NorthEast Georgia's Premier Real Estate Resource from The Classic City to Lake Hartwell

Act Now to Take Advantage of the National Tax Rebate and Avoid Paying Rent Throughout Your College Student's Education

According to the Office of Student Financial Aid at the University of Georgia, average room and board expenses in Athens total $615 per bedroom / per month – 12 full months per year.   Meaning, rental houses in Athens easily pay for themselves while continuing to hold or increase their value throughout the entire period of ownership.  This is why I have always recommended putting investment money in rental houses in Athens, Georgia.

The intelligence of these investments applies particularly to parents of college students because of the vast savings afforded by purchasing rather than renting in a college town (an area where I have more than a little bit of experience)!

My parents helped me to purchase my first Athens rental property while I was in college at UGA.  The rent paid by my roommates covered the mortgage payment, escrow payment, and my portion of the utilities throughout my entire time in college.  Once out of college, I moved out, and used the additional rent to supplement my income while I settled into my career.  Then, I sold the property for a $35,000 profit over purchase price and used that money to pay for the down payment on my first home with my husband (and new car!).  

By being smart investors, my parents made a one time cash investment of $7,000 and avoided paying rent or utilities for my entire time in Athens – an average savings of $7,300 per year.  Eventually, they also received their cash investment back, AND their intelligent investment provided me a nest egg to promote a strong start to my future without having to get into debt over my head or ask them for financial assistance. 

In addition to the obvious savings my parents enjoyed, and the nice start in life afforded to me by their investment, home ownership allows your young adult to build crucial positive credit while helping them learn responsibilities of home ownership. 

If you have a son or daughter in college, I highly recommend looking into purchasing a property in the area.  And, do it NOW to make another $9,800 that is only available for purchases by December 1st.  Even if you lend the downpayment money to your college student - as long as they are first time home buyers living in the house, they should qualify for both the National $8,000 tax rebate and the Georgia State $1,800 tax rebate offers.  But, they have to CLOSE before December 1^st to qualify.

With that benefit, plus the rent, your savings should total ~ $40,000 over a 4 year college career.  This doesn’t even take into account the savings for students who are currently on out of state tuition – add another $80,000 in savings for that.  Plus equity gained and profit after the sell . . . for any family with the means, this investment simply makes good sense!

The market is perfect for Buyers right now, thus the property should produce a very nice profit in the future if they wait for a good market to sell. 

In review:  assisting your college age son or daughter with purchasing before December 1^st rather than renting or living in the dorms saves an immediate $9,800; another $7,300 per year throughout their college careers, and then saves your young adult incalculable amounts in interest rates, fees, PMI, etc. by having a nice nest egg for their future.  All the while, teaching them crucial lessons for adulthood.  This is what I call a win-win-win-win situation!

Contact Julie Haley TODAY to make the most intelligent investment you can make in your child’s future.  Julie@JulieHaley.com

One More Time - Let's Revisit the Tax Rebates Available before It's Too Late!

The good news is, the real estate market seems to be rebounding nicely.  If you've read my post regarding the 28 properties which went under contract or sold in Hart County during the last 2 weeks of September, this is not news to you!

While not the only factor, I feel the national first time home buyers tax rebate is at least partially responsible for this rebound.  Unfortunately, this offer only applies to properties which close before December 1st. 

If you think you still have plenty of time to find the right property and close before December 1st, think again!  Mortgage lenders are trying to mend their evil ways, resulting in slower processing, knit-picking underwriters, and more intensive due diligence inspections.  The average first home purchase closing takes 4 weeks.  If the property you choose is a foreclosure or short sale, it could take twice as long. 

With the tax rebate currently applying only to properties which close by December 1st, home buyers hoping to take advantage of this offer need to be under contract THIS WEEK to assure receiving the benefits.

This is why I want to make issues of the tax rebate offer my theme for the next week . . .

I won't go over the basics of the program again.  To find out those basics, see my earlier blog under the archives for "April 2009" or under the category "Buyer's Tips".  However, I will add that I have since read articles which indicate the tax rebate can be used in instances where the lender borrows money from a family member to purchase!  Naturally, you still need to check with your personal tax advisors, but the information has come from reliable sources.

This is important for newlyweds and particularly college students to research.  I've written articles in the past describing the many positive aspects for parents of college students to purchase a house rather than spending money on rent.  I am going to pull that one out of the archives, dust it off, and repost it over the coming days.  If you include the GA State tax and the National tax rebate, your college student can make enough in rebates by buying a house to pay for a full year of college tuition AND books, with more left over!  Now - more than ever before - it is crucial for parents of college age sons and daughters to discuss the possibilities of purchasing over renting!

