Thanks to the old stereotype of the architect hunched over a drafting board, T-square in hand, many people still think that an architect’s main purpose is to draw “blueprints” (nowadays more properly called working drawings).

The trouble with this romantic notion is that it suggests that architects are paid to draw, when in fact, they’re paid to think.

In truth, producing working drawings is a tedious but relatively incidental aspect of the architect’s charge. It’s roughly analogous to taking a novel that’s been written in shorthand and typing it into a computer. The essential creative work–if it’s been done properly–is all but finished, and only the mechanics of formatting remain.

Alas, this preliminary thinking, which is the real kernel of the design process, takes a lot of time and effort and yet may not yield much of a tangible product until much later. Considering this dearth of physical results, it’s gratifying that many people nevertheless perceive why spending 15 percent or so of their building budget on architecture might be a worthwhile investment.

Still, there are also lots of perfectly intelligent people who are mystified, annoyed or even angered that a few sheets of drawings should take months to complete, cost them many thousands of dollars, and further delay them from getting their project under construction. These people quite reasonably reckon that all that money spent on mere paper could buy them a bigger Jacuzzi or a fancier front door.

I can only counter such reasoning by pointing out that architects provide a service, not a commodity. To say that your architectural investment only buys you a few sheets of paper is like saying that the cost of a Harvard education only gets you a lousy little diploma.

There are plenty of familiar arguments for hiring a licensed architect, most of them having to do with the technical side of the process. For one thing, the high level of detail found in a good set of working drawings–far from scaring off contractors as some people fear–actually makes the bidding and construction process easier and more accurate. For another, an experienced architect can help circumvent building-code booby traps that can make for nasty (and costly) surprises during construction. These services alone can save thousands of dollars in lost time and change orders. Hence, that seemingly extravagant 15 percent fee can repay itself quite rapidly.

Beyond these cut-and-dry reasons for hiring a professional, however, there’s one more–perhaps the only one that architects care passionately about—and that is the pursuit of good design for its own sake. Obviously, there are cheaper ways to get plans drawn than by hiring an architect, and no doubt there are times when a design that’s merely “good enough” would probably suffice. But from this architect’s perspective, at least, there can’t be much magic in this kind of undertaking. After all, humanity’s rise over the millennia has come, not from doing things well enough, but from doing them as well as we possibly could.

Do you have any friends who sell their homes and move approximately every two years? I know several of those very smart folks. You may wonder why they change homes so often. No, they are not in the federal witness protection program. But they have a very profitable reason.

They are “serial home sellers.” There is nothing illegal or immoral about that. In fact, it is extremely smart to sell your personal residence every two years or so, especially if there is no tax to pay on your resale profit.

TAX LAW ENCOURAGES PROFITABLE TAX-FREE HOME SALES. Just in case you have no clue what this is all about, every homeowner needs to know that Internal Revenue Code 121 permits tax-free principal residence sales profits up to $250,000 (up to $500,000 for a married couple filing a joint tax return).

To qualify, the home seller(s) must own and occupy their principal residence at least 24 of the last 60 months before its sale. But IRC 121 can only be used every 24 months. If you want to maximize your tax-free sale profits, there are five easy steps:

1. Buy a sound, well-located house or condominium below market value needing cosmetic fix-up work.

2. Move in and make it your principal residence.

3. Make profitable improvements to the residence that cost less than the market value they add.

4. Profitably sell the house at a tax-free profit not exceeding $250,000 (up to $500,000 if husband and wife occupied the home 24 or more of the 60 months before sale and they file a joint tax return).

5. Repeat every 24 months to become known as a tax-free “serial home seller.”

HOW TO MAKE PROFITABLE HOME IMPROVEMENTS. If creating tax-free profits, while enjoying your home is appealing, especially if you are a handyperson or in the construction field, serial home selling can be the perfect business opportunity. The only skill required is to recognize a house or condo with “the right things wrong.”

