When Lloyd G. Blanchard found the wood frame rambler on Brentsville Road near Manassas, he knew his house-hunting days were over.

The place was just what he wanted: a big back yard, a pond behind it, and woods everywhere.

Burt Blanchard's idyll was short-lived. Last September -- two weeks after he bought the house for $66,000 -- he discovered that the State Highway Department was considering buidling the four-lane Manassas Bypass through his back yard. One lane would be 20 yards from his door. The daily traffic count would reach 30,000 vehicles.

"I was just sick," Blanchard recalled. "I thought the bottom of my world had fallen out."

Blanchard, angry that he was not warned of the bypass plan by the real estate agents who sold him the property, took his grievance to the Virginia Real Estate Commission, the agency charged with regulating the multibillion-dollar industry.

Today Blanchard's idyll has been restored, but not because of anything the real estate commission has done or even could do.

The unwitting hero of the tale was the highway department, which decided to build the bypass on another route more than a mile from Blanchard's house.

Investigators from the state Commerce Department, the umbrella agency for the real estate commission and other regulartory boards, concluded that the agents involved in the sale probably did violate state regulations. But if the road had gone through, the finding would have been of little consolation to Blanchard.

The commission has no means of compensating aggrieved home buyers. It can suspend or revoke agents' licenses and it can fine them up to $1,000 -- but the money does not go to victims such as Blanchard. Instead, it goes to the state literary fund, to buy books for state schools -- a tradition of uncertain orgin.

Petyon Klopfenstein, who was the five-member commission's Northern Virginia representative until earlier this month, said "there should be a mechanism for providing monetary compensation. But the state legislature won't permit it because there are too many lawyers there, and they don't want to take things out of the courts and give them to the commission."

A home buyer who feels he has been defrauded or otherwise harmed in a real estate transaction could file a civil suit, but would have to bear all the cost.

The Genral Assembly has also resisted efforts to add public representatives to the commission, all of whose five members must be connected with the real estate industry, either as agents or brokers.

"This is an incestuous relationship," said Del. George T. Grayson (D-Williamsburg), who led a successful fight to put public members on the board regulating funeral homes. "I think we should have a majority of public members on the commission."

Del. Gladys B. Keating (D-Fairfax) introduced a bill at the latest session of the General Assembly that would have added two pulic members to the commission and other state regulatory boards, but the measure was carried over. "It's not quite comatose," said Keating, "It's still a little bit alive."

Klopfenstein said another problem is that the commission's investigating staff is "inadequate." The commission must share 23 Commerce Department investigators with 26 other regulartory boards, which leads to an enormous backlog. "There are two years of cases on the books," said David W. Seitz, assistant director of the Commerce Department for real estate.

Klopfenstein said the Commerce Department actually has a surplus because revenues from licenses and other fees exceed expenses. "Yet," he added, "it can't spend that money for more investigators because there is a freeze on more hiring. It's a crying shame."

The issue in the Blanchard case involves one of the commission's most controversial rules. The regulation says that a prospective home buyer must be informed of any circumstances that would materially affect the value of the property. One such circumstance is new or relocated roads -- such as the Manassas Bypass.

A real estate agent has the responsibility to provide the information if it is "readily available," commission regulations state.

Blanchard, who was a newcomer to Prince William County (he had rented an apartment in Fairfax County), said his search of three years of local newspapers turned up 15 to 20 stories on proposed Manassas Bypass routes, in addition to number of editorials and public notices about hearings.

But Robert Smith, who listed the home when he was with Key Properties of Prince William, said: "What does a road plan mean? I remember more than 20 years ago there was a plan to build a Rte. 50 bypass around Aldie. There's still no bypass."