Dear Ask George: "We are in a dither as to which way to go: HELOC or conventional financial?"

We currently own a home with 28 years equity growth, or $850,000. We want to buy a second home, as well as, invest in third and fourth homes. The total value of the financing for the purchases will be $550,000. We have about $53,000 in savings for down payments and closing costs.

One banker says to go the HELOC route. Another one says to buy the second home using a conventional mortgage, and the third and fourth homes, with an ARM and perhaps 10 percent down. What would you do?

Answer: Perhaps you are in a dither because you do not have all the pertinent information required to make an informed decision. I'll give you an answer to your question in the third paragraph. But first, a definition of the word "HELOC" is advisable. HELOCs or "Home Equity Line of Credit" loans can serve as a means of converting accumulated home equity into funds used for other purposes such as acquiring 2nd, 3rd, and even 4th homes, paying college tuition costs, or even paying off some bills. What I would do is, follow the professional advice of someone who has a complete picture of my finances, including federal and state taxes. I'd ask his or her opinion regarding best-guess scenarios as to the direction of interest rates and the probable impact in HELOCs versus other forms of financing. Ultimately, you will have to make the decision but hopefully, it will be an informed decision based upon probable risks versus possible rewards.

Some articles you may find helpful, include a December 13, 2004, article appearing in Realty Times, written by columnist Kenneth R. Harvey. In it he explains why the Federal Regulators are voicing some concerns regarding HELOCs.

I also recommend reading Broderick Perkins' article published November 16, 2004.

For a refresher course in the HELOC basics, I suggest an article written by Jack Guttentag, it's a good primer for various features of HELOCs.

Dear Ask George: "Can an independent broker, who sponsors no agents, solely represent both buyer and seller in a real estate transaction?"

Answer: Your question was sent from a specific location in Texas, so I'm going to address the answer according to the applicable state statutes in Texas.

The answer to your question is "yes," but as a solo practitioner you cannot assign other agents to communicate with, and carry out the instructions of the buyer or the seller. You may only function as the Intermediary. You should also be aware that you are an Intermediary in Texas by definition, but you do not have the protection of the statute because you cannot appoint agents.

If you are a member of the Texas Association of Realtors, you can access the forms here .

The Residential listing agreement, TAR form 1101, and the Residential Buyer/Tenant Representation agreement, TAR form 1501, must both reflect the fact that the real estate broker is authorized to act as an Intermediary (Listing Agreement TAR form 1101, check 9 A., and the Buyer/Tenant Representation Agreement TAR Form 1501, check 8 A. (2) without making any appointments. The Commercial Listing agreement, TAR form 1301, you would check 9. B (1) and the Commercial Buyer/Tenant Representation, TAR form 1501 agreement you would check 8 B.(1).

Dear Ask George: "I found a great property that the listing agent said the buyer was ready to sell, and that no bid was too small to consider. My real estate agent called and said we were considering a bid in the $50,000's. The listing agent called the owner who verbally said he would take $60,000. We told our agent fine, and she told the listing agent, who told the seller. We had the offer, earnest money, and contract in the listing agent's hand first thing the next morning and we were the first bid the listing agent received. She said she tried to contact the seller, but he was not available at that time.

Several hours later, she said she received another bid for $69,000, which she later submitted simultaneously with our bid. Of course, he took the $69,000 bid and we were told 'sorry.'

We submitted the bid based on a verbal agreement the seller said he would accept. We could have bid the asking price of $69,000 had we not been told that he would take the lower price. Don't we even get a chance to counter with full price? Hasn't the seller reneged on our verbal offer?"

Answer: I am not aware of any state in which a verbal offer to purchase real estate has any status as being either a valid offer, or an enforceable offer.

In certain states, such as Texas, a residential lease for not more than one year in which a sale is not being considered, do not require a written contract although I certainly do not recommend it.

Since your verbal offer has no force, or effect -- something your real estate agent should certainly have pointed out to you, I'm afraid you have no chance to submit the written offer you should have submitted in the first place.

Another way of looking at this -- a favorite quote from the attorney of the Ask George & Chuck duo, "In real estate transactions, a verbal offer isn't worth the paper it's printed on."

Dear Ask George: "We are first-time homebuyers, and I want to know if we got the wool pulled over our eyes during the closing. I had negotiated the price down $13,000 prior to the closing of our new construction house.

We closed without a lawyer, just a real estate broker who works with the company we bought the house from, the lender, and the title company were present. Seller's concessions were not mentioned by the broker, or by us. I just want to know if this would be the role of the Realtor to mention to us during or prior to closing, to initiate a seller's concession or was the Realtor on the side of the seller? Also, during the closing the Realtor walked out of the room with the seller to discuss some mistake in the paperwork. I never knew the truth about their discussion whether it was regarding seller's concessions or what."

Answer: I do not think you had the wool pulled over your eyes regarding whether or not, the real estate broker could have advised you regarding the price you paid. However, that real estate broker may have failed to properly inform you as to the relationship, they had with that broker.

The Michigan Occupational Code, 339.2517 Disclosure of agency relationship (Section 2517), requires that a Michigan licensee shall disclose to a potential buyer or seller in a real estate transaction, all types of agency relationships available and the licensee's duties that each agency relationship creates.

Such disclosure must be in writing, and must substantially conform to the form listed in Section 2517.

I believe the real estate broker probably, was a listing agent representing the seller, and as such could not provide you advice or counseling that would not be in the best interests of the seller.

However, the form dealing with the Disclosure of Agency is a long and fairly involved form, and I'm fairly certain you would recall having received such a form when you first communicated with the real estate broker.

Nonetheless, you answered the email I sent subsequent to your first email, by stating you were pleased with the house and the price for which you obtained it. If you wanted to do a positive action for the real estate broker with whom you dealt, you might call her and mention the agency disclosure required under Section 2517.

Dear Ask George: "I have a townhouse in New Jersey that I bought in December 30, 2003. I am planning to sell this house. I may move more than 50 miles from my present home, and I plan to use the proceeds from the sale as a down payment on a new home. Is there any way I can save on my capital gains taxes?"

Answer: My number one answer when dealing with a question regarding tax due on the sale of a residence is, "Hire a tax professional who has access to your entire financial picture and can, therefore offer you meaningful advice."

My number two stock answer is to consult IRS Publication 523, Selling Your Home . Plus, since New Jersey has an income tax -- including capital gains, subject to estimated tax payments if your net tax liability is in excess of $400, your tax advisor should take that into consideration.