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Open House
Buying Fast and Selling Faster: The Newest Get Rich Quick Plan; Moving Scams and How to Avoid Them; Weekend Project: Bathroom Update on a Budget
Aired March 19, 2005 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: Today on OPEN HOUSE, buying, then selling real estate, sometimes even before the contract ink is dry. Can you get rich quick, or just take on too much risk?
Then, moving scams. Federal laws provide little protection, but you can protect yourself as well as your stuff. We'll walk you through the options.
And our weekend project, keep your home's value from slipping down the drain. It's a bathroom update on a budget.
All that and more, next on OPEN HOUSE.
GERRI WILLIS, HOST: Hello, and welcome to CNN OPEN HOUSE. I'm Gerri Willis.
From buying and selling to renovation and design, we show you how to make the most of your biggest investment, your home.
Today, we go beyond that to look at a popular strategy for real estate investing, that's buying a place before it's built, and selling it at a profit almost immediately.
We went to Palm Beach County, Florida, for a closer look.
(BEGIN VIDEOTAPE)
WILLIS: Genay Leitman feared missing the boat, so she jumped on the latest hot money trend, buying and selling property fast.
GENAY ANN LEITMAN, REAL ESTATE INVESTOR: I have seen how the growth has occurred in the last 10 years that I've been living in Florida. And I've missed opportunities where I could have doubled and tripled my money on condominiums near the water and on the water. And when I saw this property opening in Boynton, I said, That's for me.
WILLIS: Before the builder even broke ground, she snapped up five properties in Marina Village valued at $2 million, of course, putting down a percentage of that.
(on camera): You've already invested, what, $200,000?
LEITMAN: At least.
WILLIS: Yes. LEITMAN: Yes.
WILLIS: And what kind of return do you expect to get in these properties?
LEITMAN: Right now, I would think I could probably double my money.
WILLIS (voice-over): Jack Alkovich (ph), Leitman's real estate agent, and, you could say, investment adviser, expects she will do it. These condos are so hot, they were snapped up right after the plans were announced.
UNIDENTIFIED MALE: This complex, Marina Village sold in three days.
WILLIS: That's the trick, find preconstruction properties so popular investors can buy and sell at a profit, often before closing on the mortgage, and before the building is complete.
But this trend is also creating a vicious circle, sending real estate prices beyond the reach of many of those living where this kind of investment is rampant.
(on camera): Condominiums are clearly popular with south Florida investors, but as demand grows, prices rise. Adding to that house inflation, increased prices for land, labor, and materials.
(voice-over): In Palm Beach County, for example, the median price for a home is more than $383,000, up 34 percent just this past year. Only in Las Vegas and Riverside, California, are prices rising at a faster clip.
And this has even some developers complaining.
UNIDENTIFIED MALE: The land prices wouldn't be escalating at the rate that they are if the investors weren't buying up the units and causing developers like myself to have to go out and replace that inventory.
WILLIS: For Leitman, though, if it makes money, it makes sense.
LEITMAN: I still have money in the stock market. But I'm slowly putting it into real estate.
WILLIS: And this is the kind of investment she can also call home.
LEITMAN: I'm planning on living in the two-bedroom.
(END VIDEOTAPE)
WILLIS: OK, call it quick-turn investing, call it speculation. It has risks and rewards for individual investors.
For more, we turn on the author of "Secrets of a Millionaire Real Estate Developer," Mark Weiss, who joins us from Chicago.
Welcome, Mark.
MARK WEISS, AUTHOR, "SECRETS OF A MILLIONAIRE REAL ESTATE DEVELOPER": Hi, Gerri. Thank you.
WILLIS: Good to have you here.
I think everybody is looking at that in, you know, speculation and investing, what is it? And how common is this kind of speculation right now?
WEISS: Well, you know, it's common in cycles. Right now, it's very hot from coast to coast. This topic is on everybody's lips, because it seems to be something that is so popular for investing. Certainly the stock markets let everybody down, or many people down, and...
WILLIS: Absolutely true.
WEISS: ... real estate is solid.
WILLIS: How do these investments work, in a nutshell?
