By Amy Hoak
From MarketWatch

The dirty and tarnished bracelet sold for 50 cents, but cleaned up to reveal a sterling silver and 18-carat gold piece of jewelry worth several hundred dollars. It’s one of Jenn Callum’s best garage-sale finds, and an example of why — even in the age of the online auction — many treasure hunters still seek out traditional rummage sales.

Call it a garage sale, a yard sale, a tag sale or a boot sale, but don’t call it a relic that online auctions have rendered obsolete.

In fact, the Internet is increasingly complementing traditional garage sales, making it easier to connect buyers and sellers who once relied solely on newspaper advertisements and roadside signs. Many newspapers post sale listings online and other Web sites try to help sellers ramp up foot traffic by allowing them to post information about their events.

A greater amount of pricing information on the Web via online auction sites also is creating more savvy “garagers,” said Callum, whose Web site, www.garagesale-guru.com, offers information for buyers and sellers. Some shoppers search the residential sales specifically to find items that will fetch a much more attractive selling price online. Visit the garage sale Web site.

And despite the ability to point and click to purchases from home, many shoppers of second-hand gems simply crave the sensory experience that online auctions aren’t able to provide, said John D. Schroeder, author of “Garage Sale Fever!,” published in 2005. Visit the Garage Sale Fever Web site.

“Garage-sale buyers thrive on the thrill of the hunt and like to see, touch and ask questions about their purchases — and even dicker on the price — plus take the item home immediately from a garage sale. That does not happen in online auctions,” he said.

Many municipalities charge a nominal fee for a permit to hold a garage sale. But there is no national database that tracks the number of sales or the amount of money that clutter-clearing homeowners reap from them. Judging by the growth of online sites that focus on the sales, business is booming.

Searching for sales

On many Saturday mornings, Callum heads out with a clipboard of garage sale addresses found on the Internet, arranged geographically to make the most of her time. The 39-year-old from Toronto can hit dozens of sales in a day, deciding with a glance if they’re worth a stroll through.

“The online garage-sale-listings sites are slow to catch on, although they are certainly gaining in popularity,” Callum said. Online newspaper ads are usually her sources of choice.

But newspapers are not the only sources for information on garage-sale whereabouts. Garage-sale specific sites like Garage Sale Hunter.com also offer free listings to visitors. Check out Garage Sale Hunter.

Diana Matheou, a 33-year-old from Cleveland, created Garage Sale Hunter with her brother in 1999 as a pilot project for their information-technology firm, E-ffective Services Ltd. Details on more than 1,000 garage sales are viewable on any given day during the peak season of June through September, Matheou said.

At the time the site launched, classified ad Web sites had been created to help sell cars and homes, but the pair didn’t know of one that helped advertise garage sales.

“There wasn’t anything targeting this market,” Matheou said.

The site allows visitors to search not only by a sale’s location but also by what will be sold there. Visitors can have e-mails sent to them when sales come up that meet their criteria. Next up on the development list: a tool that will map out a garage-sale circuit for shoppers.

Listings of garage sales have also grown substantially at Craigslist.org in recent years, said Susan MacTavish Best, a Craigslist spokeswoman. In April 2002, a couple of months after the listings first started appearing on the site, 2,447 notices were posted there; in April 2006, 46,129 garage sales were advertised on Craigslist. By April 2007, notices for about 120,000 garage sales were posted during the month.

“The Craigslist community is really about people connecting with other people in their ‘hood, usually in person,” Best said. More than 90% of Craigslist sales and transactions take place within the same community, she added. “With that in mind, it’s really an obvious choice for people to advertise for free their garage sales on the site, as they know locals will see the ad, read the ad and come to the sale.”

All of the online options are bringing an end to the days of searching in the local paper and circling the sales you want to visit, Schroeder said.

Priced to profit

At the same time, online sites like eBay are assisting in the pricing of specific items.

“I had an old plate from the early 1900s I got from a garage sale, paid $1 for it, and got all the info I needed on the Internet to find out the entire background of the plate,” Schroeder said. In the end, he estimated that the plate was worth $65.

Looking around online can help sellers be smarter when deciding asking prices for their merchandise. Savvy buyers will move quickly on items that are greatly underpriced — and can turn around a hefty profit in some instances.

Callum, for example, once spied a Hummel figurine priced at 50 cents at a garage sale. Another shopper got to it before she did, and knew it was a steal — the collectibles fetch handsome resale prices, and at least one Web site, www.hummelexchange.com, has a corner that connects buyers and sellers looking for specific pieces.

But the extra information available to sellers can have a downside, Callum said. She has been to sales that seem more like roadside shops than garage sales, with noticeably higher prices.