Most older houses qualify, as virtually every house more than 10 years old needs paint inside and outside. Paint is the most profitable improvement homeowners can make. Spending $1,000 on painting often adds $5,000 to $10,000 in market value.

Other examples of homes with the “right things wrong” include the need for new light fixtures, fresh landscaping, new carpets and flooring, and overall cleaning and repairs. An especially profitable home improvement is adding a second bathroom to a one-bathroom house.

However, the “wrong things wrong” with a house are necessary but unprofitable work that doesn’t add more market value than it costs. Unprofitable examples include a new roof, foundation repairs, new wiring, replacement of galvanized pipes with copper pipes, siding replacement, and window replacement.

Many home improvements are “nice to have,” but they don’t add more market value than their cost. Examples include bedroom and family-room additions, kitchen remodeling, and bathroom upgrades. Such work may make your home more desirable while you live there, but is unlikely to add more than the cost to the market value.

THE MAJOR DRAWBACK OF BEING A SERIAL HOME IMPROVER. If you think buying a run-down house, making profitable improvements while living in it, and selling it for up to $250,000 (or $500,000) tax-free profit sounds like fun, think again. It’s hard work.

While you and your family are living in the house as it undergoes major renovation, that can be what TV’s Dr. Phil calls “a life-changing experience.” The disruption of not having a kitchen to cook in, or only one working bathroom for a large family, and the daily disruption of having strangers working in your home can’t be fully described.

A few summers ago my neighbors went through such an experience. They wisely decided to take the kids to Europe so by the time they got back their remodeled home was almost finished. Yes, the marriage survived.

Because major home improvements can be traumatic, the smartest serial home sellers renovate their homes before moving in. Then they get to enjoy their fixed-up home for at least two years without the hassle and inconvenience of work in progress.

DON’T MAKE THESE COSTLY MISTAKES. Earning up to $250,000 tax-free (or $500,000 for a married couple) every two years excites most people. But there are some pitfalls to avoid:

1. Don’t buy a house in excellent condition (it lacks fix-up profit potential). Instead, buy the worst house in a good neighborhood.

2. Avoid most condominiums and townhouses. The reason is no matter how nice you fix up your unit, its maximum resale market value will be held down by the recent sales prices of other units in the same complex. For example, if you fix up a condo penthouse but the other units in the building and the common areas are “ho-hum average,” you won’t earn much profit.

3. Stay away from “extreme makeover” houses, which need to be torn down (called a “scraper”) or renovated by moving walls and rebuilding the interior. Profiting from such houses is extremely difficult.

4. No matter how much potential a fixer-upper house has, stay away if it is in a bad location, high-crime area, or the public-school quality is poor. These three criteria will hold down resale value no matter how well the house is upgraded.

WORK WITH A SAVVY BUYER’S AGENT TO FIND FIXER-UPPERS. Buyers of fixer-upper houses have a major advantage. Most other home buyers don’t want these fix-up houses. They prefer to buy a house, turn the key in the door, and move in. That’s the way to profitably sell your house.

A sharp buyer’s agent will alert you when a fixer-upper house with “the right things wrong” comes on the market, whether it be in the local MLS (multiple listing service) or a “for sale by owner” FSBO. In the current “buyer’s market” in most cities, there is little demand for these run-down houses offering profit potential.

Additional sources of profitable home purchases, which most buyer’s agents don’t follow, include foreclosures, probate and bankruptcy sales. Vacation or second homes can also be profitable, but they have special risks such as fickle buyer demand, which is often seasonal and volatile.

HOW TO PAY FOR THE IMPROVEMENTS. Fortunately, most “right things wrong” fix-up houses don’t require costly improvements. To pay for the improvements, because the house will become your principal residence for at least 24 months, many major lenders now offer combination mortgages to pay for both the purchase and the improvements.

The lender’s appraiser will evaluate both the home’s current “as is” market value and the upgraded market value after the improvements are completed. The lender pays out the improvement portion of the loan as the work is completed.