As this is my theme for the next two weeks, you will find articles going in depth on even more of these subjects every day.  In the meantime, contact me at julie@juliehaley.com for further discussions.  Don't wait; the clock is ticking fast . . .

The Effect of the Tax Rebate on the Property Ladder, You, Me, and Even Retirees in Florida

Most have heard Congress recently passed legislation allowing qualified first time home buyers to receive a tax rebate of up to $8000.  Google it and research the benefits if you haven't done so.  Unlike the 2008 version, this rebate doesn't have to be repaid!  It is an excellent attempt to propel the real estate business, and I believe it will have a great impact if the lenders will use their bail out money to join in the common cause.  Even though the tax rebate only applies to first time buyers, sellers of all types of properties should see benefits as a result of the property ladder . . .

What I've been terming "The Property Ladder" works like this: 

• Once a first time home buyer is preapproved for a loan, they choose a Realtor and buy a starter home listed for sale - the first wrung of the ladder.
• The seller of the starter home is then able to buy a bigger house perfect for their growing family - the next wrung up the ladder. 
• This allows the Seller of the bigger house to finally move to the house of their long-term dreams - the next wrung up the ladder. 
• The seller of the dream house is now a happy retiree able to buy a condo in Florida, a lake home in Hartwell, and a couple of rental investment homes in Athens, because the rental income pays their annual tax bills on all of the properties.

When the banks began pulling back on funding and tightening regulations, more first time home buyer candidates had to remain renters.  Thus all of the houses on the market took longer to sale: from starter homes to family homes to dream homes, and so on, and so on. 

Obviously, moving the starter homes is an opportunity for everyone hoping to sell; Family homes, Florida vacation homes, Hartwell Lake homes, townhomes, mansions, and even double wides.

Because qualified applicants can file for the rebate with their 2008 tax return, or lower their withholding over the course of 2009 by the amount of their rebate, the tax rebate should help first time home buyers with the expenses of first time home ownership.  I should also add that most foreclosures can be purchased at large bargains, but often need work.  This requires cash many starter home purchasers don't have after going through the process of putting a downpayment on a house.  This rebate allows them a means to pay for those repairs and begin filling some of the empty shells left after foreclosures.

Oh - and parents of college students - I think this is a great opportunity to experience the benefits of the rebate while helping your college student grow their credit:  Gift them the funds and assist them with Buying the house they currently rent (I even know of a lender who can offer 100% financing!).  Have their roommates continue to pay rent, and your college student will have an income stream while also receiving a tax rebate that will assist in their education expenses for the year - and gain equity throughout their college career.   BTW: A good property management company (All Hart Realty, for instance!), can manage it for him or her, collect rents from their roommates, pay the mortgage, make repairs, and simply cut a check to your son or daughter every month for you.

Encourage everyone you know who can benefit from the tax rebate to buy!  Contact me anytime, and I'll work with you to help determine your elligibility.

How low can you possibly go on a real-estate bid?

In the current housing market, it is not necessarily an insult to make a lowball offer. Here is some advice to aid your negotiations.

Homebuyers are looking for a steal, home sellers are looking for an out and home builders and banks are selling homes at cut-rate prices. Combined, these conditions have triggered a wave of lowball offers to buy homes in distressed U.S. housing markets.

Conventional wisdom is that the lowball offers don't work. Homebuyers are warned not to "insult" sellers, who are counseled not to counter offers from "disrespectful" buyers. Real-estate salepeople are stuck in the middle, often unwilling to engage in prolonged negotiations that might not earn commissions.

But conventional wisdom doesn't always hold true. With a severe slowdown in sales, some experts now offer new advice.

What is a lowball offer?

The term "lowball" doesn't have a formal definition in real estate, though some salepeople suggest that any offer that's less than some large percentage of either the fair market value or asking price of the property is a lowball offer.

Karen Monsour, a real-estate agent with Exit Realty Properties in Coral Springs, Fla., says any offer that's 25% less than the asking price falls into the lowball category. By this definition, an offer of $220,000 to buy a house priced at $300,000 would fit the bill, as would an offer of $1.5 million to purchase a house priced at $2.1 million. If an offer is that low, the seller's "aren't going to be happy, and most of the time, they aren't going to take it," Monsour says.