When to have a garage sale, when to sell online

Can’t decide whether to unload your unwanted items online or at a garage sale? Fees for both are nominal, but your choice can determine what kind of profit you’ll rake in.

Schroeder offered the following tips for people deciding what method to use.

When to sell online

• When you have an item that requires a national prospects rather than local. It may be a specialized collectible that needs a wide audience to sell.
• If the item is small and easy to ship.
• If the item does not have any flaws or imperfections that prospects would need to see.
• Sell online if you can offer sharp and multiple view photos of what you are selling.
• If you want maximum money. You usually don’t get into bidding wars at garage sales.
• If you have some time to wait and let a buyer find your item. Online buying can require patience for seller and buyer to find each other.

When to sell at a garage sale

• When the item is common and does not justify a national ad to find a buyer. Examples are CD players, toasters, books and videos.
• When the item is large, heavy or common and would be a pain to ship to someone. Examples are a nice sofa, or a kitchen table and chairs.
• When you want to get rid of clutter and money is a secondary factor.
• When the item has imperfections that a potential buyer would want to see before buying. This includes electrical items that buyers can plug in and see it work.
• When you enjoy the interaction of meeting new people and selling.
• When you want to get rid of clutter quickly.
• If you have the time and energy to organize and hold a one-day sale.
• If you have lots of items you want to get rid of all at once.Email your comments to rjeditor@dowjones.com.

Thank You:

According to Freddie Mac’s Primary Mortgage Market Survey for the previous week, the market has rolled back a small portion of the large increases in mortgage rates that were recorded over the prior five weeks.

The 30-year fixed-rate mortgage (FRM) which had increased from 6.15 percent to 6.74 percent between May 10 and June 14 retreated to 6.69 percent in the most recent week. Fees and points increased from 0.4 to 0.5 for the week.

The 15-year FRM decreased six basis points from its 2007 high of 6.43 percent the previous week to 6.37 percent. Fees and points increased from 0.4 to 0.5 for this product as well.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 6.31 percent for the week with an average 0.6 point. The previous week it averaged 6.37 percent with 0.5 point.

The biggest roll-back was in the one-year Treasury-indexed ARM which averaged 5.66 compared to 5.75 the week before. Points were unchanged at 0.7.

“Mortgage rates eased this week due to market concerns that the housing market will be a longer drag on the economy,” said Frank Nothaft, Freddie Mac vice president and chief economist. “May’s housing starts fell for the first time in four months, while homebuilder optimism in June fell to a sixteen-year low.”

“Thus far this year, the housing sector directly shaved 0.8 percentage points off real economic growth in the first quarter, compared to the 1.2 percentage points it lopped off growth in the second half of 2006.”

Some of the usual information from the Mortgage Bankers Association survey was unavailable due to problems on their website. However it was reported that the interest rate on a 30-year FRM was unchanged at 6.60 percent for the week ended June 22.

The average contract interest rate for the 15-year FRM was down from 6.28 percent the previous week to 6.24 percent.

As with the Freddie Mac survey, the greatest change was the average contract interest rate on the one-year ARM which dropped 19 basis points to 5.51 percent.

Applications for mortgages were down 2.5 percent for refinancing and 4.9 percent for home purchases. Overall application volume was up 16.3 percent compared to the same week in 2006.

Refinancing represented 38.7 percent of all mortgage applications compared to 38 percent the previous week and adjustable rate mortgages gained a teeny bit more mortgage share at 20.4 percent of all mortgages compared to 24.3 percent a week earlier.

Thank You:

The Federal Reserve Board released the final statement of federal regulatory agencies on subprime mortgage lending recently. The release was done on behalf of the Federal Reserve’s Board of Governors, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, Office of Thrift Supervision, and the National Credit Union Administration (the Agencies.)

The guidelines were first published for comment in March of this year. The proposed statement provided guidance on the measures lenders should use in assessing a borrower’s ability to repay a loan and advice to consumers to protect them from unfair, deceptive, and other predatory loan practices and to insure that consumers are provided with clear and balanced information about the risks and features of these loans. The Agencies specifically requested comment about whether subprime products always present inappropriate risks to institutions and/or consumers; whether the proposed guidelines would unduly impinge on the ability of subprime borrowers to refinance their existing loans; whether the principals of the statement should be applied beyond the subprime adjustable rate mortgage (ARM) market; and whether it was appropriate to limit the use of prepayment penalties.