Another finance method is to buy the house with mortgage financing and then obtain a home equity credit line secured by a second mortgage to pay for the improvements.

However, this method is difficult if the home buyer doesn’t have much initial equity.

Although appraisers use three basic “approaches” to arrive at their professional appraisal of a property’s market value, not all methods are appropriate for each property. But in some situations, all three approaches are used.

Here is a look at the most common methodology used by appraisers:

1. REPLACEMENT-COST APPROACH. This appraisal method usually involves multiplying the square footage of the structure by the current construction cost for comparable quality to arrive at the estimated replacement cost of a building. When using this method, the key to success is starting with an accurate source of current local construction costs, such as home builders Marshall & Swift, and the Bluebook.

The next step, probably the most difficult for an appraiser, is to estimate applicable depreciation for an older structure to arrive at a reasonable replacement cost-estimate. The land value, based on cost per square foot, is then added to arrive at the property’s total market value.

Insurance agents often use the replacement-cost approach to arrive at recommended replacement-cost insurance coverage for houses. Although used as a crosscheck, most appraisers and mortgage lenders don’t pay much attention to the replacement-cost approach for all but newer residences.

2. RENTAL-INCOME APPROACH. This appraisal method is most appropriate for rental-income property, such as apartment buildings, shopping centers, office buildings, warehouses and other rental structures. If the property is owner-occupied, such as a warehouse, then rents for equivalent nearby rental property are used with this approach.

The net income, minus a vacancy estimate, is capitalized (based on the local capitalization rates for recent sales of similar income properties) to determine the estimated market value of the subject property. Appraisals of single-family houses and condos do not usually include this method unless the neighborhood is primarily occupied by tenants rather than owner-occupants. Even when a house is used as a rental, this is usually not the best appraisal method because the market value of most residences is determined by recent sales prices of comparable nearby houses, not their rental income.

3. COMPARABLE SALES-PRICE APPROACH. This is the most important appraisal method to determine the market value of a house or condo. To be accurate, the sales prices of comparable nearby residences should be as recent as possible. Sales prices more than six months old are usually not used unless there have not been any more recent home sales in the vicinity. In a rising or falling market, comparable closed home sales within the last three months are preferred.

Because this is the most important appraisal approach for houses and condos, the experience of the appraiser becomes critical to determine what is a truly comparable similar nearby residence. However, adjustments must usually be made to both the “subject property” being appraised when comparing it to the comparable nearby home sales, and to the comparables, to compensate for the pros and cons of each residence.

To illustrate, if the subject home has three bedrooms, but all the recent “comps” have four bedrooms, the appraiser must subtract value for the lack of a fourth bedroom. But if the subject property has a family room and the comps lack family rooms, then the appraiser will add value to the subject property.

The critical part of the appraisal process is the appraiser’s addition or subtraction of value, often involving thousands of dollars, based on his or her expert valuation judgments. Square footage of the subject property and the comps also play a big role because the appraiser usually has not seen the interior of the comparable properties.

Reverse Mortgage of America, a subsidiary of Seattle Mortgage and the third-largest producer and servicer of reverse mortgages in the country, plans to roll out the first new reverse product in nearly a decade when its privately funded jumbo program — The Lifestyle Plan — hits the market in the next few weeks.

The new product initially will be available in Washington, Oregon and California. It will be marketed to the remainder of the country early next year.

Designed for owners of higher-value homes, The Lifestyle Plan product is similar to Financial Freedom’s Cash Account and allows for a higher percentage of available home equity to borrowers, exceeding the federal loan limit placed on reverse mortgages insured by the Federal Housing Administration.

Both the Reverse Mortgage of America (RMOA) offering and the Financial Freedom mortgage function similarly to the FHA Home Equity Conversion Mortgage (HECM) and Fannie Mae HomeKeeper reverse-mortgage programs, but are funded by a third-party lender.

