GaRER August 2012

Pending Home Sales Slip In June Page 2

Volume 12

No. 3

GEORGIA REAL ESTATE REPORT

GRER

Is Your Computer Really Secure?

Page 6

Less Government, Lower Taxes, More Freedom

HHHHH $2.00

August 2012

New Tax Hides In ObamaCare Law from wire services

N

ow that the Supreme Court has upheld the health care legislation, all of its major provisions remain in effect, including the new tax that was designed to affect upper income taxpayers. The 3.8% tax is imposed ONLY on those with more than $200,000 of Adjusted Gross Income (AGI) ($250,000 on a joint return). The tax applies to investment income, defined as interest, dividends, capital gains and net rents. These items are all included in an individual’s AGI. A formula will determine what portion, if any, of these types of investment income would be subject to the tax.

So, beginning January 1, 2013, this new 3.8 percent tax on some investment income will take effect. Since this new tax will affect some real estate transactions, it is important for investors and property

owners to clearly understand the tax and how it could impact you and your clients.

It’s a complicated tax, so you won’t be able to predict how it will affect every buyer or seller.

This new tax — passed by Congress in 2010 with the intent of generating an estimated $210 billion to help fund President Barack Obama’s health care and Medicare overhaul plans — could be relevant to you and to your clients.

Understand that this tax WILL NOT be imposed on all real estate transactions, a common misconception. Rather, when the legislation becomes elective in 2013, it See New Tax page 12

Investing is Not the Path to Wealth

by Dyches Boddiford

S

ome of you who have heard me over the years know I am not a fan of the get-rich-quick promoters.

I think they do a great disservice and create significantly more failures than successes. So, let me go over the cold hard facts of building wealth once more.

You may want to send this to friends and recent graduates that want to grow wealth.

You cannot become wealthy by investing. This may go against your perception of the purpose of investing, but it is crucial to understand this concept if you plan to be wealthy. Some of you reading this letter have not been exposed to my teaching over the years to know what I mean. Let me explain…

First, you cannot be blamed if you

have not thought about it.

The conventional wisdom in the popular press is that investments are what make you wealthy.

Consider these headlines I pulled up in Google: • Tips to Invest In Real Estate and Become Wealthy • Wealth Building Investments • Invest and Become Rich Just think about it for a minute. If you can generate 10% return on your investments (and that is not always easy), $1,000 would only grow to $1,100 in one year, $2,729 in 10 years and $7,389 in 20 years not considering taxes. And See Path to Wealth page 11

“Fairness is not spreading the wealth around, it means creating a system of opportunity for all.”

The ROAD to FREEDOM

by Arthur C. Brooks, American Enterprise Institute

I

t’s not an easy time to be a free enterprise advocate in America.

For years, we thought we had won.

After all, almost no self-respecting public figures call themselves socialists anymore.

With the advent of the New Democrats, even America’s progressive party was on board with free markets and somewhat limited government. The Reagan era had ended the debate about whether the free market was a force for good in the world.

So how did we end up where we are today:

a federal debt higher than our GDP, bailing out bankers and passing trillion-dollar stimulus packages, and government consuming more than a third of what America makes? In other words, after two decades of what should have been the best days of free enterprise, how have we slouched towards the brink of full-scale European social welfare statism?

It’s tempting to say that we didn’t make the case for free enterprise with enough good studies, or the right data, or through the right ads or messages. But that’s not the problem.

The truth is this: We failed to launch a See Road to Freedom page 14

Time To Ban Foreclosures During Loan Mod Effort

by John Adams he way the mortgage industry in this country works is beyond senseless. They fuel themselves into a feeding frenzy by cooking up “exotic” mortgages that no one in their right mind would accept, then the underlying lenders seek federal bailouts when borrowers stop paying.

Then they over-react by tightening approval standards to a degree where few can qualify for a loan, and change appraisal standards so as to encourage appraisers to under-appraise everything. They reject short sales in favor of foreclosure, then allow the foreclosed homes to rot and be vandalized or worse, putting a blight on the surrounding neighborhood and

T

causing values to fall quickly.

In the meantime, they react to late payments by filing foreclosure notices, all the while encouraging the very same borrowers to apply for an endless train of loan modification programs, each more confusing than the last.

California lawmakers saw this insane scenario playing out for the past several years all over the Golden state, and now they have done something about it.

See Ban Foreclosures page 7

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2

Pending Home Sales Slip in June, Remain above a Year Ago from RISMedia

Pending home sales declined in June but marked 14 consecutive months of yearover-year gains, according to the National Association of REALTORS®.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, slipped 1.4 percent to 99.3 in June from a downwardly revised 100.7 in May but is 9.5 percent higher than June 2011 when it was 90.7. The data reflect contracts but not closings.

Lawrence Yun, NAR chief economist, said inventory shortages are a factor.

“Buyer interest remains strong but fewer home listings mean fewer contract signing opportunities,” Yun says. “We’ve been seeing a steady decline in the level of housing inventory, which is most pronounced in the lower price ranges popular with first-time buyers and investors.”

According to the REALTORS® Confidence Index, the buyer traffic index stood at 60 in June while the seller index was 41, which shows a large imbalance between buyer and seller interest. A value of 50 implies neutral market conditions; the disparity between buyers and sellers began to grow in early spring and has been in a particularly large imbalance for the past two months.

“Any bank-owned properties that have been held back in markets with inventory shortages should be released expeditiously

to help meet market demand,” Yun says. “Housing starts will likely need to double over the next two years to satisfy the pent-up demand for both rentals and ownership.”

The PHSI in the Northeast fell 7.6 percent to 76.6 in June but is 12.2 percent higher than a year ago. In the Midwest the index slipped 0.4 percent to 94.4 in June but is 17.3 percent above June 2011.

Pending home sales in the South declined 2.0 percent to an index of 106.2 in June but are 8.8 percent above a year earlier. In the West the index rose 2.6 percent in June to 111.5 and is 3.0 percent higher than June 2011.

Yun says there also have been delays in the closing process. “With record low mortgage interest rates, there has been a surge of refinancing on top of a higher level of home purchases, which has been creating delays recently in the closing process,” he said.

“In addition, there have been some delays with recent foreclosure sales as banks take steps to ensure there are no paperwork problems. This is causing an uneven performance in sales closings, which is likely to continue, but we also see notably higher levels of sales activity compared with a relatively flat performance in the preceding four years,” Yun says.

For more information, visit realtor.org.

T H E G E O R G I A R E A L E S T A T E R E P O R T

August 2012

Wayward Husband Helps Sell House

Tired of Losing Money In The Stock Market?

from Inman News Service

A Beaverton, Oregon woman has created what may be the most successful single-property “for sale by owner” website in history by advertising that her home is up for sale because her husband of 10 years left her for a younger woman.

“Husband left us for a 22 year old,” says a sign in the front yard of Elle Zober’s home.

“House for sale by scorned, slightly bitter, newly single owner.”

The sign is also prominently featured on the website Zober created to market the house, GreatFamilyHome.com, which Zober claims has been visited more than 1.1 million times.

Although the sign also warns that “Adulterers need not apply,” Zober clarifies in a legal disclaimer on the website that the sign is “supposed to be ‘tongue in cheek.’”

Zober says that her marriage of 10 years produced two children but began to fall apart in March 2012, when she learned that her husband was having an affair with “a 22-year-old college student who likes yoga ... and other people’s husbands.”

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“Sure I’m angry, and every bit as sad as the sign suggests,” she writes on the website. “But I’m also equally grateful for the life I do have and I know that the best the way to more forward for all of us is to focus on that. Hence my quirky marketing For Sale By Owner plan.”

Zober warns would-be buyers of the three-bedroom “sweet bungalow” that she’s “not a Realtor, nor do I have the same access to all the fun little stats they have.”

But GreatFamilyHome.com provides what are described as “Realtor type facts,” such as the property’s square footage, lot size, taxes, and school information.