Others say the term "lowball" is more subjective. Miriam Bernstien, an associate broker with Remax Prime Properties in Scarsdale, N.Y., suggests that just about any offer could be labeled as "lowball" if it provokes the seller to outrage or anger.

"The best definition I've ever heard is that "lowball" is an offer that's so low that the sellers can't contain themselves. They get angry," she says. "You can't come up with a percentage becasuse not every property that comes on the market is (priced) high. It's very specfic to each house."

Broker's negotiating skills benefit buyers, sellers

Monsour says she encourages buyers to offer at least 85% of the asking price because anything lower than that is "an insult to the seller."

Yet her disdain of lowball offers doesn't preclude a little pre-negotiation negotiation between herself and the seller's representative in lieu of a formal written offer. The agents orally agree on a price that's close enough to open a formal negotiation, with the proviso that that price may be adjusted as the terms of the deal, which Monsour calls "bargaing tools", are discussed. This approach can move a lowball offer into a price range that's acceptable to the buyer and the seller. The stategy works in part because Monsour, like most real-estate agents in Flordia, acts as a transaction broker who has no fiduciary duty to either the buyer or the seller, but instead aims to bring the transaction to fruition.

Bernstein takes a different tack, but one that also can turn a lowball offer into an acceptable deal. Rather than discourage lowball offers, she believes buyers "should be able to put in whatever offer they want and provoke a discussion." After that, it's up to the broker to present the low offer in a manner that's friendly and nonconfrontational. Today's tough markets mean brokers need to be adept at "schmoozing" and negotiating with their colleagues, she says.

Insititutions may be more open to lowball offers

If the seller is a financial institution, rather than a private homeowner, the risk of insult may be lessened, according to Ian Maker, an REO specialist with Re/Max Gols in Rancho Cordova, Calif., (REO, real-estateowned, refers to homes that have gone through forclosure and are owned and sold by lenders.)

"My job is to get offers on their desk. I present them with the facts, and it's their choice to decide what they want to take," he says.

Home builders and investors also may be less emotional than homeowner sellers--but not always. Some builders "put their heart and soul" into each home they build and "become emotional" about lowball offers, Bernstein says. Other builders "can afford to wait until they get" the price they want, she adds.

Buyer may offer more if seller responds

The new thinking for sellers is similar. While a lowball offer may be unwelcome, it could be an opportunity to open a dialoogue with a buyer who "ultimately may give (the sellers) what they want," Bernstein says. A seller who has "a bad reaction" to a low offer, "may lose a good buyer who could make a deal," she says. 

The outcome could depend on the real-estate saleperson's willingness to negotiate, a task that not all agents greet with enthusiasm. A lot of brokers "dismiss the offer has to low" when they should say "Yes, it's low, but let's discuss it and let's see how much more money this person has to give you," Bernstein says. Some buyers will come in with a low offer, but then "come up huge amounts if they really want to buy the house," she adds.

Some sellers respond to a lowball offer with a counteroffer that cuts only a nominal amout off the asking price. Others refuse to counter at all or counter at a higher price just to make a point to the buyer. Bernstein suggest an alternative approach that aims to create good will: Thank the buyer for the offer and indiciate that a counteroffer may be forthcoming if the buyer will "come up with a little more" at the outset.

Lowball offers: 'You just never know'

The bottom line on the lowball offer is that each real estate deal, like each house is unique. That means buyers and sellers need to know the strengths and weaknesses of their own and each other's negotiating positions. If a sellers home is in prime condition, has only just come on the market and is attractively priced, a lowball offer may be rightly dismissed from a position of strength. But if the same home is still on the market with no takers six months later, a motivated seller may be more inclined to give a lowball offer a second look.

Make offers a good tip for buyers and sellers: "Don't let (the deal) die on your end." If the seller wants to sell the property, evey offer deserves a counteroffer, and if the buyer wants to purchase the property, every counteroffer merits consideration. The objective is to keep the lines of communication open until a deal is agreed upon.   

A Buying Guide For First timers

Step 1: Spiff up your credit

Good Credit can lower your mortgage interest rates, potentially saving you hundreds of dollars a month. Order a credit report (usually free online). You can dispute any mistakes, but the most important thing is to build up good credit from here out.

Lenders want clients who can pay their bills on time and and who don't owe too much to anybody else. Automated bill-paying services help. Stop applying for credit cards just for a free t-shirt or shuffling your debt around. Consider closing some of your accounts, but that's tricky. Maxine Sweet, Vice President of public education at Experian, says lenders don't want you to owe near your limit, which can happen if you consolidate to one card. Your score can dip temporarily when you make any big changes even for the better so work on your credit long before you seek a mortgage, she says.