The Lifestyle Plan could be more beneficial than the HECM for homeowners with substantial equity. For example, a HECM would provide a typical 73-year-old couple with an appraised home value of $700,000 with approximately $203,723 in available funds. Under The Lifestyle Plan this same couple could avoid closing costs and loan fees, netting $291,915 in available funds, a difference of $88,192, according to Reverse Mortgage of America.

“The Lifestyle Plan provides additional opportunities for seniors across the nation, particularly those in expensive housing markets, who are eagerly seeking alternate sources of income,” said John Nixon, executive vice president of Reverse Mortgage of America. “It is important that seniors understand and fully examine their financing options. As our population ages, reverse mortgages will supplement retirement and enhance the quality of life for many more senior homeowners.”

Financial Freedom first introduced a jumbo reverse mortgage in 1996 and had no competition until now. Jumbo amounts, now starting at $417,000, adjust annually and are greater than the “conforming” limits established by Fannie Mae and Freddie Mac.

The interest rate on the new RMOA program is the six-month LIBOR Index, plus 3.6 percentage points. That rate today would be 9.02 percent, compared with 5.07 percent three years ago. While the new RMOA program’s “margin” is slightly higher than the Financial Freedom mortgage (3.6 compared with 3.5) the RMOA mortgage offers a more flexible no-fee option.

Most seniors prefer predictable, reliable mortgages. Many have requested a fixed-rate reverse to the unpredictable moves of an adjustable, but underwriters have been unwilling to take on the risk of a long-term product.

Tom Scaberti, who left Financial Freedom last year to head up the soon-to-be-released reverse mortgage at Countrywide Home Loans, said it has been difficult for potential mortgage investors such as Lehman to commit to gauge how long seniors will remain in the home. That information, plus other research, would bring more mortgage variety and result in lower rates and fees for consumers.

“There are actuarial tables, like the ones insurance companies use, to predict how long a senior will live,” Scaberti said. “But we don’t have a lot of data yet on the move-out rate. How long will they stay once they get the reverse?”

FHA’s HECM is clearly the nation’s most popular reverse mortgage and carries a lower interest rate than the jumbo products, but borrowers are limited in the amount they are able to borrower by FHA’s loan ceilings and geographic regions. Urban areas typically have higher loan ceilings than rural areas. Borrowers have to pay HECM loan fees, typically 2 percent of the appraised value plus a 2 percent mortgage insurance premium, but these fees can be subtracted from the loan proceeds. Thus, borrowers do not have to pay “out of pocket” for most of these fees.

Reverse borrowers make no monthly payments on their mortgage during its term. The loan comes due when the borrower permanently moves out of his or her home. To qualify, consumers must be at least 62 years of age and own their own home. The home does not have to be paid off entirely, but the greater the equity, the greater the reverse loan amount.

However, seniors can “outlive” the value of their home without being forced to move. The homeowner cannot be displaced and forced to sell the home to pay off the mortgage, even if the principal balance grows to exceed the value of the property. If the value of the house exceeds what is owed at the time of the homeowner’s death, the rest goes to the estate.

Everybody wants a bargain. Last year, good real estate deals were few and far between. This was due to the fact that inventories of homes for sale were at record low levels. And, there was an abundance of buyers, all looking for the same thing.

Today in most areas, buyers have the luxury of choice. So, there’s less of a chance you’ll overpay because you have to outbid another buyer. However, even though there is a lot to choose from, this doesn’t mean that it will be easier to buy a property at a bargain price.

One reason is that most sellers aren’t desperate to sell. Just because the market has changed doesn’t mean that sellers are slashing their prices dramatically. Many listings that have price reductions were overpriced to begin with.

Another factor is that there is usually little consistency in pricing. Some listings are well-priced, others are overpriced, and then there is the occasional listing that is actually priced below market value.

Another complicating factor is variability. Unless you’re looking at listings in a single tract development, where each house is a cookie cutter of the others, you’ll find disparities in age, condition, size and amenities. Each of these variables has an affect on market value.