WEISS: Well, in a nutshell, before something's built, the lender for the developer will require that presales take place. So in order to do that, and then show the lender that they have something sold, they can then get their construction money to build. They go and build trailers, marketing, facades, and presell units in order to get contracts and come back to the bank who's funding the deal, and say, We're ready to build, we've got contracts, showing that the market is ready to move in or buy our product.
WILLIS: Now, Mark, you are one of these people who knows a lot about speculation and the kind of investing that is going on now. But you don't really do it. How come?
WEISS: Well, I invest in many different types of property. I can't do everything. I have just made some choices. And who knows? Maybe I will at some point. (UNINTELLIGIBLE)...
WILLIS: Well, let's -- is there -- are there downsides? I guess that's what I'm getting to. I think there's a lot of excitement, euphoria out there in the marketplace for real estate and for some of this quick-turn investing. But what I'm wondering about is, is this another dot -- stock dot-com scenario just waiting to unfold?
WEISS: Oh, it certainly is. I mean, if you think back about four years, when the dot-com bubble burst, people who had contracts on new developments, in many different areas, were hoping that people who were flush with cash would continue buying and continue buying and continue buying.
And then they were absent in late '99 and 2000. When products were then delivered, when units were delivered in '01 and '02, there was no one to buy these contracts that people had been sitting on for a couple of years. The downside is, you have to close, or you walk away from your earnest money. If you close, you've got the expense of assessments and other carrying costs.
WILLIS: So you have to be prepared to not find that (UNINTELLIGIBLE) at the end of the day, and take ton burden of the mortgage yourself, right?
WEISS: Or walk away from your earnest money and just leave it on the table.
WILLIS: Yes, it doesn't sound like a good scenario if the market turns on you.
Let's just walk through some of the steps of this, if you actually are going to go out and speculate in the marketplace. You would start probably by finding a professional, right, somebody who would give you great advice. How do you do that?
WEISS: Well, I think if you're going to any market, you want to find someone who is a successful real estate broker in that market, not connected to the sales trailer or hype that's going along with the respective development, but someone who can take you around and show you what is being built where, and basically which buildings are in the most demand and are not being compromised (UNINTELLIGIBLE), just like you would look for a home.
WILLIS: OK...
WEISS: Have a Realtor show you comps, and study and do your homework.
WILLIS: What other research would I do, Mark?
WEISS: I think certainly using the Internet and the Web, finding things for yourself. You know what I love to do with people or suggest to folks is just go on Sundays to look at what resales are going for, as well as the new construction trailers.
WILLIS: All right.
WEISS: Educate yourself.
WILLIS: Yes, I need to get to marketing, though. We don't have a lot of time left. Let's talk just for a second about how you're going to sell that contract then when the time comes.
WEISS: Well, as soon as you sign that contract, you want to list it with a Realtor and get it into the multiple listing service, which is in every major city, so that someone coming into that market can see that your unit is for sale, and hopefully want to move into that new development and take you out.
WILLIS: All right. Well, Mark Weiss, thanks so much for your time today.
WEISS: Thank you. WILLIS: Coming up on OPEN HOUSE, don't be taken for a ride. A look at common moving scams and what you can do to avoid them.
And our weekend project, create a better bathroom. It all starts with the sink.
But first, your tip of the day.
(BEGIN VIDEO CLIP)
ANNOUNCER: Finding the right home inspector can save you lots of money. But be wary of referrals given to you by your real estate agent. Instead, check out the American Society of Home Inspectors Web site to find a reliable professional. Members of this group are required to have conducted at least 250 paid inspections.
Simply go to www.ashi.org. Go to Find an Inspector, enter your location, and you'll get an extensive list of qualified home inspectors in your area.
And that's your tip of the day.
(END VIDEO CLIP)
WILLIS: Moving scams are growing, especially with more business done over the Internet. And there are few federal laws to stop it, so you have to protect yourself.
Chris Huntington has a case in point.
(BEGIN VIDEOTAPE)
CHRIS HUNTINGTON, CNN CORRESPONDENT (voice-over): When Lauren Eisenberg hired movers to take her belongings from New York to Florida, she thought she'd found a deal that was too good to be true.
