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To purchase her house this fall, Sally Murphy was required to sign twice as many loan documents as she had done for each of her past four homes.

The 66-year-old dietician then watched in horror as the title company took until the final day to meet a bank's deadline for transferring ownership on a four-bedroom house in east Windsor, a short sale.

Murphy received title for the house with just 20 minutes to spare, the same amount of time she had remaining to rush across town and pick up keys so her flooring contractor could gain entrance to the home the next morning. She moved in about a week ago.</CW>

Buying a house today isn't for the faint-hearted.

Even though home prices in Sonoma County are the lowest in a decade and interest rates are hovering near historic lows, completing a deal is no easy task.

With more than 10,000 homes lost in foreclosures and short sales in Sonoma County during the past four years, buyers are finding the market has been reshaped by an abundance of distressed homeowners and by so many loans gone bad.

"We're all operating under a cloud of fear," said Pete Phillippe, a loan officer with Princeton Capital in Santa Rosa. "And it's that fear that I think is really putting a damper on the market."

Banks are taking every precaution to make sure they aren't held responsible for any more loans that go delinquent, loan officers said. As a result, buyers who want to get a mortgage today are expected to reveal much more about their personal finances. Bank deposits and tax returns receive extra scrutiny.

"The process of getting a mortgage is much more intrusive now than it's ever been," said Otto Kobler, branch manager at Summit Funding in Santa Rosa.

The files are twice as thick as they were five years ago, Kobler said. And if an underwriter sees any anomaly in an applicant's tax returns, "she's all over it."

U.S. real estate agents are reporting more difficulty in closing deals this fall. A third of agents and brokers surveyed in October said their last sales contract had fallen through, up from 18 percent in September and 8 percent a year earlier, according to the National Association of Realtors. Reasons included rejected loan applications and appraisals that came in under the proposed purchase price.

"There are no easy deals in real estate anymore," said Mike Kelly, an agent with Keller Williams Realty in Santa Rosa.

Jamie Tuell thought he might become one of those people who tried to buy a home but failed. <NO1><NO><NO1><NO>A year ago, lenders twice approved and each time rescinded loans for a home in southeast Santa Rosa for the cinematographer and his wife, Jennifer. The rescinding of the loans meant the Tuells were in danger of losing a $5,000 deposit on the bank-owned foreclosure they had agreed to buy.

The couple received a loan on their third try and purchased their home three months after the bank had first accepted their offer. Tuell attributes the long-shot success to the extra effort of Adam Menconi, an agent with Sotheby's International Realty.

He loves his home in the Ragle Ranch subdivision south of the Sonoma County fairgrounds. But if he had it to do over again, Tuell wouldn't put his wife and two young children through the ordeal.

"It was emotionally devastating to go through the process," Tuell said. "And we have a happy ending. I can't imagine the people who go through the process and don't get it."

Buyers are expected to purchase more than 4,300 single-family homes this year in Sonoma County, a fairly typical year by historical standards, when the boom years of the past decade are excluded.

But for the first 10 months of the year, the county's median home price has dipped to $325,000 — on track to become the lowest annual price since 2000.

In contrast, the annual median peaked in 2005 at $595,000.

With prices down and 30-year mortgage rates hovering around 4 percent, homes are more affordable than they've been in years, real estate agents say.

But the county's housing market has been transformed in the last four years by more than 8,000 foreclosures. As well, in the past three years there have been more than 2,500 short sales — transactions where the property is sold for less than the amount owed on the mortgage.

Together, those lost properties amount to roughly one in every 10 county homes with mortgages.

This year nearly half the homes sold have been foreclosures or short sales — already nearly 2,000 such purchases. Agents said first-time buyers need to understand the reality of that change.

"The houses they're going to see are not traditional houses on the market where the owner's got the fresh-baked cookie smell," said Julie Dempsey, an agent with Coldwell Banker in Petaluma and the incoming president of the North Bay Association of Realtors.

Malcolm Miller, a Santa Rosa psychologist, found himself dealing with surprise expenses this year when he tried to purchase two short-sale houses as rental properties.

<NO1><NO>After the seller accepted his offer on the first house, Miller balked when the bank sought an additional $40,000. He found a nearby home and made an offer, which was accepted. But he later learned he would be expected to pay an extra $18,000 in delinquent homeowner association dues.

Miller canceled that deal and eventually went back to buy the first property after the bank agreed to accept only an extra $10,000 over his offered price. He completed the purchase, even though he later learned he would need to spend more than expected for maintenance and repairs.

Some unforeseen costs are a part of short sales, he said. Even so, he found it frustrating when the other sellers failed to disclose up front the unpaid <HY0>homeowner's </HY>dues.

His agents, Tammra Borrall and Sheela Hodes with Coldwell Banker in Santa Rosa, said short sales are priced lower than normal properties because of the possibility of hidden costs.

"Short sales are not for the faint of heart," Borrall said.

<NO1><NO>Even qualifying for a mortgage to buy a conventional home is no slam dunk.

Lenders and real estate agents widely agree that banks dropped their underwriting standards too far in the early and mid 2000s, approving loans for too many buyers who lacked the resources to repay them. Those bad loans produced financial shipwrecks for buyers, upended the U.S. financial system and helped send the economy into a global recession.

But many said the pendulum has now swung too far in the other direction. The current loan process involves a hyper-vigilance and an excess of paperwork designed by lenders more for self protection rather than to make sure the borrower is creditworthy, several lenders and real estate agents said.

<NO1><NO>"Now you've got to scrutinize everything, and that's just for the pre-approval," said Kris Anderson of Allstate Mortgage Company, the loan consultant for Sally Murphy.

Murphy, who is settling into her Windsor home, said she avoided disaster in her house purchase because of the heightened diligence of Anderson and her real estate agent, Trent Taylor of Keller Williams.

Without such help, she said, "you probably won't get through this without ripping your hair out."