Step 2: Start saving for a down payment and closing costs

Home buyers traditionally had to put up a 20% downpayment. Now it's more like 5-10%. Some don't put anything down. There's nothing typcal today, says Pat Vredevoodg Combs, president-elect of the National Association of Realtors.

You'll always get a better deal if you make a downpayment. Until you paid 20% of your home, your lender will probadly want you to buy insurance on your mortgage. The buyer also has to come up with closing costs, about 1-2% of the price.

Step 3: Calculate how much house you can afford

Housing eats up more of everyones paycheck these days, but as a rule of thumb buyers spend 25-30% of their pre-tax pay on housing. That translates roughly to a mortgage of 3 to 4 times your salary. Consider your entire budget: How is your credit card bill, student loan or kids tuition? How much will your new palace cost to maintain? Will you get a big break on your taxes from the mortgage interest rate deduction?

Step 4: Shop for a mortgage

New loan offerings make it easier to buy a home, but harder to pick which mortgage is right for you. The standaard 30-year fixed rate mortgage allows predictable payments. If you're planning on moving quickly, consider an adjustable rate mortgage, which has low interest and payments for the first few years. Buyers have really low starting payments with thise who want to buy more house than they can afford. Compare terms and rates from several sources. A pre-approved mortgage will let you pounce on the right house. Your lender usually calculates your monthly expenses including principle, interest, taxes and insurances. You'll pay a monthly bill into an escrow account instead of getting clobbered by annual taxes.

Step 5: Shop for a home

Make a list of the features you want or don't want. A realtor can be a great help, so much so that some start planning here months or years before they're ready to buy. The buyer pays the sale commission, which typically runs 5-7%, split between the seller's agent, and the buyer's agent. So especially first time buyers get the service basically for free. Some also shop from people who are selling their own homes, figuring the lack of a commission means a lower price.

Some agents specialize in buyers. To put customers at ease about potential conflicts of interest, some go as far as not working at firms that take any listings. Kathleen Chiras, a spokesperson for the National Association of Exclusive Buyer Agents, says the potential for a double commission gives agents a reason to sell homes that are not neccessarily the best house for that person.

Step 6: Make an offer

How much did similar homes sell for nearby? How long has this house been on the market? (Weary sellers may be more flexible.) Your realtor can evaluate market conditions and help you make a reasonable offer.

Step 7: Sign a contract

You sign and pay a deposit that is held a neutral third party. In some states, you'll want a real estate lawyer to go over the deal. Typically buyers can back out if the home inspector finds big trouble or if they can't find financing or, or in a new twist, Combs says, homeowners insurance.

Step 7: Take a close look at your house

Make sure your contract is contingent on a home inspection for a detailed, objective evaluation of your home's infrastructure. Afterwards, negotiate with the seller over the needed repairs. Be sure the title of the house is free of any liens. Your bank will appraise your house, too. 

Step 8: Show for homeowners insurance

Shop around, but your own car or life insurer will probadly give you a good package deal. As always, a higher deductible saves you money. 

Step 9: Sign papers

You'll meet at a lawyer's office or title company, sign a big stack of paers and receive the keys to your new home.

How Does Escrow Work?

If you've ever made an informal bet with a friend, you may have asked a third person to hold the money until the wager was resolved. When you take out a mortgage to buy a home, you're doing something simiar by opening an esrow account.

How it works

When you put money in escrow it is held by a neutral thrid party (called an escrow agent) who works for both the lender and the borrower. The agent's role is to carry out the instructions agreed upon by both sides. The money is released when all the terms of the agreement are met. Escrow can be involved in anything from multimillion-dollar building projects to purchases made on online sites.

When it's used

When your mortgage closes, your lender will usually require you to open an escrow account to cover property taxes and homeowner's insurance. You'll make an initial deposit, followed by payments to the account every month. (Usually these are added to you regular mortgage payment.) The escrow agent will then release these funds as your taxes and insurance premiums come due.

Its purpose

The idea is to protect the lender by ensuring that you pay your taxes and insurance on time. If you default on your property tax, for example, your municipality can put a lien on the house, which would make it difficult to sell. Or if your house burns down and you've negected to pay the insurance, the lender would be left with no collateral.