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THE GEORGIA REAL ESTATE REPORT

3

ATLANTA NEEDS SCOUTING..... ...SCOUTING NEEDS ATLANTA

Underwater homes keeping a lid on inventory

CoreLogic: Tight market conditions fueling price increases

“Markets where distressed properties still make up a high number of homes for sale -- such as Atlanta and Chicago, which have each experienced price declines of about 4 percent -- have yet to stage a comeback”

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Home prices saw the largest spring gain in a quarter century during the three months through May, but the sluggish economy threatens further price recovery, according to a monthly report from economists at real estate and mortgage data aggregator CoreLogic.

After reaching a low for the downturn in February, home prices rose 5.6 percent during the three months ending in May -- the largest increase within the same three-month period in the last 25 years, CoreLogic said.

May was also the third consecutive month home prices posted year-over-year gains, increasing by 2 percent. Among the 100 largest metro areas, 71 saw price increases -- the largest number since November 2006, according to CoreLogic.

A pending home price index from CoreLogic indicates that prices rose a further 1.6 percent from May to June.

Can home prices continue to recover even if the overall economy does not?

“The short answer is no, because prices are highly correlated to median incomes, which have not increased on an inflationadjusted basis since 1996,” wrote Sam Khater, senior economist for CoreLogic.

Prices are getting a particular boost in markets with a high share of “underwater” borrowers who owe more on their mortgages than their homes are worth.

“Negative equity is keeping many potential sellers out of the market, which keeps a lid on inventory and combined with the reduced flow of REO (real estate owned) properties has led to much tighter market conditions for lower-priced properties, particularly in the hardest-hit markets,” Khater said.

“For example, Phoenix (up 14.7 percent) and Miami (up 9.7 percent) are the two fastest-appreciating very large markets, including distressed sales. But, even when excluding distressed sales, prices still increased 10 percent and 7 percent, respectively.”

The recent price increases have pushed a substantial number of borrowers out of negative equity, particularly at the low end of the price spectrum, which is seeing prices rise at a rate more than three times that of homes at the upper end.

“National home prices below 75 percent of the median increased 5.7 percent from a year ago, compared to only a 1.8 percent increase for prices 125 percent or more of the median,” Khater said.

“While the influence of home prices generally accrues to all properties, the much larger rise in prices for lower-priced homes helped improve the negative equity share more than it would have otherwise done, because negative equity has been highly concentrated among lower-priced homes,” he added.

In the first quarter, only 26 percent of properties with loan-to-value ratios between 120 and 124 percent in the fourth quarter remained in that particular LTV category -- the balance fell to a lower LTV

category. By contrast, half of properties with LTV ratios between 60 and 64 percent in the fourth quarter remained in that category in the first quarter.

“The price increases for lower-priced, underwater properties are pushing these borrowers to lower LTV segments -- or to extend the underwater analogy: closer to the surface,” Khater said.

“The symmetry of low LTV segments begins to change for properties beyond 100 percent LTV, where beyond that point, a much lower proportion of borrowers are in the same LTV category in Q1 relative to Q4.

The majority or near majority of borrowers in high LTV segments moved to lower LTV segments between the two quarters.”

Markets where distressed properties still make up a high number of homes for sale -- such as Atlanta and Chicago, which have each experienced price declines of about 4 percent -- have yet to stage a comeback, Khater noted.

Given the sputtering economy as well as “lack of income growth, and the amount of shadow inventory still in the wings, which could replenish the flow of distressed sales, it will be difficult for prices to sustain their recent rate of acceleration,” Khater said.

“But for the moment, at least there is some positive news about negative equity’s impact on price increases in some markets.”

T H E G E O R G I A R E A L E S T A T E R E P O R T

August 2012

Frozen Foreclosures Burn Buyers & Neighborhoods

BY INMAN NEWS

Six months after the historic agreement between 49 attorneys general and leading lenders, foreclosure and pre-foreclosure inventories are as high as they were in January, even as investors and first-time buyers fight over scarce discounted properties in the marketplace.

More than three and a half million homes are either 90 days delinquent on their mortgages or in the June foreclosure inventory, but not yet on the market to be sold. That’s a five percent decline since January, according to the latest data from Lender Processing Services, but still the equivalent of nearly four years’ worth of national foreclosure sales.

One reason for the stubbornly high backlog is increased foreclosure starts.

Foreclosure starts — notices of default or scheduled auctions — increased in 31 states in the second quarter in June from a year earlier, according to RealtyTrac., California had an 18 percent increase in starts, which helped boost the state’s foreclosure rate for the month to the highest in the nation for the first time since RealtyTrac began issuing its report in January 2005. At the same time, foreclosures sales are down in Western states, especially California, where June foreclosure sales were down 13.4 percent over last month, and down 48.8 percent vs. June 2011, according to ForeclosureRadar.

Foreclosure processing continues to be slow.

The foreclosure process increased to an average of 378 days in the second quarter, the highest in records dating back to 2007, according to RealtyTrac.

In the first and second quarter of 2012, properties averaged 16 months of delinquency before getting foreclosed on, according to a survey of delinquent owners by the YouWalkAway.com web site. This reflects an increase in the number of months a borrower is delinquent before foreclosure starts are filed and foreclosures are completed and implies lenders and servicers are processing older foreclosures and homes that have been in default for over a year. Underwater homeowners in the survey who received a foreclosure start notice were 11 months behind on their payment. Last year, it took an average of 9 months of nonpayment before the foreclosure process started.

Never has there been a better time to release the backlogged foreclosures onto the market. Interest in buying foreclosures has almost tripled among potential home buyers in the past two and half years, according to a recent survey by Move, Inc., and real estate agents report foot traffic is up among first-time buyers looking for bargains before prices rise and they miss the boat.

Investors, who buy 20 percent of all existing homes these days, are hungry for deals as many see the end of the Foreclosure Era coming.

As a result slow processing and increased demand, REO inventories are so tight that bidding wars are breaking out and not even an upsurge in short sales-caused in part by lenders and owners frustrated by dealing with the stymied foreclosure process-can satisfy the demand. Once a rarity, preforeclosure sales, almost all of which are short sales are expected to as many as 400,000 by the end of 2012, about the same level as foreclosure sales, according to RealtyTrac.

The signing of the landmark Attorneys General agreement last March was supposed to relieve the backlog and

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speed the processing of foreclosures, yet to date it has failed to halt the confusion, delays, and legal and regulatory roadblocks that are keeping foreclosures bottled up.

The standards for foreclosure processing mandated by the agreement are still a work in progress. In April, Joseph Smith, appointed by the US District Court to monitor the agreement, announced it will take at least six months for his office to have in place a process to oversee compliance to the new standards.

These are critical for lenders, because they will provide a degree of legal protection against lawsuits challenging their processing of foreclosures.

See Frozen Foreclosures page 12

August 2012

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THE GEORGIA REAL ESTATE REPORT

5

TECHNOLOGY CORNER & REVIEW {GEORGIA REAL ESTATE REPORT {

A Computer Security Primer Tyler Jones, Contributing Editor There is an old joke that goes: Two guys are out hiking in the woods.

All of a sudden, they stumble upon a huge grizzly bear.

The first guy drops to the ground, gets his sneakers out of his knapsack, and starts putting them on.

The second guy says, “What are you doing?

Are you crazy? You can’t outrun a bear!”

The first guy says, “I don’t have to outrun the bear. I only have to outrun you!”

I tell you this because it actually, and unfortunately, is relevant to computer security.

There will never be a way to absolutely secure any piece of technology, shy of turning it off and never letting anyone touch it, but that somewhat diminishes its usefulness to you.

The idea is to always be secure enough that you are not an interesting or easy target for those that would do you harm. There is a broader scope of threats today than ever before when it comes to technology. This primer will help ensure that you at least have your sneakers on when the bear comes running.

Keep software up to date: Every modern operating system (Windows, Mac, iOS, Android) has an auto update feature. Ensuring this is turned on and your operating system updated regularly will make certain that any known vulnerabilities are fixed and not an outstanding risk to your computer.