During the public comment phase the five agencies collectively received 137 unique comments from financial institutions, industry groups, consumer and community groups, government officials, and members of the general public.While the Federal Reserve described the comments as “generally supportive of the Agencies’ efforts to provide guidance”, many financial institutions were concerned that the proposed guidelines were too restrictive while consumer and community groups stated that they did not go far enough in addressing their concerns about subprime products.

Specifically financial institutions and their trade associations objected to a requirement that ARMs be underwritten at a fully indexed rate with a fully amortizing repayment schedule on the basis that these loan products are not always inappropriate and can be useful as a way to repair or establish a credit history. These lenders and industry group responders also objected to the lack of clarity in the scope of the statement and the definition of subprime in fear that the restrictions might creep into the non-subprime market. Lenders were also concerned that the statement came to close to equating the term “subprime” with the concept of predatory lending.

Another concern among the financial institutions was that the consumer disclosure requirements of the proposed guidelines might cause borrowers to suffer information overload and would put federally regulated institutions at a competitive disadvantage. This concern was mirrored by consumer and community groups who felt that the proposed statements and disclosures should apply to all lenders, not just the federally regulated institutions. Both complaints may be moot as both the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators have stated their intent to develop “a parallel statement for state supervisors to use with state-supervised entities.”

Financial institutions and consumer groups differed over portions of the proposed statement dealing with subprime borrowers’ ability to refinance with consumer groups stating that allowing borrowers to refinance into another unaffordable ARM was not acceptable while lenders commented that the proposed statement would unduly restrict borrowers’ ability to refinance.

Consumer groups were also concerned that the rules regarding reduced documentation or stated income loans did not necessarily encourage lenders to allow borrowers to document income and thereby pay a lower interest rate and were an invitation for fraud. Financial institutions argued that the rules should allow for mitigating factors where borrowers were hard pressed to provide full documentation.

In response to these comments the agencies have taken the following steps in issuing the final statement:

• The final statement retains a focus on subprime borrowers while noting that institutions should look to the statement principles in offering ARM products to non-subprime borrowers.
• The statement clarifies that subprime lending is not synonymous with predatory lending.
• The general guideline of qualifying borrowers at the fully indexed rate at a fully amortizing payment schedule remains in the final statement, but additional information to clarify how institutions should assess borrowers’ repayment capacity is included.
• Stated income and reduced documentation should be accepted only in the face of mitigating factors that clearly minimize the need for verification of repayment capacity.
• To address concerns about workout arrangements and refinancing the Agencies have incorporated a section on such arrangements in the final text of the statement.
• The Agencies revised the statement to address prepayment penalties, stating that the period during which these apply should not exceed the initial reset period and that borrowers should be allowed a reasonable period of time prior to the reset date to refinance their loans without penalty.
• The Agencies are working on illustrations of the type of consumer information it feels appropriate which will not be burdensome to financial institutions or to the consumer.

The complete final statement can be read here.

Thank You:

By Marshall Loeb
From MarketWatch

These are tough times for home sellers. If you’re one of them, it can be tempting to launch into a series of home renovations to make your home more desirable.

But be discerning about your choices — certain renovations can actually decrease the value of your home. Money magazine suggests avoiding these four renovations at all costs:

1. A swimming pool. If you don’t know this already, a swimming pool is a liability, not an asset. (Unless you live in a hot climate; in the Southwest, a pool can increase a home’s value by 11%.) But if your home is in Oregon or Illinois, the cost of insurance and pool maintenance is a buyer turn-off. Families with small children especially avoid homes with pools.

2. Home addition. Sure, an addition to your home will add inside space. But how will it look from the outside? Many home additions can look boxy or unnatural with the rest of the house. If you do go for an addition, make sure it is well designed.

3. Trendy finishes. Don’t fall for the latest style or trend when it comes to renovating. As soon as it’s out of style, it will stick out — and look bad. One trend that will probably last for a while is custom paneling in maple or mahogany for home appliances. Otherwise, stick to timeless, classic renovations.

4. A Jacuzzi. Nothing beats a good soak after a long day. But not everyone loves a giant tub with multiple jets. Instead, try a rain showerhead if you want to add some luxury to a bathroom.Email your comments to rjeditor@dowjones.com.

Thank You:

By Lauren Baier Kim

The recent softening in the U.S. real-estate market after years of double-digit percentage growth in home prices may make it scarier than ever to buy a vacation home.

Some regions are scary because, even with the recent dip, they seem prohibitively expensive. Elsewhere, buyers may have understandable fears that places that seem affordable will only become more so as prices continue to fall.

