your question.

Thanks for Asking,



I am trying to locate some mortgage brokers that will finance raw land in Virginia area. Can you help me???

Thank you,

Joni, Cumming

Dear Joni,

I have a mortgage lender that is licensed in three states. They are a local lender here in Hampton Roads. They can help you finance raw land in Virginia. Contact Breakwater Mortgage, and ask for:

Dan Wood at (757)817-5840


Kevin Onizuk at 1-877-45-BREAK

Thank you,



I have a Disney timeshare and plan to sell it to buy another Disney timeshare. Do I have to worry about capital gains since I will replace it with like kind?


Charmaine, New York

Dear Charmaine,

Thanks for visiting my website and "Ask Elaine". I contacted both my CPA who is a retired IRS agent as well as my Attorney. Both of my authorities said that if you have owned the timeshare for more than one year and you make a profit when you sell it, you will pay 15% Capital Gains on the profit of the sale. The profit margin being if the sale price is different (higher) than the purchase price. If you have owned it for less than a year, are taxed at a 28% Capital Gains rate. I would suggest that you ask your attorney or CPA for verification.

Thank you,



My husband & I have purchased property at Williamsburg Plantation on Longhill Rd, Williamsburg. This has proven not to be the ideal setup for us. We would like to sell this property and get the most $$$ for the time share. The unit is 2 bedroom, week 28 of the fiscal year and 1 bonus week. We have been told that a realtor CANNOT sell a timeshare. Is this true? Would you please contact us via email.

Thank you,

-Vicki, NC

Dear Vicki,

REALTORS can sell time shares. And some REALTORS do that here in the Williamsburg area, but I am not one of them. Call around and you will find one of the Real estate companies who do resell time shares. Or call me and I will tell you one.

But, on another note to sell time shares, most of the times share sells associates are not license due to the fact in Virginia time share sales persons do not have to be licensed.

Time share sales persons do not have the training that REALTORS are required to have by state and federal guidelines. REALTOS are required to have ongoing training to renew their license every two years.

I wish you luck in the sell of your time share.



My fiancé just sold his home and he had only lived in it for 1 year and 7 months under the 2 year time frame. He is moving in with me in December. I have lived in my home for 6 years. I paid $500,000 cash for it. It is now worth $875,000. We wanted to get a new home after we get married in March this year. I know I am allowed a $250,000 deduction, however, is it true that he must live in my home for a full 2 years, being married, (or not) in order for us to get his deduction of $250,000? We would like to know if there is any way at all around this as we wanted to purchase a home for $1.1 Million and do not want the capitol gains. Please advise us and thank you so much for your help!

-Diana, Seattle, WA

Dear Diana,

Your situation is very different from what I have talked about before. Your fiancé should have waited to close after the 2 year window. There are a few acceptations 1. Being multiple births 2. Relocation due to his job situation. Other than that he will have to pay capital gains.

My next question to you is you going to put him on your deed when you get marry? He will have to be on your deed to get the tax credit and it will only be for the amount of profit in your home. Say your profit margin is $300,000; the both of you could not take the $250,000. You would divide it in half or one person takes the $250,000 credit and the other person take what is left of the profit. This also depends on how you will file your taxes.

I do not know of any way you can get around him not living there for 2 years, newly married could be one, but again I think he has to be place on the deed. Check with you CPA or tax lawyer. You can even call the info line of the IRS.


Dear Elaine,

I was expecting to much of you and I'm truly sorry. I did not explain my situation right. I did not say we bought the property for $300.000 and sold for $1.000.000. I said we sold the property for $1,000,000. The buyer put down a deposit of $300,000 and we were the ones who gave him a mortgage of $700.000. We are mortgagers, aren't we?

Thank you for your advice. I would call the state bar assoc. and proceed from there.

-Natalie, Morris County, NJ

Dear Natalie,

I understand what you are saying. Yes you are holding the mortgage. So you are doing owners financing. I do not think I made myself clear to you.

  1. What was the original sales price that YOU paid for this property?
  2. Subtract the current sales price that you are selling the property for, what you originally paid for it (if it was a gift or you inherited it then it will be price the market price at that time). This will give you what the taxes will be based on for capital gains.
  3. You still would fall in the 45 day window of having a contract on another property that is at least the price of the profit you are getting for your property.
  4. By owner financing I do not know what that would entail with this transaction till I call my CPA and ask him.

Does this make it clearer for you?

Good luck...