Also check that your applications are up to date as well. Adobe Flash and Oracle’s JAVA

have frequent patches because they are still largely ubiquitous and this makes them common vectors for attacks. If your applications can autoupdate themselves (and more and more can these days) make sure that this is enabled as well.

Anti-virus / anti-malware: If you own a Windows machine the absolute first thing that needs to be installed on to your computer is anti-virus software. There are plenty of free options for non-commercial use (AVG, Avast, Microsoft Security Essentials). There are also plenty of pay options out there that will include advanced features and additional functionality; these include Trend Micro, Symantec, Kaspersky and others.

Even the Mac is not immune, and there are viruses out there. Compared to the number of Windows viruses they are a grain of sand on a very large beach, but they are out there.

There are plenty of both free (iAntivirus from Symantec, Sophos, ClamXav) as well as commercial options (McAffee, Intego VirusBarrier, and others).

Firewall: Just like it’s architectural namesake a firewall on your computer is designed to keep danger out and stop it from spreading on to your computer. When enabled a firewall only allows traffic on to and off of your computer that has permission to be going across between your computer and network or

Internet. Again, versions of Windows and Mac released in the last several years have this functionality built in, but you need to ensure it is enabled. If you want something more full featured or with advanced functionality there are open source and commercial versions available.

Mobile Protection: If you have a laptop, smartphone, or tablet make sure that any data that can travel with you is protected. At the very least ensure that you have a password on your device. Most smartphones have the ability to be tracked, locked, or erased remotely if they are lost or stolen.

The iPhone and iPad have a free version of this software built in to them. There are pay version of this type of software for Android and other mobile devices. If you are traveling with a laptop that has sensitive information on it you definitely want to encrypt it. This ensures that if your laptop is lost or stolen no one can access your valuable and sensitive data. Mac’s have this built into recent versions

of the OS, and for Windows there are commercial software packages that can do encryption for you.

Common sense: Your use of common sense is one of your greatest defenses. If you were not expecting a deposed Nigerian potentate to send you an e-mail and ask for your bank account number and routing information, don’t send it when asked for it.

If you are randomly prompted to install software in the internet that you did not intentionally download, don’t install it. If you get an alert that says your hard drive is failing but if you enter your credit card number it will be remotely fixed, don’t fall for it. Any time something smells fishy, research it. Ask an expert. Look before you leap.

A little preventative planning can save you from major disruptions to your home or business computer use. My company deals with these issues every day, and if you feel overwhelmed find an expert to help you identify and mitigate your biggest risks.

Whether you do it yourself or turn to a pro for help, it’s as investment every computer user should make. Keep those sneakers handy!

About the author: Tyler Jones knows everything about computers. He can be reached at tyler AT carmichaelconsulting.net or at his website, which is www DOT CarmichaelConsulting DOT net. He is a Information Technology Consultant to business, large and small, and is based in the Atlanta area.

Tyler’s Software Pick Of The Month: Piriform CCleaner CCleaner helps you keep up good housekeeping habits with your browser and, for Windows users, common system components as well. Touted as a system optimization, privacy, and cleaning tool CCleaner does it’s job very well and very

quickly.

In all major browsers for both Windows and Mac CCleaner will help you keep your cache (local copies of files from the internet), history, cookies and form data nice and clean.

And on Windows XP and newer, CCleaner

will keep your Windows Registry clean, which can significantly improve overall computer performance as you add and remove software from Windows over time.

The Windows version supports XP through 7 (with full Windows 8 support on the way).

For the Mac, OS 10.5 Leopard through 10.8 Mountain Lion are supported. It’s free for home use with reasonably priced business licenses available. You can download a copy today at Piriform.com.

Hardware Review: The Phenomenal iPad The iPad was certainly not the first tablet device on the market, far from it. In fact, Microsoft had been unsuccessfully pushing tablet based laptops for years. But the iPad has certainly created an entire class of products that has exploded over the last 2 and 1/2 years.

What is it that makes the iPad such a dominant force? The iPad features the same

6

tight knit hardware / software / services integration we have come to expect from Apple. And while Apple may be known for a lot of things they are, at their core, a hardware company. It’s easy to tell this when you pick one of their devices up and feel how well “put together” and solid they feel.

So what do most people use an iPad for?

I admit, I have a laptop and an iPhone, so

why do I need an iPad? My experience has been that it fits a need between a smartphone and laptop like no other device can. While a smartphone is always with you, the screen is difficult to use for certain tasks such as document reading or complex graphics or charts.

With the iPad being “instant on” and with a battery that can support 10 hours of

continuous use without a recharge it’s nearly always ready to go. There are certainly things I wish the iPad had (like memory card expansion slot, or perhaps a full version of MS Office), but so far it still sets the high water mark for tablets.

The Microsoft Surface is slated for release this fall, and it will be interesting to see if someone can topple the king of the hill!

T H E G E O R G I A R E A L E S T A T E R E P O R T

August 2012

Ban Foreclosures

continued from front page

In February of this year, during the national mortgage settlement, the California Attorney General was a bit more successful in seeking funds than was Georgia’s. We walked away with just over $100 million dollars, while California borrowers received over $18 billion dollars in relief for Californians who lost their homes to foreclosure.

Perhaps more significantly, California argued for and received acceptance of the Homeowners Bill of Rights, applicable to that state’s borrowers only. Banks are now banned from pursuing the foreclosure process while a borrower is in the process of applying for a loan modification.

This is a huge victory for homeowners, who typically find themselves involved in a modification process they neither understand nor comprehend. Lenders typically shuffle applicants from office to office, from representative to supervisor,

then back to another representative who has no record of previous work performed or paperwork received. This is all standard operating procedure.

In the meantime, local attorneys are advertising the property in the legal section of the county where the property is located. Investors show up, knocking on the door, asking if the home is for sale. The attorneys say they have no way of communicating with the lenders involved with the modification, and vice versa. Literally, the right hand doesn’t know what is happening in the left hand.

The process, known in the lending industry as “dual tracking,” is considered necessary to speed up the resolution process. But the foreclosure process is Georgia is already one of the nation’s fastest, requiring only 4 consecutive weeks of publication in a legal newspaper before selling the property at public outcry on the first Tuesday of the

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following month.

This is happening every month in Georgia.

But California didn’t stop just there. It gets better.

Another piece of state legislation requires lenders to to assign a specific person or team of people to work with the homeowner, so that person doesn’t get handed off to a different person every time they call. It’s called a “single point of contact.” This makes so much sense that I am surprised no one required it before now.

I have personally received hundreds of requests for help from borrowers seeking a loan work-out who have been foreclosed upon before they could satisfy their lender or complete the loan

modification process. And the level of frustration among Georgia borrowers attempting to obtain modification is beyond belief.

In my opinion, the Georgia Attorney General would be well advised to visit with his counterpart in California, and bring home a Homeowners Bill of Rights when he returns. Such a bill would afford Georgia borrowers the respect they deserve when seeking a full hearing before the lender and a straight “yes or no” answer to their modification request.

In addition, it would allow more responsible homeowners a better chance of keeping their home, and force a new degree of transparency on to lenders operating in this state. That transparency is long overdue.

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(5). Use our selling agents to sell your beautiful renovated home.

(6). Use our leasing agents if you prefer to buy and hold.

We have just taken all risk out of the deal for you.

MIKE CHERWENKA mcherwenka@aol.com www.goldmineproperties.net

404-266-5464 Ask for Bill Preston

Office: (770) 338-2994 Cell: (770) 365-4997 (770) 277-6811 Fax:

August 2012

THE GEORGIA REAL ESTATE REPORT

7

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Top 20 Real Estate Websites In June

Experian Hitwise rankings show Zillow on top since March

from Inman News

Last year, Realtor.com and Yahoo Real Estate battled it out for the top position in the monthly real estate website rankings maintained by Web metrics firm Experian Hitwise. So far this year, Zillow has been king of the hill, having bumped Yahoo Real Estate from the top spot in March.