HOUSE HUNTING TIP: In order to find a good deal, you need to be able to identify a fairly priced property when you see it. This requires intimate knowledge of home values in the area.

A good real estate agent can help you to develop this product knowledge. But, there is no substitute for doing your own due diligence–driving the area, researching the local economy, viewing listings online and visiting open houses. This gives you the confidence you need to make an educated decision about what constitutes a good deal.

Even though the pace of the home sale market has slowed, you may have to make a snap decision or risk losing out on a great buy. Many home sellers price their homes too high for the market. They usually sit for a while before the sellers realize the house can’t sell without reducing their price.

But sellers who understand the market and have a pressing need to speed the process along will price their properties at or under market value. If you aren’t up on current market values, you could let a good deal slip by because you didn’t act quickly enough.

Part of buying at the right price is being there when the well-priced listings come on the market. Don’t wait until a Sunday open house to see a new listing if your agent thinks it will sell quickly.

It’s possible to create a good deal. One way is to research the listings that have been on the market a while without any offers.

Find out why they haven’t sold. If there isn’t anything wrong except the price, ask the listing agent why the seller is selling and whether there’s any flexibility in the price. Sellers who have a real reason for selling, like a divorce, death in the family or job transfer, will soften on price in time.

Be sure to find out the amount of the outstanding loans secured against the property. If the sellers are mortgaged to the hilt, you might want to move on and negotiate with a seller who has a strong equity position in the property. Even if he sells for less than he’d hoped, he’ll at least sell for a profit.

THE CLOSING: Steer clear of listings that aren’t selling because they have an incurable defect, like a location on a busy street. You may be able to negotiate a bargain price, but you’ll also have to discount your price when you resell the property.

As the end of 2006 rapidly approaches, there is still time to plan your year-end tax savings. Just one or two savvy real estate transactions can result in saving thousands of tax dollars in this year and future years.

Of course, always consult your personal tax adviser to maximize tax savings. Here are the 10 major year-end real estate tax savings opportunities:

1. SELL YOUR PRINCIPAL RESIDENCE BEFORE NEW YEAR’S DAY. The biggest tax break available to most taxpayers is to sell your principal residence. If you owned and occupied it at least 24 of the last 60 months before its sale, you can claim up to $250,000 tax-free capital gains (up to $500,000 for a qualified married couple filing a joint tax return).

Internal Revenue Code 121 provides this generous tax break. But it can only be used once every 24 months.

2. BUY A PRINCIPAL RESIDENCE BEFORE YEAR-END. If you want to buy a house or condo for your principal residence, the current “buyer’s market” in most cities is a great opportunity. Home sellers and their realty agents are anxious to negotiate.

With fixed-rate home loans hovering around 6 percent, this is an ideal time to buy from a motivated home seller. When you pay a typical home acquisition loan fee of 1 percent or 2 percent of the mortgage amount, it becomes tax-deductible as itemized interest if your home purchase is recorded by Dec. 29, the last business day of 2006.

In addition, the mortgage interest you pay the lender in 2006 is also tax-deductible on your 2006 income tax returns.

3. REFINANCE YOUR HOME MORTGAGE; DEDUCT UNDEDUCTED LOAN FEES. If you have a previously refinanced home loan for which you paid a loan fee — and which you are amortizing over the life of that mortgage — today can be a great time to refinance to (a) get rid of an adjustable-rate mortgage, and/or (b) take out tax-free cash from your home equity, perhaps for home renovation or other purposes.

In the year of paying off a mortgage with undeducted loan fees, those fees become fully tax-deductible as itemized interest.

To avoid this problem in the future, when refinancing it is often smart to obtain a so-called “no-cost mortgage.” Although the lender might charge a slightly higher interest rate, typically one-eighth percent higher, because loan fees paid on refinanced mortgages are not fully tax deductible immediately and must be amortized over the loan’s life, borrowers usually come out ahead with a no-cost mortgage.