The editors at RealEstateJournal.com set out to identify potential vacation-home deals that would assuage the most nervous Nellies. We looked for appealing locales across the U.S. where prices rose at a rate well below the national average of 84.3% between the second quarter of 1996 and the second quarter of 2006, and have above-average employment outlooks according to data from Economy.com.

After working with Mike Sklarz, head of global research at New City Corp., a real-estate merchant banking and investment management firm based in Tokyo, to crunch the numbers, RealEstateJournal then investigated the areas further, looking at things like the availability and selection of vacation residences, and proximity to recreational and cultural offerings.

Here’s our list of 12 tempting locales:

• Bath/Beaufort County, N.C.
• Blairsville, Ga.
• Clarksville, Va.
• Cloudcroft, N.M.
• Dadeville, Ala.
• Driggs, Idaho
• Eureka Springs, Ark.
• Heber City, Utah
• Helen, Ga.
• Jemez Springs, N.M.
• South Padre Island, Texas
• Steamboat Springs, Colo.

See snapshots of these areas, including details like vacation-home prices, local attractions, the rental market, data on past housing prices and projected employment growth.

Read how RealEstateJournal and Mr. Sklarz came up with the list in the methodology.

Also this week, June Fletcher will take a look at what community and home factors to consider when making a vacation-home purchase, Jane Hodges will share three money-saving ways to get into a vacation property, Lauren Baier Kim will look at high-altitude mountain retreats and Sheree Curry will profile a couple who sold their Vermont ski and summer retreat at the full asking price.

– Dana Mattioli contributed to this article.

Email your comments to lauren.kim@wsj.com

Thank You:

By Jeff D. Opdyke
From The Wall Street Journal Online

Falling home prices and rising property-tax assessments are fueling a grass-roots tax rebellion.

From coastal Florida to the shores of Hawaii, homeowners are lodging record numbers of appeals, fighting against rising assessments that are, in many cases, pushing up annual tax payments significantly.

Residents of Lee County, Fla., filed nearly 2,900 appeals for the 2006 tax year, more than triple the previous year, after assessments increased by an average of 39%. In Erie County, Ohio, 732 property owners appealed their recent assessments, where typically there are fewer than 200 appeals.

So many property owners filed appeals in Bonner County, Idaho, last year — an estimated 2,732, vs. 100 the prior year — that they swamped the County Board of Equalization. At one point, the board was hearing appeals every 15 minutes for 11 hours a day, during the four-week window allotted to the work. It had to request three extensions from the state and still could only absorb 16% of the caseload.

In Honolulu, property owners filed a record 7,300 appeals this year after four consecutive years of double-digit increases in property-value reassessments.

The problem: Tax assessments didn’t keep pace with soaring property values in recent years. Now, assessments are catching up at the worst possible time, just as property prices soften. In theory, municipalities are supposed to roll back tax rates to offset rising property assessments. But many don’t do it regularly, or do so to a lesser degree than they should, says Kenneth Wilkinson, the appraiser for Lee County.

“In today’s market, I’d be lucky to get within $30,000 or $40,000 of my assessed value,” says Jack Shearer, a real-estate broker in Fort Wayne, Ind., who a month ago began the process of appealing a recent reassessment that valued his home at $245,000. Mr. Shearer says he brokered the $185,000 sale of a house in his neighborhood four months ago, yet the assessed value on that house recently came in at close to $220,000.

Under Indiana law, assessments are based on sales data that is two years old. Thus Mr. Shearer’s house was valued based on data from 2004-05, when, he says, prices “were much stronger.”

Indeed, Allen County, home to Fort Wayne, has seen a surge of appeals in recent years, sparked by a statewide move in Indiana, as with other parts of the country, to assess properties based on current market value instead of cost.

That is leading to “sticker shock,” says Stacey O’Day, Allen County’s assessor. The system “is capturing in one swoop the increase in market value that happened over five years.”

It is happening despite the fact that lawmakers in states such as Florida, New Jersey and Nebraska are proposing to cut property taxes or cap increases, or are offering rebate checks to homeowners to take some of the sting out of rising property reassessments.

Because property taxes are a local affair, national data are tough to come by. The National Taxpayers Union, an advocacy group in Washington, estimates that 30% to 60% of all homes are overassessed. The group says homeowners who lodge appeals win a reduction in their home’s assessed value 30% to 50% of the time.

The reassessment mania has spawned a mini-industry of consultants and mass-mailings offering to help people cut their bills. Last month, Protest, a property-tax consulting firm in Arlington, Texas, sent mailers to its clients and others, reminding them that they have just 30 days to challenge their latest assessment.

The firm charges a $150 fee, plus a “success fee” of between 50 cents and 75 cents per $100 of market-price reduction on a home. Tim Spoonemore of Protest says that while most people “can do this on your own, it’s time-consuming when you have a hectic schedule.”