Jockeying for the spots below first place has also been fierce, with Trulia jumping two positions into second place on the Hitwise list in June. Trulia leapfrogged over third-place Realtor.com, bumping Yahoo Real Estate into third place in the process. AOL Real Estate, meanwhile, moved up two positions from May to June, but there were no new websites in the top 10.

The Hitwise rankings don’t tally mobile app users, an increasingly popular option among consumers conducting listing searches. But they still provide a window into who’s winning the battle for eyeballs -- an important consideration for brokers and agents in deciding where to spend their marketing dollars.

According to Hitwise, the top 10 websites on the list captured 38.9 percent of all visits in the real estate category.

Zillow commanded the greatest market share in June (8.61 percent), followed by Trulia (6.89 percent), Realtor.com (6.52 percent), and Yahoo Real Estate (6.06 percent). Rounding out the top 10 were Homes.com with 3.41 percent market share, MSN Real Estate (1.88 percent), Apartment Guide (1.57 percent), AOL Real Estate (1.43 percent), Rent.com (1.30 percent) and MyNewPlace (1.23 percent).

Further complicating the rankings are alliances between several of the top listing portals. Zillow powers for-sale listings on Yahoo Real Estate and sells targeted ads to real estate agents and brokers that appear on both sites. Hitwise shows Zillow and Yahoo Real Estate with a combined 14.67 percent market share.

MSN Real Estate serves up framed Realtor.com search results -- including lead forms for buyer’s agents, when those are displayed. According to Hitwise, Realtor.com and MSN Real Estate have a combined 8.4 percent market share of traffic in the real estate category (Realtor. com operator Move Inc. also supplies a separate set of listings to AOL Real Estate through a subsidiary, ListHub).

That compares to a 10.14 percent combined market share for the next 10 most popular sites on the Hitwise list: ZipRealty (1.17 percent), HomeAway (1.15 percent), Apartments.com (1.14 percent), LoopNet (1.06 percent), Re/max Real Estate (0.98 percent), ForRent.com

(0.97 percent), HAR.com (0.95 percent), Rentals.com (0.95 percent), Redfin (0.93 percent), and HotPads.com (0.83 percent).

Six websites entered the top 100 last month, GetForeclosedHome.com (54th), MLSLI.com (91st), I Rent To Own (92nd), Property Shark (95th), Edina Realty (99th), and OurParents.com. Edina Realty recently made headlines for its decision to withold listings data from national thirdparty websites, in part to boost traffic to its own site.

The six websites leaving the top 100 in June were Rent To Own Direct (163rd), HiddenListings (117th), rentBits (128th), John L. Scott Real Estate (108th), RatePlug (114th), WhiteFence (102nd).

Top-ranked search terms were “zillow,” “realtor.com,” “trulia,” “realtor,” “zillow.com,” “remax,” “apartment finder,” “century 21,” “coldwell banker,” “har.com,” “homes. com,” “real estate,” “apartments for rent,” “re max,” “howard hanna,” “homes for sale,” “har,” “wyndham vacation resorts,” “www.zillow.com,” and “trulia.com.”

Fast-moving sites in June included Calcagni (up 449 places to 354), Tropicasa Realty (up 1,285 places to 1,089), GeoDataPlus (up 447 places to 605), RentToOwn.org (up 174 places to 239), Real Capital Analytics (up 344 places to 684), Panhandlebeachresorts.com (up 585 places to 1,284), FastHomeOffer.com (up 485 places to 1,068), gastonhomes. gastongazette.com (up 603 places to 1,316), Crystal Coast Realty (up 349 places to 871), Network Real Estate of Wilmington, N.C. (up 290 places to 757).

T H E G E O R G I A R E A L E S T A T E R E P O R T

August 2012

JIM DUFFY

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August 2012

THE GEORGIA REAL ESTATE REPORT

9

38 Ways To Lower Your Electric Bill This Summer 1. Set the thermostat to the highest comfortable temperature. Moving the thermostat up one degree could mean about a three-percent reduction in your electric bill.

2. Keep air conditioner filters clean.

Aluminum mesh filters may be washed.

Fiberglass filters should be replaced.

3. Keep air vents clear of obstructions.

4. Close the drapes on the sunny side of the house during the day.

5. Leave storm windows and doors in place when the air conditioner is on.

6. If you’re gone for an extended period, leave your air conditioner off.

7. If you cool with window units, place them on the north side of the house when possible, clear vents of obstructions, shut doors to unused rooms, and close floor or wall registers used for heating.

8. Be sure you have an energy-efficient electric water heater. To check, just read the label or call your local power company.

9. Set the water heater thermostat at 140 degrees if you have an electric dishwasher or 120 degrees if you do not. Always turn off the circuit breaker before you adjust the thermostat on an electric water heater.

10. Insulate the pipes going into and out of the water heater tank. Add an insulated blanket around your water heater if it’s an older model.

11. Turn the water heater off when you’re gone longer than a weekend.

12. Wash full loads of clothes in the coolest water possible. Rinse clothes in cold water.

13. A low-flow showerhead can reduce water use by 50-70 percent.

14. Run the dishwasher only when it’s full.

15. Compact fluorescent lamps can replace bulbs in most table lamps and will save up to 75 percent in lighting energy, produce more light and last up to 10 times longer.

16. For more light, use one large bulb rather than several small ones. A 100-watt bulb produces more light with less energy than two 60-watt bulbs.

17. Tungsten-halogen incandescent bulbs cut lighting costs by 15 percent.

18. Use low-watt bulbs where lighting is not critical.

19. Dimmer switches are actually smarter.

20. Place floor lamps and hanging lamps in corners. The reflection off the walls will give you more light.

21. Turn off all lights, TV’s, stereos and radios if no one will be in the room.

22. Keep the temperature between 36 degrees and 40 degrees in the refrigerator and 0 degrees and 5 degrees in the freezer. Use a refrigerator/freezer thermometer to check the settings.

23. Cool foods to room temperature before placing them in the refrigerator unless the recipe specifies otherwise.

24. Place the refrigerator away from the stove, dishwasher, heat vents and direct sunlight. Follow the manufacturer’s instructions on the amount of air space needed around the refrigerator.

25. Keep the freezer full. The fuller the freezer, the less cold air you lose when opening the door.

26. Defrost manual-defrost refrigerators or

freezers when the frost becomes 1/4” thick.

27. Plan meals so several things can cook at the same time in the oven. Avoid opening the door until the food is done, unless the suspense is too much for you.

28. While the microwave is great for reheating leftovers, takeout foods or cooking a single dish, a conventional oven may be more economical if you’re cooking several items.

29. Baking or microwaving defrosted food

uses one-third less energy than starting with frozen food.

30. If you’re going to clean your oven, use the self-cleaning cycle right after you finish baking. That will give the self-cleaning cycle a head start in heating the oven.

31. Besides cleaning your lint filter after every load, make sure you dry full loads of clothes without overloading.

32. Stop the dryer as soon as clothes are dry, or use the moisture sensor control to automatically shut off the dryer. Overdrying wastes energy and sets in wrinkles.

33. Dry loads one right after another. You’ll use less energy because the dryer is already heated.

34. Cook your main entree on the outdoor grill to keep heat out of the kitchen. You can also cook vegetables and soups on the grill.

35. Find The ENERGY HOG in your house.

Is there an old refrigerator or appliance that you may have running in the basement? Old refrigerators are much less energy efficient than today’s models. The same goes for AC units, both window and whole house.

36. Plant shade trees and paint your house a light color.

37. Ceiling fans will make you FEEL cooler, and use very little energy compared to AC. A ceiling fan should blow air down in the winter and up in the summer.

38. Set the fan on your central air conditioner to “on” rather than “auto.” This will circulate air continuously, keeping the temperature more even throughout the house and aiding in dehumidification.

Five Inexpensive Home Updates to Complete Before Listing Your Home from RISMedia, by Lisa Johnson Sevajian

There is no perfect formula for selling your home efficiently, but by following these five tips prior to listing you can increase your chances to close quickly at a higher price.

1.) Update your old garage doors.