Dear Elaine,

Thank you so much for your prompt answer. Reading your letter on this subject, it looks as if we would have to pay the capital gains. We did not identify the property we would like to purchase, because at that time I was not sure about anything, and did not know that I had to notify anybody. I came across your website only recently. I wish I did so before. Please answer one more question. What percentage we would have to pay, considering, we only received $300,000 down payment and gave the mortgage of $700,000. Also, do you know any good accountant or tax advisor here in Randolph, NJ that you could recommend?

Thank you so much for your valuable time and advice.

Best regards,

-Natalie, Morris County, NJ

Dear Natalie,

Again I am not a tax advisor or accountant. MY question to you is, "What was the original sales price you paid for the property?" Say you paid $300,000 and you sold it for $1,000,000j, you would owe taxes on $700,000. The capital gains are about 50%, you would owe the profit to the state/federal tax people. When you make large profits in investment you need to do a 1091 tax exchange. You do not notify anyone. You have a lawyer hold the proceeds of the sale (the profit) in an escrow account and you have 45 days to procure a contract on a property. Read my articles I have written to real estate investment. The articles are all on my web site.

I do not know how owner financing would play in this scenario. I would call the state bar association of your state and ask them to recommend a good tax consultant. I do not know of any in your area. I use a retired IRS agent to do my taxes, so I keep out of trouble.

Good luck...


Dear Elaine,

We owned a business for the past 35 years. Last May, we sold this real estate land for over $1,000.000 and are in process of buying a new house for investment for 600,000. Do we have to pay capital gains and if so , how much?

Thank you for your help.

-Natalie, Morris County, NJ

Dear Natalie,

You will own capital gains on the profit of what you purchased the land for. If in fact you have used all the profit for the investment purchase of $600,000 in real estate, then you should be alright. The one question I would ask is did you identify the investment property in the 45 day window that you had from the day you closed on the sale of the $1,000,000 property? If not then you will probably owe capital gains on the profit of the sale of the $1,000,000 property. Check with an accountant or tax advisor.

Thanks for asking,


Dear Elaine,

I read this in your website, is it correct????

"Eligibility for exclusion is based on the five-year period prior to the sale. If a homeowner has owned the property for at least five years and lived......"

I thought that the homeowner had to simply own and live in that home for at least 2 years! to avoid capital gains tax.

-Manley in Naples, Florida

Dear Manley,

That is for owner occupied only that you are talking about. The sentence you refer to is for investment property that the owner has identified as a non-owner occupied property when the property was purchased. Always check with your accountant as laws constantly change.


Dear Elaine,

What is the school availability for Brickshire?

-Dolores in Long Island, New York

Dear Dolores,

Brickshire, which is in New Kent County currently has 3 schools. A High School, Middle School and a Primary School. Due to the New Community that was passed on a 3 to 2 vote the Farms At New Kent should start in 2 years as soon as the infra structure is in place. Due to the upscale community of Brickshire and the Farms New Kent will be adding 3 more new schools (purposed) and a new library. Public School Office number is 804-966-9650.

The county SAT scores are:

Average total expenditure per student is $6,602. Students Attending College 75%. The scores are higher than most of the Tidewater/Hampton Roads area with the exception of York, Poquoson, James City/Williamsburg and West Point.

In answer to your question New Kent has some very good schools.

New Kent Primary School
11705 New Kent Hwy
New Kent, VA 23124
(804) 966-9663

Principal: Fred Balmer -
Asst.�Principal: Lynn Sodat -

New Kent Middle School
11825 New Kent Hwy
New Kent, VA 23124
(804) 966-9655

Principal: Howard Ormond -
Asst.�Principal: John Moncrief -

New Kent High School
7501 Egypt Road
New Kent, VA 23124
(804) 966-9671

Principal: Yvonne Jones -
Asst.�Principal: David Ditzler -
Asst. Principal: Scott Bray -

Thank You for writing to "Ask Elaine",

Dear Elaine,

Looking to relocate to Tidewater area for retirement. Have been looking at Stonehouse. Your article mentioned real estate at the Tradition Golf Club late 2005. How can I be apprised of when those real estate opportunities will be available?

-Kevin in Sherburne, New York

Dear Kevin,

I belong to four MLS systems that cover the Tidewater and Hampton Roads area. If you would like I will place you and the criteria that you instruct me to use for your home search to be placed in 1 or more MLS Systems so you will receive within 24 hours of the posting all new listings that fit your criteria. The 1st time you will receive all the listings within the areas you are interested in. After that they will be in real time as to when they post on the MLS systems. Are you interested in this feature? It is of no cost and you are under no obligation.