And it was.
LAUREN EISENBERG: I made the decision to look online to find a moving company. And when I did my research, I came across what I thought was the most economical.
HUNTINGTON: But it turned out to be far more expensive. Lauren's possessions were damaged or missing, and those that did arrive came weeks late, along with a bill that was more than twice the amount originally quoted. And she had little recourse.
EISENBERG: I at that point took it up with the Better Business Bureau, who, a couple of weeks later, sent me a letter saying that the company actually was no longer.
HUNTINGTON (on camera): It's an increasingly common problem. People will find a mover online, the Web site will look very professional, but it will turn out to be a fly-by-night operation, the kind that go out of business fast, only to pop up somewhere else later under a new name, all to stay one step ahead of law enforcement. (voice-over): The Federal Motor Carrier Safety Administration, which is part of the Department of Transportation, says the number of these companies has soared over the past 10 years, along with the proliferation of the Internet.
Administrator Annette Sandberg says the most common scam is jacking up the price and holding the goods hostage.
ANNETTE SANDBERG, FMCSA ADMINISTRATOR: Once they get everything on the truck, they say, Oh, that $2,000 we quoted is inaccurate. If you want your goods back, now that they are on our truck, you are going to have to pay $6,000 or $8,000.
HUNTINGTON: But federal law limits a mover from charging more than 10 percent above the estimate. The authorities say reputable movers will know that, and they'll provide consumers with legitimate contracts that spell out everything in the fine print. And the Department of Transportation can verify their legitimacy at 1-888-DOT- SAFT.
For Lauren Eisenberg, it's a lesson learned.
EISENBERG: (UNINTELLIGIBLE) that, you know, it is a bigger name, and maybe pay a little bit more money, but just to have the reassurance that your stuff is going to get there and get there in one piece.
WILLIS: For OPEN HOUSE, Chris Huntington, CNN, New York.
(END VIDEOTAPE)
WILLIS: How else can you protect yourself? The March issue of "Consumer Reports Money Adviser" focuses on avoiding moving-day surprises. The deputy editor, Lisa Lee Freeman, is here.
Lisa, welcome.
LISA LEE FREEMAN, DEPUTY EDITOR, "CONSUMER REPORTS MONEY ADVISER": Thank you. Nice to be here.
WILLIS: Good to see you again.
I just want to start by talking about, in a nutshell, what these scams are, how they work.
FREEMAN: Well, basically, what they do is, they lowball you on the bid. You go for the bait. They load up the truck, and then they jack up the price, and they hold your stuff hostage until you pay up. And you may never see everything you own ever again. They can just drive off into the sunset with it.
WILLIS: And it sounds like a nightmare. Well, let's talk about warning signs because I know there are warning signs out there, starting with the quote that you get.
FREEMAN: Yes. If the quote is in -- is based on volume and not weight, that could a problem. Often the fly-by-night organizations don't base their quotes on weight, instead they base it on cubic feet.
WILLIS: All right. And what about not getting a binding quote? Is that a bad thing?
FREEMAN: Yes, you want to make sure you get a binding quote that lays out all of the expenses up front.
WILLIS: OK. And I've heard of cases where people get ready for moving day, and here comes the truck, but it doesn't have the logo of the company on it.
FREEMAN: That's right. If it's -- if it doesn't have the logo of the company on it, and it's a rental truck, I think that's a pretty bad sign.
WILLIS: I guess we should also be talking about the lowball quote. And we were talking about this before, right?
FREEMAN: Yes.
WILLIS: You can't skimp on moving.
FREEMAN: No, do not cut corners. Go with somebody that you know is good. Get a recommendation from a real estate agent locally, from your employer, from someone you know that's recently moved. That's the way to get the name of good movers. And don't try to go for these lowball quotes that you will find over the Internet, because often they are too good to be true.
WILLIS: All right. Too good to be true is always a problem. Let's talk about some more ways of avoiding scams. You started to talk about, you know, doing the background check on these movers. Are there other resources that you can look at besides just talking to friends and family?