Garage doors seem like a non-issue, but many times they make up a significant percentage of the front of a home. Because of this, they are one of the first things that buyers notice when they pull in the driveway. Replacing, or even just painting, these central fixtures will do wonders when it comes to instantly impressing prospective buyers and standing apart from your competition. The market has changed drastically since many of us purchased our homes here in town. I frequently hear buyers say that they have taken a house off their list because of the lack of curb appeal.

This issue is especially important to people on busier streets, corner lots, or near a

10

neighborhood eyesore.

2.) Replace old windows. Outdated windows age a home significantly, and you can often upgrade standard windows to vinyl for a reasonable $300 per window.

The average home has 8 windows, so this upgrade doesn’t cost nearly as much as you might think and it will make a huge difference to the value perceived by

prospective buyers. Key point to remember is that when buyers view a home they love, if they see it has older windows, they consider it a time consuming and costly headache. First time buyers have never replaced windows and often dramatically overestimate the cost to cure this issue. By replacing pre-listing you an actually save money. A well priced, move-in condition home will sell for far more than one with windows in need of repair.

3.) Assess your floors . If you have hardwood flooring, it’s worth the investment to have them refinished considering buyers put an extremely high value on them; you’ll get the most bang for your buck if they are refurbished. Carpets should be shampooed and replaced if they are stained or look worn. You don’t need to spend large amounts of money on the highest grade or most modern name but something inexpensive and neutral will certainly bring you a return on the investment. Even the smell of new carpet

will make buyers set your home apart from the comparables.

4.) Paint the trim. If you can’t afford the daunting task of painting your entire house, painting just the trim will still make a big difference when it comes to curb appeal.

Painting the whole house can be expensive, time consuming, and delayed by weather conditions; painting just the trim will give your home a fresher look. Interior trim is equally as important.

5.) Update fixtures. Keep an eye out for sales at home improvement stores and replace outdated lighting, plumbing and hardware fixtures. Simple replacing lighting fixtures and knobs in the bathroom or kitchen can update the entire look of the room. You can find many modern brand name fixtures online on contractor supply websites by just searching for terms like sale faucets, sale plumbing fixtures etc.

Lisa Johnson Sevajian is Vice President of a real estate firm in Andover, MA.

T H E G E O R G I A R E A L E S T A T E R E P O R T

August 2012

Path to Wealth

continued from front page

that is still not enough to call yourself rich. Just depending on investments to gain significant returns, you need time...a good bit of time.

To become wealthy, you need to consistently do the following: 1. Work to increase your active income -- income you earn through your time and efforts, such as wages, salaries, commissions, etc.

2. Put aside a portion of earnings for saving and investment FIRST. (Start with 10%, then increase over time) 3. Spend money wisely, get maximum value from every dollar.

4. Understand and manage your debt, don’t let debt manage you -- eventually eliminating debt altogether.

5. Become a disciplined investor -find a good strategy and stick with it.

Notice that investing is simply the last piece in this approach and arguably NOT the most important. Investing is simply a way to grow your accumulated savings. By itself, investing will not make you wealthy. Sure, you have read about those who grew small amounts in the stock market to large sums, compounding at 40 to 50% a year. But these guys were speculators and more than a few might be stretching the truth just to sell you something...

Most wealthy people will tell you they made their money in a business, their own or someone else’s. Then they invested their savings from those earnings to accumulate and maintain their wealth. Few people have the ability Warren Buffet does...nor the stockholder money to put to work. Even Buffet has only been able to average 19 to 20% a year return.

Those who buy real estate, fix it up and sell it are not investors. This is just their own business. The houses are their inventory. And I would challenge you to show me one of these flippers who has retired wealthy just flipping (also referred to as quick-turning) property alone. The only successful flippers are those who took a portion of their earnings from this business and invested

it...such as in rental properties.

Have a Plan How do you generate your earned income? How can you increase your earned income?

Earned income necessarily requires your time and efforts in generating it. This is where you must start and the primary focus of your plan to be wealthy. Time spent increasing your skills or otherwise figuring out how to increase your income is invaluable in building your net worth in the beginning.

The single-biggest financial mistake you can make is giving up your active income. Your active income is absolutely essential to building your wealth.

As you add to your savings, you need to determine your strategy for investing. This is not something to take lightly. You need to investigate several investment strategies before settling on the ones you will use over the long term.

I chose to invest in real estate because of leverage and it has done well for me over the years. But not everyone is cut out for this investment. You need to determine your own investment area and the strategy you will use.

Remember, You Are Responsible for Where You Are in Your Life Bottom line is that you have to have a plan if you want to become wealthy or even just have the freedom from depending on your active earnings to provide for you and your family. But then you have to work that plan. At first, you will see little results. You have to give it time. After five or ten years you will see you are well on your way to the desired goal of your planning. You may see it sooner, but most anyone can in that span of time.

Periodically, you need to reevaluate the points brought up above to assure you are doing all possible.

So you want to be wealthy or just gain financial freedom?

Then take action now. Don’t risk revisiting this topic a few years from now and being depressed that you did not start today!

GEORGIA REAL ESTATE REPORT

GRER Published

1999

by

J o h n A d a m s & C o m pa n y

John Adams CEO and Publisher johnadams@money99.com

Ranger Adams Chairman johnadams@money99.com

Jennifer Adams Editor-In-Chief johnadams@money99.com

Marjorie Adams CFO mbadams@money99.com

Production ASH Media LLC ash.media.llc@gmail.com

Circulation All-N-1 Distribution johnadams@money99.com

DISPLAY ADVERTISING:

The following pricing on a minimum of 6 insertions in a 12 month period. No placement guarantee. Black & White Rates:

Full Page = $995 Half = $795

Quarter = $595 Eighth = $395. For full color, add 50%.

Call 404-373-6000 for placement fees.

Real Estate Investor Groups: THE GRER is happy to publish news about your upcoming events, provided space permits. We can not offer you free advertising, but we do try extra hard to work with and support groups who help us distribute our publication to their members at all their meetings and sub-groups.

Call 404-373-6000 for details on how we can work together.

The Georgia Real Estate Report - 404-373-6000 - John Adams, Publisher

The Salvation Army The Salvation Army Offers:

Group homes, emergency shelters, and transitional living centers that provide housing on a temporary basis.

They: Serve the homeless by providing food and overnight lodging. Provide educational, counseling and vocational services to homeless and destitute individuals and families for extended periods. Address long-term specific issues of youth for whom family care is undesirable or unavailable. Education, counseling, health care and specific training seek to meet the needs of such groups as pregnant teens, emancipated minors, and wards of the juvenile court.

Please offer to HELP in GEORGIA by calling

Like investing in property, advertising in the Georgia Real Estate Report makes more than good sense.

Reach 30000 investors, owners, buyers & sellers and REALTORS with every monthly issue.

Call John Adams for a rate sheet and discuss the possibilities.

404.486.2917

404-373-6000

August 2012

since

THE GEORGIA REAL ESTATE REPORT

11

New Tax continued from front page may impose a 3.8% tax on some (but not all) income from interest, dividends, rents (less expenses) and capital gains (less capital losses). The tax will fall only on individuals with an adjusted gross income (AGI) above $200,000 and couples filing a joint return with more than $250,000 AGI. Applies to: Individuals with adjusted gross income (AGI) above $200,000 and to Couples filing a joint return with more than $250,000 AGI Types of Income: Interest, dividends, rents (less expenses), capital gains (less capital losses) Formula: The new tax applies to the LESSER of a) Investment income amount, or b) Excess of AGI over the $200,000 or $250,000 amount This new tax was never introduced, discussed or reviewed until just hours before the final debate on the massive health care legislation began. That legislation was enacted on March 23, 2010, more than a year after the health care debate began. This new tax was put forward after Congress was unable to agree on changes to current law that were suffcient to pay for the proposed changes to the Medicare program and increased subsidies to individuals and

businesses.

The new tax raises more than $210 billion (over 10 years), representing more than half of the total new expenditures in the health care reform package. NAR expressed its strongest possible objections, but the legislation passed on a largely party line vote.