How you benefit

Escrow can benefit borrowers by helping them spread insurance and tax expenses evenly over 12 payments. For example, assume your yearly property taxes or two payments of $1,000 each, and your insurance is $400 annually. If you pay these directly, it would mean three large payments a year; your escrow costs, however, would be a manageable $200 a month.

Escrow payments

Your escrow account will have a built-in cushion--if you miss a payment, the lender must still be able to pay your account on time. However, federal law prohibits lenders requiring more than two months. And because your tax and insurance cost will change slightly from year to year, the lender will review and adjust your escrow payments annually.

When escrow may be waived

In most states, the money you place in escrow accounts earn no interest for you. For that reason, many borrowers prefer to pay their taxes and insurance directly. Lenders may agree to this if your down payment is more than 20 percent, although some may raise your interest rate slightly to compensate. Once you agree to putting funds into an escrow account, however, it is difficult to cancel it, so make sure you fully understand the arrangment before your mortgage closes. 

 

 

 

                                                                               

How to Spot a Shabby Remodel

On a ten-minute btour, it's easy to be blinded by new cabinets, floors and appliances. Real-estate pros offer tips on spotting shoddy work.

The Victorian looked fabulous.

The owner has poured thousands of dollars into refinishing the hardwood floors, replastering the walls and updating the kitchen.

What she hasn't done was fix the homes' foundation, floor joists or beams.

"As I entered the dining room, a hutch that was 20 feet away from shaking," said inspector Rick Jarrett of First Home Inspections of Belmont Ohio. Once he peered into the nearly inaccessible crawl space, Jarrett spotted the problem. "There was no understructure. It was all rotted from decay or termite damage."

Jarrett's inspection saved his client, a potential buyer, from having to spend tens of thousands of dollars excavating the foundation and reparing the damage.

If you're looking for a house, you've probadly seen your share of ill-conceived rehabs: additions that stick out like sore thumbs, for example, or once trendy material that quickly became outdated.

Harder to spot are the remodels that look great on the surface, but ignore or deliberately try to hide serious flaws. An imcompetent, clueless or greedy remodeler can leave you with a house that's not only expensive to fix, but potentially dangerous for you and your family.

You'll encounter lots more shabby remodeling if:

"Flippers" have decended on your market. Investors who buy homes in hopes of reselling them quickly may cut corners on rehabs to boost their potential profits.

Expert construction help is costly. The more expensive it is to hire skilled tradespeople, the more tempted homeowners may be to try to do it themselves--even if they have no idea what they're doing.

Building code or licensing enforcement is lax. Substandard construction and imcompetent contractors can flourish in areas where no one is checking up on remodelers.

An experienced home inspector can help you avoid trouble. But at $300 and up, inspections can get expensive. Here's what to look for so you can avoid the biggest money pits and winnow down your candidates before you hire an inspector.  

Fundamentally unsound

Unless you have x-ray vision, you can't peer inside the walls, floors and ceilings to see if a home is fundamentally sound. You can look, howevr, at the homes surface for some real clues about what's going on underneath. Such as:

* Big cracks in the walls ceilings, floors or fondation. Any foundation crack should be cause for concern. Wide cracks elsewhere, or cracks radiating from the corners or windows and doors, may also be a sign of trouble. They can indicate foundation problems, or ongoing movement that could be expensive to fix. If everything looks good, Jarrett said, check the closets. Remodelers may check everything else-- but forget about what's hidden there.

* Sloping, bouncy or "spongy" floors. All homes settle over time. so a slight slope (or even a rather noticeable one on a very old home) shouldn't panic you. But sloping that's accompanied by significant, recent wall and ceiling cracking should be a concern. If the new ceramic tiles in the bathroom are already cracking, for example, you have good evidence of serious trouble. So, too, is any floor that feels less than solid under your feet.

* Doors and windows that don't open freely. This could be due to settling, foundation problems or poor construction. In any case, it may indicate costly repairs are needed.

Wide open spaces. Remodelers often like to combine smaller rooms into larger spaces, but doing so can undermine the stability of an entire house if the remodeler unwittingly removes a structural or load-bearing wall. Sagging rooflines, ceilings or beams should be big red flags. Any time an older house has been updated this way, however, investigate futher. At the very least, ask for copies of the permits and for the name and license number of the contractor who did the work. If the work is unpermitted or the contractor unlicensed, consider steering clear.

* Shocking developments. Home inspector Jim Gibbs check out alot of homes for real-estate investors in the Dallas-Ft. Worth area, and he has seen plenty of truly shocking remodels.