4. OBTAIN A HOME EQUITY CREDIT LINE TO CREATE TAX-DEDUCTIBLE INTEREST. If you have credit card debt, perhaps an auto loan or personal loans up to $100,000 total on which you are paying nondeductible interest, obtaining a home equity credit line to pay off those debts can create tax-deductible interest secured by a home equity credit line.

Interest on a home equity loan up to $100,000 is tax-deductible. They are easily available from local banks, credit unions and other lenders. However, if the purpose of your home equity loan is for use in your business, there no limit to the interest deductibility on your business tax returns.

5. PREPAY YOUR JANUARY 2007 MORTGAGE PAYMENT IN 2006. An easy big tax-saver for homeowners is to prepay your January 2007 mortgage payment well before Dec. 29, 2006. If your mortgage lender receives the payment in time to include it on your IRS 1098 interest deduction statement, the result will be an increased itemized interest deduction for 2006.

6. WHERE ALLOWED, PREPAY YOUR 2007 PROPERTY TAX IN 2006. Many local property tax collectors notify homeowners in 2006 of their property tax payments, which will become due in 2007.

If your tax collector allows you to prepay your 2007 property tax in 2006, it qualifies as an itemized deduction on your 2006 income tax returns. A phone call to your local tax collector will let you know if he accepts early property tax payments.

7. DELAY TAXABLE HOME SALES UNTIL 2007. If you are fortunate to have a potentially taxable home sale exceeding $250,000 capital gain (over $500,000 for a qualified married couple filing a joint tax return), it will pay to delay the closing date until after Jan. 1, 2007.

The reason is the capital gain tax on your 2007 profitable sale won’t be due until April 15, 2008. This same principle also applies to other types of property sales.

8. IF YOU MOVED IN 2006 DUE TO A JOB LOCATION CHANGE, DEDUCT YOUR MOVING COSTS. A large tax deduction that many renters and homeowners forget is the moving-cost tax deduction. If you changed both your job site and your personal residence in 2006, you may be able to deduct your moving expenses.

To qualify, even if you take the standard tax deduction, you can deduct moving costs if the distance from your previous residence to your new job site increased by 50 miles or more. For example, suppose your old job location was 10 miles from your old home. That means the distance from your old home to your new job location (even if you work for the same employer) must be at least 60 miles (10 plus 50 in this example).

Either spouse can qualify, providing you changed your residence in the same year of changing job location. Even if you became self-employed or changed employers, if you meet the distance test, your direct moving costs may be tax deductible if you meet the minimum employment time tests.

9. DEDUCT UNINSURED CASUALTY OR THEFT LOSS. If you had a “sudden, unexpected, or unusual” casualty or theft loss that was not paid by insurance or other recovery, it may qualify for the casualty loss tax deduction. However, only personal casualty losses exceeding $100 and over 10 percent of your 2006 adjusted gross income qualify.

For example, if you paid $10,000 to repair your home after an uninsured 2006 flood loss, that loss is tax deductible to the extent it exceeds 10 percent of your 2006 adjusted gross income, plus $100 per casualty event. With $30,000 adjusted gross income for 2006, subtracting $3,100 from your $10,000 repair cost, $6,900 of the loss becomes tax deductible in this example.

10. MAKE A TAX-DEFERRED EXCHANGE OF BUSINESS OR INVESTMENT PROPERTY. Many owners of business or investment properties hesitate to sell because they will then owe a large capital gains tax. Instead, they can make an Internal Revenue Code 1031 tax-deferred exchange for another “like kind” property of equal or greater cost and equity.

“Starker exchanges” allow the sale of a qualified investment or business property, if the sales proceeds held by a qualified intermediary or accommodator, followed by purchase of a qualifying replacement property without having “constructive receipt” of the sales proceeds. But the exchanger only has 45 days to designate the replacement property and up to 180 days to complete the acquisition. Details on these year-end tax savings are available from your tax adviser.