Thanks for Asking,

Dear Elaine,

My house is on market for 2 weeks, there are several buyers came to see, but none of them put down an offer, I try all FengSui that I learned from your website but still not worked out. I do not want to have 2 mortgage, please help me to sell this house. Please note the selling price is very reasonable and lower than other one in the same area.


Dear Hoang,

The 3 reason a property does not sell is location, price or condition of home.

  1. Does the walls need painting
  2. Are to floors in good shape, carpets not worn or dirty, title or vinyl not cracked or torn, wood floors polished not scarred up.
  3. How are you advertising the property? Home books? Newspaper ad? Web sites? MLS? Are you using an agent? Exposure is important.
  4. I do not know what market you are in. Here the market is taking a curve to adjust. Instead of 30% to 40% increase in equity a year you will see 5% to 13% a year (which is the normal growth rate it should be at)� my article on my web site, "Up, Up and Away in my Real Estate Balloon".
  5. In my area the curve is not having a seller's market now, but it will adjust to an equal sellers/buyers market. This has homes selling in 30 to 90 days instead of 1 hour to 1 week as it was before. It is still early to panic on the 2 week mark.
  6. What is your house number and what is your selling price? You need to do numerology on this aspect as well. See my article on my web site about this subject.

If you still have questions please, feel free to call me at my office 757-564-1558 or 757-288-4685 on my cell.

Best Regards,

Dear Elaine,

We are getting ready to move into a home that has a crawl space after living for 20 years in a house that was built on a slab. My friends have been telling me all these horror stories about moisture under the house. Do you have any advice for us?

-Bruce in New Kent, Virginia

Dear Bruce,

Start by making sure that the home you are purchasing has a layer of sand under it and a plastic moisture barrier. The plastic should have a few very small holes in it, in order to allow the plastic to breathe. A good termite and moisture company or contractor can do this if you choose not to do it yourself. Another recommendation of mine is to keep bushes, shrubs and other plants trimmed at least 5 inches from the house as well as to have a 6-inch buffer of pea-gravel between the house and any mulch or landscaping areas. This is vital to keep moisture away from the house. Drains and gutters are very important to divert moisture from your home. The black plastic drain extenders that go on the end of the gutter spouts are a great idea.. There is no reason to be nervous. If you have any electric or plumbing work to be done, it is a lot easier to do it in a crawlspace than if the house is on a slab. The base of your home is all about personal preference, there is really no right choice.


Dear Elaine,

I am looking to purchase my first new home, but I feel overwhelmed because it is very hard to save up for such a large down payment. What should I do?

-Angela in York County, Virginia

Dear Angela,

The most important thing is choosing the right lender and getting pre-approved before you start your search. I use and recommend a mortgage broker. A mortgage broker is not an hourly employee and works on commission only. Therefore, they work very hard to find the right loan to fit your needs. A mortgage broker also works with a multitude of lenders. The broker I use works with 75 lenders, including some of the major players in the mortgage market. After you choose your lender, then interview several realtors to find a realtor you feel comfortable with and that you feel is motivated to help in the search for your new home. If you have any more questions, please feel free to contact me at the office.

Happy house hunting,


Dear Elaine,

Should we offer a home warranty with our listing?

-Jason in Smithfield, Virginia

Dear Jason,

If you are purchasing a home and the home is 10 years old or older I would suggest a home warranty. In fact, a lot of my first time home buyers are people relocating to the area who I give home warranties as a closing gift. If you are listing a home and the home has any age on it, or if you are in a competitive marker and you know you will be getting multiple offers where people will not ask for a home inspections, then by all means offer a home warranty. A home warranty will also cover the home from the time you list it from the time you close it and it will be passed on to the buyer. The coverage period is one year after purchase of the home warranty and you may also extend your coverage every year. Some home warranties I feel are better than others. I use 2-10 which covers the roof, unlike most home warranties. Home warranties range in price depending on how many options you have. A home warranty will rarely cost you over $400. Where else can you get this kind of insurance for such a bargain price? Thank you for you question Jason, if you need a more detailed response please feel free to call me.


Dear Elaine,

I am getting ready to retire. I would like to relocate to James City County. Should I take all of the equity that I am getting from the sale of my new home and use it to buy our new home in James City?

-George in Hampton, Virginia

Dear George,

I will let my loan officer, Dan Wood of Breakwater Mortgage answer this question.


Having a house payment can be inconvenient, but a mortgage of any kind is a good tax shelter as the interest on the mortgage is a tax deduction. It depends on if you need this tax write off or if you don't. There are a lot of new programs out there, such as adjustable rates and interest only. Fixed mortgages are becoming a thing of the past. Feel free to call me so we can go over your unique situation.

Dan Wood of Breakwater Mortgage