"The biggest problem I see is in the electrical," Gibbs said. The remodelers are "not doing anything near code."

Some of the most common problems:

     * Failing to update wiring when adding rooms or circuits

     * Making dangerous connections

     * Failing to add enough circuits to cope with today's households

It's not uncommon for kitchen remodelers to spend a fortune on, say, countertops and appliances while skimping on the electrical, Gibbs said. Instead of having five, six or more circuits to run all the microwaves and refrigerated wine cabinets, they have one or two.

You can see if there is a problem by simpling turning on a bunch of appliances at once and seeing what blows. Or you can take a look at the electrical panel. "If they've had a major remodel and you look at the circuit breaker panel and it dosen't look new, you need to be suspicious," said Gibbs whose Gibbs Residentail Inspections is based in Plano, Texas.

Even a new box isn't a guarantee, however, since popping in a new panel is relatively cheap. You might also want to stick your head up in the attic to try to gauage the age of the wiring you see. If you have any doubts, you'll probadly want a certified home inspector to give you a report.

Jarrett has seen do-it-yourself electrical jobs where the remodeler tapped into power directly from the street, running it into a garage or other room without benefit of fuses or circuits. Not only such a stunt potentially lethal to the do-it- yourselfer, but the unregulated power could easily result in shocks of fire.

"It's a wonder they're walking around, that they haven't been electrocuted," Jarrett marvels.

The big cover-up Most states require sellres to disclose serious defects in their homes, but some still try to cover up serious water, fire or other damage with a coat of paint. Jarrett's become so accostumed to this particular dodge that he get suspicious if he smells frsh coat of paint in an area that's vulnerable to water problems, such as a basement. (You should also be wary if you find an area painted that normally isn't, such as an unfinished attic.)

Water damage may take a little more detective work:

* Can you see water marks or efflorescence on the foundation? Efflorescence is a white chalky substances left behind by water on the outside of the concrete or brick.

* Does the ground slope toward the house? That can cause water to pool near the foundation or       under the house, leading to rot, mold or infestions.

* Does it smell or feel damp under the house? Any moisture can be a problem. The wetter or more persistent, the worse the potential damage.

* Is the roof in lousy shape? Curling, damaged or missing shingles or flashing are signs that the roof's leaking even if the interior damage has been repaired.

Always call in a pro

What if your prospective home passes all these test? You might be tempted to save money by forgoing a professional inspection, particularly in a white-hot market where other bidders are waivering this step.

Resist the impulse. There are still plenty of less obvious signs, visible only to professional eyes, that a home has trouble. Think of it as cheap insurance: A few hundred dollars spent now could save you a fortune later.

Time To Lock in Your Mortgage Rate

Home buyers may find big savings in locking in mortgage interest rates.

Since mortgage interest rates are on the rise, home buyers can save considerable cash by locking in a reasonable rate.

During the housing boom, interest rates were extremely low-generally between 5.5% and 6.5% - and very stable. So borrowers often didn't bother to ask lenders to lock in their rates regardless of market fluctuations. If one good interest rate deal disappeared, another one was generally right around the corner.

But today the mortgage market is very volatile, and rates are trending upwards. So losing out on a good deal may mean it's gone forever. If a buyer sees a bargain, say experts, they should pounce.

"If you hear of a rate that seems to be much better than the rest of the market, get it in writing and lock it in," said Steve Habetz, a veteran mortgage broker in Connecticut.

Mortgage giant Freddie Mac (FRE, Fortune 500) reported Thursday that the average rate for a 30-year fixed stood at 6.25%, up from less than 6% in May.

Rates on the rise

A panel of analysts surveyed by Bankrate.com - including Cameron Findlay, the chief economist for Lending Tree.com; Mark Larson, real estate analyst at Weiss Research; and Dan Dowling, president of United Mortgage Capital Corp. - expect rates to go up in the next six weeks.

With the threat of inflation growing and investors wary of buying mortgage secutities, other forecasters have predicted will hit at least 7% by the end of the year.

For every half point interest rate increase, the monthly payment on a typical mortgage of $200,000 jumps nearly $70. That adds up to more than $800 a year, and in the first 10 years of a 30-year mortgage alone.

Locking in a rate is easy, as long as you have a contract or at least a binder on a home. Just tell your mortgage broker and he or she will give you a commitment in writing. Locks are available for as long as 60 days, according to Habetz, at a very low cost.