The new tax is sometimes called a

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“Medicare tax” because the proceeds from it are to be dedicated to the Medicare Trust Fund. That Fund will run dry in only a few more years, so this tax is a means of extending its life.

A second new tax, also dedicated to Medicare funding, is imposed on the socalled “earned” income of higher income individuals. This earned income tax has a much lower rate of 0.9% (0.009).

Like the tax described earlier, this additional or alternative tax is based on adjusted gross income thresholds of $200,000 for an individual and $250,000 on a joint return. Like the 3.8% tax, this 0.9% tax is imposed only on the excess of earned income above the threshold amounts.

Another way of thinking about these new taxes is to think of the 3.8% tax as being imposed on a portion of the money that you make on your money — your capital (sometimes referred to as “unearned income”).

The 0.9% tax is imposed on a portion of the money you make on your labor — your salary, wages, commission and similar income related to earning a livelihood.

How might the 3.8% tax apply to the sale of a principal residence?

It would apply if the net gain on the

sale exceeds the $500,000 exclusion for joint filers ($250,000 for singles) and the taxpayer’s income also exceeds the adjusted gross income threshold.

For example, a couple bought a home many years ago for $100,000 in a city like San Francisco or Washington DC. In 2013, when they have wages of $100,000, they sell the home for $1.5 million. After subtracting the $100,000 cost of the home and the $500,000 exclusion, they have investment income of $900,000. That plus their wages puts them $750,000 over the $250,000 AGI limit, and they would owe $28,500 in extra tax.

If, however, a single person bought a house many years ago for $50,000 and sells it for $350,000 next year, after subtracting the $50,000 cost and the $250,000 exclusion, the investment income is $50,000. If this taxpayer has $150,000 or less of other income, no extra tax will be owed. But if he earns $150,000 of wages and has $20,000 of dividends and interest, then he would owe extra tax on $20,000, or $760.

For more information and examples of how this tax might apply to you, go to www.money99.com and search for “The 3.8% Tax Details”.

Zillow Calls Bottom For Home Values

Index based on ‘Zestimates’ shows first year-over-year quarterly gain since 2005

from Inman News Service .S. home values eked out their first year-over-year quarterly gain in five years during the second quarter of 2007, according to a report released today by online real estate marketplace Zillow.

Zillow’s second quarter real estate market report showed median home values up 0.2 percent at the end of June compared to a year ago,A to $149,300. The report also showed median home values have posted four consecutive months of year-over-year gains.

“After four months with rising home values and increasingly positive forecast data, it seems clear that the country has hit a bottom in home values,” said Zillow Chief Economist Stan Humphries in a statement.

The Phoenix metro Error! Hyperlink reference not valid. its leadership among U.S. metros with a 12.1 percent yearover-year median home value increase to $136,200 in the quarter anding June 30.

The Fort Myers, Fla., metro area took the second place spot with a 7.9 percent median home value increase for the quarter from last year to $136,000.

The Green Bay, Wisc., metro area, with

U

a 6.6 percent jump in median home values to $131,700, rounded out the top three.

Among the top 10 metros for annual price gains, all but one -- Denver, at $211,300 -- had index values well below the June U.S. median existing-home price of $189,400, as reported by the National Association of Realtors earlier this month.

The Zillow Home Value Index average for all 10 was $130,090.

Of the 167 metros Zillow tracks, 53 showed increases in estimated median home values from the second quarter of 2011.

The Zillow Home Value Index is built from automated valuation estimates (“Zestimates”) generated by Zillow for single-family residences, condominiums and cooperatives, regardless of whether they sold within a given period. At the national level, the Zillow Home Value Index reflects the median Zestimate of all homes in the U.S. expressed in dollars.

The Zillow Rent Index, launched in March and an additional component of Zillow’s real estate market report, shows a nationwide 5.2 percent year-over-year increase to $1,276 from a year ago.

T H E G E O R G I A R E A L E S T A T E R E P O R T

August 2012

Frozen Foreclosures continued page 5 Those lenders who have proceeded to process and sell foreclosures from their inventories before standards are in place are taking a risk.

While government agencies work on “global” standards, several federal agencies that regulate lenders have proceeded with their own regulations governing lenders. The Office of the Comptroller of the Currency issued standards last month for the depository institutions it regulates. The Consumer Finance Protection Board is working on mortgage service standards and other agencies may do the same.

At the state level, legislation and litigation are changing the playing field for lenders, causing delays in foreclosure processing.

In Florida, 340,000 foreclosures are in limbo pending a ruling from the state supreme court due early next year. The Oregon Supreme Court announced recently it will rule on the mortgage industry’s controversial loan tracking system and its role in foreclosures. In Nevada, a new state law took effect last October 1 that, among other things, makes it a felony and threatens to hold individuals criminally liable for making false representations concerning real estate title. Individuals are also subject to civil penalties of $5,000 for each violation. Nevada foreclosure filings have plunged as a result. Last week California passed legislation to go into effect January 1 that restricts dual-track foreclosures, where a lender forecloses on a borrower despite being

HOW DO YOU HOLD TITLE TO YOUR REAL ESTATE? “The Real Estate LLC in Georgia for 2012”

in discussions over a loan modification to save the home. It also guarantees homeowners a single point of contact at their lender with knowledge of their loan and direct access to decision makers, and imposes civil penalties on fraudulently signed mortgage documents. In addition, homeowners may require loan servicers to document their right to foreclose.

The drought of lower-priced homes, especially foreclosures, is radically changing markets like Phoenix, once the hottest of all investor markets.

“Investors are being priced out of the market,” Chris Broglia of Gilbert-based Solutions Real Estate told the Arizona Republic last week. “Buyers are being enticed by lower interest rates, and more regular homeowners see they can finally sell again.”

“The distressed market is drying up; normal sales are on the rise … both great signs for the Phoenix-area market,” said Matt Widdows, founder and chairman of Phoenix-based HomeSmart.

But not everyone is encouraged.

“Once this shadow inventory hits the market, housing prices may lower and create a new wave of strategic defaults and foreclosures,” Jon Maddux, CEO of YouWalkAway.com, told Bloomberg.

by John Adams

Stop Begging for a Lawsuit - Get Your Name Off Courthouse Records.

It’s the question you always hear at the closing table.

The lawyer says:“How do you wish to take title?”

What he really means is “Exactly how do you want your name to appear in the county records so that everyone in the world knows exactly what you own in this county?”

Take a moment right now - stop and think about how you hold title to your real estate.

Is your name and address showing as the owner of the property? I’ll bet that it is.

If you are like the vast majority of owners of single family homes in Georgia, you simply gave the attorney your full name and home address. That way, you figure, you can get the tax bill mailed to you in a timely manner so you don’t forget to pay on time.

Well, let’s stop and think for just a second.

1. The county already provides an annual estimate of the fair market value of each property titled in your name, and that is public information.

2. Calculating the current loan balance would take about three minutes per property if you know the original loan balance and interest rate, information that is recorded in the public records above your name on the security deed.

3. Subtracting the loan balance from the tax value on each property would give me the equity you have in every property you own, then I would have a really good idea of how much I could get out of you, if I had a reason to do so.

4. If you have several houses, all titled in your name, it becomes quite easy to add up the dollars available in a lawsuit.

5. And if I were your rental tenant, I might become tempted to find a legitimate reason to go after you for all you are worth, which I happen to have calculated accurately BEFORE I slipped on your front porch and took a fall.

6. Once I file that lawsuit against you, each and every property titled in your name is frozen until the lawsuit is finalized. Yes, that includes the house you live in. You can’t sell and you can’t refinance, and you can’t even qualify to get a new loan. All because you had all the property in your name.

7. If you think one of your tenants hasn’t already thought about this you are very probably wrong. In any case, do you want to take that chance?

8. The lawsuit will likely go on for years, as your insurance company drags their feet hoping for some kind of settlement. If the jury is sympathetic to your tenant, the judgement could easily exceed the million-dollar limit your policy has on liability.

9. If the judgement against you exceeds your insurance limit, you are personally responsible for the remainder. Everything you own, all your houses, cars, bank accounts, even your retirement dollars are at risk to pay this judgement off.