Indeed, tax experts generally say there is little reason to hire help when appealing an assessment, particularly given that the fee can wipe out much of any first-year savings.

A surprising number of homeowners don’t realize they can fight the assessment. “It’s the best-kept secret,” says Marc Vorchheimer, a financial planner in Nanuet, N.Y., who is gearing up to help several clients appeal their assessments in May.

Assessors and appraisers say they recognize that mistakes are certain to occur. After all, values are generally based on mass assessments of tens or hundreds of thousands of properties in a short period.

Joe Young, a commissioner in Bonner County, Idaho, says, “In 86% of the cases we were able to get to, we saw that assessors had made a mistake.” His own assessment surged to $343,000 from just less than $200,000, while his neighbor’s, with similar house and land, rose to just $285,000. “That’s what aggravates people — they see these inaccuracies,” Mr. Young says.

The best way to win a reprieve is to back your case with evidence.

James O’Brien, a homeowner in Greenwich, Conn., hired an independent appraiser to assess his home and spent a few hours taking photos and finding a topographical map of his property to prove to local officials last year that the assessment of his property failed to account for major drawbacks.

True, he told local officials, his house does sit on the water, which pushes up his assessed value. “But the assessment didn’t account for the fact that the property is on a busy road, that part of it has a severe slope and that, while the neighborhood is zoned single-family, it is actually a multifamily area,” says Mr. O’Brien, a real-estate broker at Sotheby’s International Realty. “Those are recognized minuses that have to be taken into account.”

The local tax-review board agreed and reduced Mr. O’Brien’s assessed value by about 15%. He calculates his property-tax savings at between $750 and $1,000 a year.

Facts to help make your case include a home’s square footage, the number of rooms and the size of the garage, basement and acreage in cases where the assessed value is based on flawed dimensions.

Data on comparable sales in the area can help bring your value down, if your assessment is higher than the selling prices of nearby homes.

Shyam Reddy, a lawyer in Atlanta’s Buckhead district, went through two rounds of appeals but ultimately got a reassessment that he expects to save him $4,000 to $5,000 annually in property taxes.

“That kind of savings,” he says, “is worth the effort.”

Email your comments to jeff.opdyke@wsj.com.

By June Fletcher

Question: I am 28 and purchased a home “as is” in May. As I was doing some upgrades, I had the city inspect a power-panel upgrade. The inspector noticed the garage conversion and a covered patio that didn’t receive city permits. These were built before I purchased the house and I was not told of the permit issues. The inspector called the power company and told it to not connect the power until the conversion and the patio were permitted and brought up to code. Contractors I’ve contacted say it will cost around $30,000. I don’t have the money. Do you have any advice?

– Daniel Rivas, Santa Fe Springs, Calif.

Daniel: Many homes, if not most, are sold “as is.” In some places, “as is” is included within the standard boilerplate in real-estate contracts. The language simply means that the seller won’t be making any improvements and is selling the house in its current physical condition. Fair enough, since most homes accumulate some wear and tear over the years.

But when sellers sell homes “as is,” that doesn’t give them the right to foist hidden problems on you, which is why the law in California, and most other states, requires sellers to give you a Real Estate Transfer Disclosure Statement. Anything wrong with a house that you couldn’t easily discover on your own, including work done without permits, must be listed on this form — so take a look at it now. If the sellers disclosed the illegal garage conversion and patio, you’re out of luck — you were properly forewarned. But if they didn’t, you may be able to sue them to recover the costs of the repairs. Check with a local real-estate attorney to discuss your options.

Unfortunately, though you quite properly had the city inspect your power-panel upgrade before you moved in, it sounds as if you didn’t hire a professional home inspector to look at the house before you purchased it. Hiring a home inspector isn’t required by law, but I strongly recommend that every buyer do so, even when buying a new home. The cost usually runs around $300 and helps protect buyers from expensive situations like yours. Any competent inspector would have noticed that parts of your house weren’t up to code and would have been able to alert you before you bought it, even if these items weren’t listed on the disclosure statement. And if the inspector wasn’t competent and simply overlooked the code violations, his or her errors and omissions insurance would cover your costs.

– June Fletcher is a staff reporter at The Wall Street Journal and the author of “House Poor” (Harper Collins, 2005). Her “House Talk” column appears most Mondays on RealEstateJournal.com. Email your questions about the residential real-estate market. Please include your name, city and state. If you don’t want your name used in our column, please indicate that. Due to volume of mail received, we regret that we cannot answer every question.