Locking in for 60 days may cost only an eighth of a point extra, turning a 6.5%?loan into a 6.625% one. Paying that extra eighth of a percent makes sense if the locked rate is below market, or if you expect rates to rise.?

"More than 60 days and the lender is usually looking for cash up front," said Habetz.

Habetz has an offer from Wells Fargo (WFC, Fortune 500) several weeks ago that beat anything else available. It was for a 5-year adjustable rate mortgage with an introductory rate of 4.875% - at least a full percentage point lower than competing offers.

"It lasted only two or three days," he said, "and all we had time to do was to get the customers we were already working with into the loan."

Those customers probadly saved themselves $5,000 or so for every $100,000 they borrowed over the first five years. The amazing part of this story, to Habetz, was that not all his clients took advantage of the offer.

Some of my customers said, 'That's an attractive offer. If it's that good, it will probadly get better," he said.

Wrong. It only got worse, and those people locked themselves out of a great deal.

But locking in your rate isn't entirely risk-free. After all, rates might actually go down.

"When rates go down," said Habetz, "most lenders won't take (your rate) down with them unless rates drop substantially. Then they may give you the new rate plus an eighth of a point."?

Certainty in an uncertain market, but that scenario appears unlikely.

Concerns about inflation are helping to push rate higher."Inflation has gone from the back burner to the front," said Greg McBride, a senior financial analyst for Bankrate.com.

At the same time, nervous investors in mortgage backed securities, are demanding higher rates for buying these bonds in what they deem a very risky market. That translates into higher rates for borrowers.

So locking in a good deal now should mean a lower rate for most borrowers. And besides saving them money, a lock should take some of the uncertainty out of financing a home purchase, since buyers can determine exactly what their monthly home ownership expenses will be several weeks before closing.

There are times in your financial life when you should be aggressive and there are times when you should be conservative," said McBride. "When you're buying a house and looking at mortage rates, that's a time to be conservative."

Using the Wisdom of the Ages to Put Today's Market in Perspective

Lately, in our real estate firm, all visitors have had only two questions: When is the real estate market going to "straighten out" and when is the lake going to get back to full pool?

As All Hart Realty celebrates our twentieth year of selling property on Lake Hartwell, we are experiencing regular cycles typical for this area:  The local real estate market naturally adjusting from a seller's to a buyer's market, and the lake shrinking and swelling with the rain levels.  We see these two natural cycles are being not so different, leading us to marvel at John Steinbeck's's wisdom when he wrote:

     "There would be five or six wet and wonderful years . . . and then the dry years would come . . . and it never failed that during the dry years the people forgot about the rich years, and during the wet years they lost all memory of the dry years.  it was always that way."

Rarely are words spoken which so accurately span decades and prove how little has changed with the turn of the century.  Those words were as true when Steinbeck wrote them in 1952 as they are today.  We like to incorporate the wisdom of such thinkers with our knowledge gained during the past two decades to assist Sellers and Buyers through these natural market adjustments.

For Sellers in today's market, patience is a virtue.  we understand the past five or six wonderful boom years for sellers have created lofty expectations, but the following is a fact of this market adjustment: you have a great deal of competition.  The market is inundated with motivated sellers and spec houses.  Your property must be accurately priced and maintained in pristine condition to have the best chance of showing better than your competition.  The All Hart Realty team can help you with current and accurate pricing, provide recommendations for the most cost effective improvements, and construct an aggressive professional marketing plan to offer you the best opportunity to move your home as quickly as the environment will allow.

For Buyers and Investors in today's market, there are many wonderful purchasing opportunities available.  Interest rates are excellent, lenders are offering a bevy of loan programs - including 100% financing, and competition among sellers is fierce.  NOW is the time to buy - before the market begins to cycle back to sellers.  Quite simply - Make An Offer!  We also stress the wisdom of being prepared to hold onto a property for up to five years.  While the natural adjustment has diminished the opportunity for "quick flips", there are true deals available now, and the rental market in both residential and commercial arenas is strong enough to allow for the proper maturation of your investment, or end-user purchase.  If you don't like the hassles of Property Management, allow All Hart's professional property management team to manage your rental and send you a monthly check.

Our decades of experience in the Lake Hartwell area have provided a unique perspective for weathering the recent fluctuations in our market, and we enjoy sharing this knowledge with our clients and customers to help you take full advantage of the opportunities associated with these cyclical adjustments.  While there are very few guarantees in real estate - as in weather - we know land is the only thing we cannot make more of; thus it is a commodity in demand.  Visit All Hart Realty on the square in downtown Hartwell anytime.  Let us share our real estate knowledge with you . . . while we talk about the weather!