10. And this is all because you put ownership of each house into your own name.

Guess what, you made a serious mistake, and after the lawsuit is filed, it is too late to correct.

However, if the lawsuit has not yet been filed, you can take action now to solve the problem.

It’s easy, it’s fast, and it is extremely effective at stopping a judgement from spreading. But you have to take the action before the accident occurs.

If you want to learn the entire story and review all the forms and documents, you can order the entire package for only $99 with my iron-clad, money-back guarantee.

Finally, you’ll be able to sleep at night not having to worry about who is getting ready to steal from you everything you have earned for your family.

Only $99, which includes the manual and 3 hours of audio CDs. This package is unconditionally guaranteed to be right for you or I will gladly refund your purchase price with no questions asked. Fair enough?

Steve Cook is managing editor of Real Estate Economy Watch, and provides public relations consulting services to real estate and financial services companies and trade associations. See more information at RealEstateEconomyWatch.com .

Listen to John Adams

Every Saturday from Noon until 2 p.m.

August 2012

TO ORDER, go to www.Money99.com or call 404-373-6000

THE GEORGIA REAL ESTATE REPORT

13

Important Steps To Maximize Retirement Planning

by Jim Hitt

Proper planning is key to enjoying those retirement years. Lack of planning is a great way to end up eating peanut butter sandwiches every meal (yes, everyone loves peanut butter sandwiches still eating them every meal is a bit much!) and soaking your feet in that $10 toddler swimming pool trying to keep cool!

Many people have difficulty planning for retirement because they are not sure where to begin.

The Time Element The first thing that must be considered when planning for retirement is the “time element” in other words how old the person is now and how many years are left before they plan to retire. The longer the time between their current age and their retirement age, the more risk their portfolio can withstand.

Though a point of caution to keep in mind is that the goal is to grow the retirement account; thus, risk should always be carefully weighed as a big loss in the retirement account even at an early age is still a loss that one should avoid if possible.

Expected Spending Habits The second thing each person should consider is their expected spending habits during retirement. Keep in mind that lots of people underestimate this amount which leads to financial hardships in their retirement years.

Be honest about this when forecasting those estimates. Realistically, most people ‘who have planned properly’ spend more each year during those retirement years than they spent each year they worked. The reason for this is pretty simple; retirees have more time to do the ‘fun things’ in life and thus tend to spend more money during their retirement years.

Pre-tax and After-tax Retirement Accounts The third consideration for taxable retirement accounts is to be sure each person is forecasting their funds based on those after tax distributions. This may sound like the easiest step in planning…still it is difficult to know what the future tax rates will be…a good rule of thumb is to overestimate the tax burden and plan for that overestimated amount. Of course, those who have Roth IRA accounts will not have to worry about this as they paid

companies, precious metals and much more!

The Power of Compounding A final point that is often overlooked is the power of compounding interest. A person who participates in hard money lending within their IRA generally receives interest rates between 7% and 10%. Most banks are currently offering less than 1% interest on savings accounts and 3% or less on CDs. Here’s a comparison of how that interest compounds over time using $50,000:

their taxes on that account when they funded it and will not have to pay taxes on any of their distributions.

Diversification The fourth important rule of thumb is to diversify their retirement portfolio.

Diversification helps to protect the retirement fund from the ups and downs of economic times. At American IRA, LLC, people can use their self-directed retirement accounts to invest in real estate, private lending, limited liability

$50,000 at 1% Compounded Once Annually for 30 years equals $67,392.45 $50,000 at 7% Compounded Once Annually for 30 years equals $380,612.75 It is easy to see the growth potential of investing with a retirement account versus letting funds sit in a savings account!

Careful planning is critical to the onset of a happy and fulfilling retirement.

Self-directed IRAs provide people with the largest amount of flexibility, choice, and

control over what they invest in and how much risk they put their portfolio in. When people wonder what to invest in, it depends on what they are currently doing; what their area of expertise is; what their comfort level is with risk. If they are comfortable with real estate investing, then it makes sense for them to use their real estate expertise to grow their retirement funds.

For example, they can buy a rental property within their retirement fund and allow that property to contribute rental income to the retirement fund. At the same time, they can keep some mutual funds and perhaps even some CDs in their retirement account. This mix would give them a nice safe yet diverse retirement portfolio.

Another important point that many people overlook is their loved ones. I have seen many parents and grandparents who want to help their children and grandchildren with college tuition and thus sacrifice their retirement funds to do so. Coverdell Education Accounts are a great way of saving for your loved one’s tuition expenses.

Another little known fact is that Roth IRAs can be used for tuition expenses. I urge everyone to think through not just your retirement plans, but also, what you may want to do for your loved ones during your retirement and what you want to leave your loved ones in your Will. Thinking this through early and building your retirement account to cover all those things will allow you the happiest retirement years.

About Jim Hitt: The author founded American IRA, LLC in 2004 in Asheville, NC. He can be reached at 866-750-0472.

Road to Freedom continued from front page sufficient moral defense of free enterprise.

We’ve won the material argument. But when it comes to the moral argument, we’ve let the other side win by forfeit.

We have our own moral case and we must make it with full force, before we introduce mere material facts. Free enterprise doesn’t matter just because it’s made America the richest country in history. It matters because it has created an unparalleled system of human flourishing that is a magnet for people all over the world. It matters because it treats people fairly, based on their achievement and not their relationship to the government. It matters because it has lifted people out of desperate poverty by the billions.

Americans learn early on in school that the Declaration of Independence claims for us as our birthright the rights to “life, liberty, and the pursuit of happiness.” The Founders used this phrase because they wanted to make a moral

14

case for our nation’s struggle for independence.

But what does the right to pursue happiness mean? It means earned success: The right to define and seek our happiness as we see fit, through creating value in our lives and in the lives of others. For some people, this leads to prosperity in business. But for others it means saving souls, helping the vulnerable, raising kids who become good men and women, cleaning up the environment, or creating beautiful art. Either way, it doesn’t mean mindlessly pursuing money for its own sake.

Earned success from free enterprise is the only way we can achieve true fairness. Fairness is not “spreading the wealth around,” taking that which people have earned and giving people what they haven’t. It means creating a system of opportunity for all, allowing people to define the terms of their success, and letting them achieve it only through their own hard work and merit.

And who benefits from this system? Many politicians today tell us only the rich do. Don’t believe it.

Since 1970, the percentage of the world’s population living on a dollar a day or less has decreased by 80 percent. Is this because of the fabulous success of the United Nations or US foreign aid? Of course not. It is because of globalization, free trade, and entrepreneurship.

In short, it is because of free enterprise, which is truly America’s gift to the world’s poor.

If you care about free enterprise, then I’m not telling you anything new. Those of us who understand why free enterprise matters know that it provides the greatest freedom and the most opportunity for people because it allows us to give our lives meaning and purpose, and leads us to act in a way that lifts everyone up.

But we’ve too often forgotten to make this argument, instead focusing on materialist arguments related to economic efficiency.

This has allowed statistics to claim that their policies are somehow fair, whereas our are greedy and materialistic. We know that this simply isn’t true. But we’ve vacated the moral high ground, and that’s why we lose the argument. Our challenge is to make that moral case, make it first, and make it proudly.

When you put free enterprise and statism side-by-side, there’s no question which system leads to greater happiness, which is fairer, and which best helps the least among us. We know it’s free enterprise, and we know why this is so.

Our challenge is to make the case that comes from our hearts.

ABOUT THE AUTHOR: Arthur C. Brooks is president of the American Enterprise Institute and author of “The Road to Freedom: How to Win the Fight for Free Enterprise” (Basic Books). Learn more about making the moral case for free enterprise and why it matters at arthurbrooks.aei.org.

T H E G E O R G I A R E A L E S T A T E R E P O R T

August 2012

R eal E state B usiness D irectory The Real Estate vendors on this page have been recommended by readers of the Georgia Real Estate Report, but are not endorsed by this publication or by John Adams. If you contact any of these vendors, please mention you saw them in the Georgia Real Estate Report.

Dunwoody Tax & Accounting Group

Carpet Cheap Flooring Steals & Deals

Jeff Thompson Appraisals

Soteria Services, Inc.

http://www.kddcpa.com/

http://www.carpetcheapusa.com/

http://www.jtappraiser.com/

http://www.soteriatax.com/

404-375-1566

404-684-2700

678-403-1963

678-799-7861

Angel Oak

Universal Refinish, LLC

R.S. Mechanical Services HVAC

American Family Insurance

Home, Auto, Life, More

http://www.angeloakcapital.com

http://www.universalrefinish.com/

http://www.rsmechanicalatlanta.com/index.html

Full Service Insurance Services

404-844-5521

770-630-5132

678-305–0255

770-250-1910

Barnard Agency Inc - Allstate

Southern Fidelity Associates, LLC

Harlan & Associates, LLC

Georgia Roof Inspections

http://www.allstateagencies.com/DeanBarnard/Welcome

sfallct@gmail.com

http://www.harlan-law.com/

http://www.georgiaroofinspections.com/

678-455-8606

770-500-2319

770-817-1012

404-246-0104

Advanta IRA Administration, LLC

TriPoint Funding, LLC

ABC Painting & Home Improvement

Allgood Pest Solutions

http://www.advantairagroup.com/

http://tripointfunding.com//

(No Info for website)

allgoodpestsolutions.com

800-416-8736

678-382-1224

404-964-3266

770-339-4500

Your Intown Home

A direct hard money lender

Platinum Resource Group, LLC

Property Management

Paces Funding

Real Estate

Home Buyers of Georgia

Creative problem solving experience

http://www.yourintownhome.com/

http://pacesfunding.com/

http://www.prgnexus.com/

http://www.ibuyga.com/

404-855-1430

404-814-1644

404-453-9066

404-377-1718

Atlanta Carpet Services, Inc.

Real Estate Works 4 U

Networth Realty of Atlanta, LLC

Garmon Home Inspection Services, Inc

Tax & Accounting

Appraisals

Carpet & Flooring

Lending Services

Contractors

Insurance

Insurance

Lending Services

Consulting

Tax & Accounting

Roofing

Legal Services

Pest Control

Painting Services

Providing carpet, wood, vinyl, and tile

Property Tax Appeal Services

A residential wholesale brokerage

http://www.acscarpet.com/

http://www.lowerpropertytax.org/

http://www.networthrealtyusa.com/

http://www.garmonhomeinspection.com/

770-322-7373

678-971-3118

678-321-6061

770-368-8151

Atlanta Capital Funding

Goldmine Properties

SafeGuard Communities

DNA Home Solution

professional home inspections

Real Estate

Turn key real estate deals

residential or commercial renovation

http://atlantacapitalfunding.com/

http://www.bestbuyhomesllc.com/

http://www.safeguardcommunities.com/

http://www.dnahomesolution.com/

404-794-5322

770-338-2994

404-969-1223

404-557-8885

privately funded hard money lender

Real Estate Service Directory Rates:

1x = $250, 3x = 200/mo, 6x = 150/mo, 12x = $99/mo, fully paid in advance. Wording or Layout Changes are $50 each.

Wording is space limited. No placement guarantee. Black & White Only in PRINT edition. Call 404-373-6000 for details.

August 2012

THE GEORGIA REAL ESTATE REPORT

15

REO

TOUR OF HOMES

T he ALL NEW L andlord S trategies & S ecrets S eminar

Saturday, August 11 • 9:30 a.m. til 4:30 p.m.

Saturday, August 25 • 11:30 a.m. til 3:30 p.m.

BANK-OWNED

If you’ve ever considered buying a foreclosed property, whether as an investor searching for your next great deal, or as a buyer looking for the best price on your primary residence, you know that BANK-OWNED REO HOMES are the best bargains in Georgia. My one-day TOUR OF HOMES will both educate you in the process and shorten your search by presenting you with the best foreclosed properties available on that day. Here’s what you’ll learn: We will start our day at the MetroVest Conference Center in Stone Mountain, Georgia. At 9:30, we will have an educational session consisting of an overview of the buying process, how to negotiate with lenders, how to submit an offer, how to estimate property value,and how to renovate a distressed property. We will also talk about acquisition and permanent financing, as well as popular exit strategies.

About 11 a.m., we will hit the road, either in a bus or a caravan of cars. Each of the homes we visit will be available and on the market, or in the process of rehab to use as an example.

Prices of the homes on the Tour will be primarily from affordable lower priced homes that are great investments for FIRST TIME HOMEBUYERS and INVESTORS seeking Rental and Rent-To-Own Properties. Agents, if you wish to bring clients, they are welcome.

Around 1 p.m., we will return to the Conference Center for a catered luncheon, and the opportunity to participate in the John Adams Radio Show.

After lunch, we head out again to see more houses. At each house, the tour leader will be pointing out the advantages and challenges of each property, as well as leading you to a better understanding of the cost of an appropriate

rehab for that property.

Although these are only estimates, you can get a pretty good idea of what each property is worth, what it should be purchased for, and what its value should be once it has been cleaned up. Knowing all this in advance will really help you sharpen your pencil and make a more informed decision on which property you want to buy. As of the day before our Tour, every property on the Tour will be available for purchase. However, once discovered the best properties sell quickly. So if you are serious, bring a checkbook with you!

We will visit approximately 10 homes on our Tour. Be sure to bring a pad to take notes on each home as well as a camera to record photographs of the homes you Tour. You will be spending a limited amount of time in each home, so taking good notes and pictures will help you keep track of which homes you think will suit your needs.

Many Tours may have as many as 20 or more cars traveling in the Tour caravan, so if you are bringing guests to accompany you on the Tour, using one vehicle per group is advisable. If you are bringing any potential purchaser who has not pre-registered for the Tour, they will be required to register on site in order to be included in the Tour. As always, these Tours are free of charge and with no obligation to ever invest in real estate.

Several experienced rehabbers and I will be with you as we visit and evaluate a number of homes. There will plenty of time for questions At the end of the day, we will meet up again at the Conference Center, where will analyze each property again, and learn what the group feel like regarding pricing.

This fast paced three hour program is designed to help all owners, landlords and property managers improve the occupancy and profitability of their residential rental properties. Whether you own or manage one unit or a hundred, you’ll come away from this program with new ideas for generating revenue where none existed before, and with strategies for filling your vacancies faster and with better tenants.

1. Rent Your Property & Keep It Full, Getting the property ready to show, Rent, Security deposits, and leases; Marketing your property for free; Handling the prospects and showing the house; Applications & credit reports.

2. Follow The Money: QuickBooks & Taxes The value of recording your expenses; Quickbooks the easy way to do it; Normal & reasonable deductions; Creative & innovative deductions; Component depreciation ideas; First time home buyers tax credit strategy.

3. Dealing With Tenants for Maximum Revenue.

Avoiding a lawsuit; Handling written communications; Managing verbal communications; Lead, Asbestos, Radon & Mold; Keeping good tenants year after year; Raising the rent annually; Managing move-outs; Handling Problem Tenants.

A full manual covers all the topics presented, and allows you to select those ideas and techniques which best apply to your rental property. Agents get 3 hours continuing education.

Saturday, August 11 • 9:30 a.m. til 4:30 p.m.

Saturday, August 25 • 11:30 a.m. til 3:30 p.m.

4329 Coleman Drive, Stone Mountain GA 30083

Embry Hills Shopping Center • 3583 Chamblee-Tucker Road, Atlanta, GA 30341

MetroVEST Conference Center Only

$

69 per person, including lunch

Just off Memorial Drive outside 285. Close to Indian Creek MARTA Station

S&S Cafeteria Conference Center Only

$

69 per person, lunch available

Just outside 285 on Chamblee-Tucker Road at southern end of Northcrest Road.

Register at Money99.com. Register for Both only $99!

16

T H E G E O R G I A R E A L E S T A T E R E P O R T

August 2012