How to Finance Foreclosure Properties By Bargain network

Foreclosure properties, REO (Real Estate Owned) property owned by banks and other lenders, and properties threatened with imminent foreclosure all represent great investment opportunities for property buyers. They are the most popular source of affordable deals for those seeking bargain homes, because foreclosures often sell at or below wholesale prices.

Anybody can buy this kind of property. Basically all you need is some money and willingness to bid. But be aware that if you attend a property auction, you may wind up bidding against professional forclosure investment specialists who are also looking for cheap houses. If you are unsure about how the foreclosure real estate game is played, learn as much as possible ahead of time in the Learn Section of Bargain Homes, so that you are not at a disadvantage when making your purchase offer.

Before stepping into the foreclosure property arena, it is important to educate yourself. You'll want to know as much as possible about such things as the pitfall of hidden costs. For example, when purchasing a house that has a lien against it, the buyer may be responsible to pay back the debt. Such strings-attached baggage can include huge amounts of money owed to the IRS.

And you will want to explore ways to come up with the money necessary to finance your purchase of a foreclosure. Some lenders don't lend money for foreclosure property mortgages, while other lenders are eager to make loans to help you buy. To find out more, do some homework ahead of time, so that you can approach the foreclosure auction with confidence and adequate and financial backing

Use knowledgeable resources like Bargain Homes to find answers to your foreclosure questions. Be patient, and don't rush into the first opportunity that comes your way. Foreclosure properties are everywhere and more to come onto the market each day. As you study how the process works, continue your hunt for the right investment to suit your needs, by dedicating some time each day to searching through real estate foreclosure listings in your area.

While you peruse the listings on sites like Bargain Network, also look for information, leads, and advice on financing.

Here are five powerful tips to help you finance foreclosure property:

Pre-qualify for a bank loan

Money talks. If you want to walk away with the property, show cash up front. Sellers respond when they have confidence that you can support your offer with prompt financing, so pay a visit to your mortgage lender before you shop for houses.

You can get pre-qualified in a matter of minutes, by showing a few documents and submitting to a credit check. And if you  want to really up the ante, go ahead and get pre-approved for the loan, up to a certain amount. With a pre-approval letter in hand, you can open doors and have a distinct advantage over other competing bidders.

Assume the seller's loan

If the terms of the loan allow it, you can take over the existing payments and solve two problems at the same time. 1. The strategy is good for the seller, who avoids foreclosure. 2. And as the buyer, you are able to simply cure the default and take over the existing loan without significant loan processing fees or delays. Veteran's Administration (VA) are great in this respect-if you find assumable VA loan you should definitely take advantage of the flexible option it represents.

Owner/Seller financing options

Owners who are faced with the dreadful possibility of foreclosure are usually happy to work with you, if it means it can save their credit from ruination. If you are able to take over their loan, it is a big help to them. In return for being rescued from a sea of debt, sellers will often accept terms that are very attractive to buyers. 

For example, if you don't have cash for a down payment, you can work out a deal with the seller so that they can stay in the house, rent free, for a certain period of time, in lieu of a down payment. Or you could offer them reduced rent, in exchange for labor to help you fix up the place before you sell it, which reduces your remodeling costs.

Home Equity Loans

Sometime the financial capital you need is right beneath your feet. If you own a home with accumulated equity, you might be able to find a great source of investment money without ever leaving home. Lenders will usually charge a slightly higher rate of interest for a second mortgage or home equity loan, but the interest and many of the closing costs are tax dedcutable, which offers extra savings over time. And once you secure the loan and buy your forclosure property, you can always leverage the new price of real estate as collateral and refinance to a lower interest rate.

Private lenders or investments partners

One of the most common arrangements in the real estate foreclosure business is partnership with lenders who have money to investment, but are not interested in doing the day-to-day work required to buy and sell property. You may have a colleague, friend, or family member with investment capital, and you can  sit down and iron out an agreement to share the profits of your joint venture. They put up the money so that you can bid on foreclosures,and then you pay them back with a share of the proceeds when you sell the property and reap a capital gain.   

You can also get funds frio professional investors who lend money for a cut of the action. And if you have trouble getting a traditional loan from a bank, there are plenty of legitimate lenders who specialize in providing "hard money" loans, or loans with higher interest rates made to people who would otherwise be turned down.

Find a reputable lender through resources like Bargain Network, and you may discover that professional partnership can double your potential for success.