FREEMAN: Oh, yes, absolutely. After you've got the names of a few movers, what you want to do is go on the Internet and go to the Better Business Bureau's Web site, BBB.org. Moving.org is a great Web site. It's run by the American Moving and Storage Association. And they actually have lists of certified movers, so you can also get actually recommendations from there.
Also go to movingscam.com. They have lots of information on there, including a blacklist of movers that have had a lot of complaints against them.
WILLIS: That sounds great, a blacklist of movers. People should definitely check it out.
Now, you say also that you might want to think about looking very closely at insurance as well. And this is tricky, because they're going to want to sell you one kind of insurance, but maybe you want to get something else?
FREEMAN: Well, actually, insurance usually comes with the move. But what you want to do is make sure you get full-value insurance. WILLIS: What does that mean?
FREEMAN: Well, that means it will cover the cost of the full item. You may only get $40 for that big-screen TV that they crack and break on the way into your house. You want to make sure that that's covered in full.
WILLIS: Makes a lot of sense.
Anything else I should know? And any other ways of checking out movers? Because I know people out there, they are worried about this. They're concerned. They certainly don't want to lose their goods, and they don't want to lose their money.
FREEMAN: Right. Well, the main thing is, don't find movers on the Internet. Get recommendations. Call the movers, ask them for references. Do not go to these sites that say they are going to give you multiple quotes from different movers. They may be fly-by-night organizations, you never know.
WILLIS: Lisa, is there a way I can know what I'm going to pay before I pay it, though? It would be nice if I came to the table knowing exactly what I should be paying (UNINTELLIGIBLE).
FREEMAN: OK, this is a very good point. You want to make sure that the moving company sends over a rep to eyeball your stuff to make sure that you get an accurate estimate. That's a very important part of the process.
WILLIS: And don't do it on the Internet.
FREEMAN: That's right.
WILLIS: Lisa, thanks so much for being with us.
FREEMAN: You are welcome.
WILLIS: Coming up, our weekend project. Want modern efficiency with classic looks? We'll show you how to replace those old bathroom fixtures, coming up next on OPEN HOUSE.
ANNOUNCER: This is CNN Breaking News.
RANDI KAYE, CNN ANCHOR: And good morning, I'm Randi Kaye at the CNN Center in Atlanta.
We do have some breaking news in the case of 9-year-old Jessica Lunsford, the missing Florida girl. We want to get right to the presser from earlier this morning. This is a press conference where her father, Mark Lunsford, came out and spoke to reporters for the first time since hearing from police that a sex offender that had been living in the area has confessed, according to police, to kidnapping and killing his 9-year-old daughter.
Let's listen to what Mark Lunsford had to say earlier this morning. (BEGIN VIDEO CLIP)
MARK LUNSFORD, JESSICA LUNSFORD'S FATHER: (audio interrupt) need more people to support now the efforts that we tried to make to change things.
I love everybody for helping, for supporting, for even talking about it. But Jesse is home now, and she is right here with me. And she knows, she knows it all.
And all the parents out there -- I know everybody does, but do it more often, make sure you get that hug and kiss every day before you leave that house. I did. I got mine. You just make sure you get yours. And remember, love your children this much, and no one or nothing will come between you and them.
Thank you.
(END VIDEO CLIP)
KAYE: Once again, there you have Mark Lunsford, the father of 9- year-old Jessica.
A search is underway on the property there in Homosassa Springs, Florida.
We do have some breaking news that we want to get right to.
Susan Candiotti is in Augusta, Georgia, where Couey, the suspect in this case, is being held. Susan, what can you tell us?
SUSAN CANDIOTTI, CNN CORRESPONDENT (on phone): Hello, Randi.
Some sad news to report. According to law enforcement sources, in the middle of the night, investigators searching the area behind the house where John Couey had told them to look during his alleged confession yesterday, investigators have recovered part of Jessica's remains. Sources say it is a skull believed to be of a little girl.
Police say that Couey confessed to abducting and killing the little girl. He's a convicted sex offender, that he said that he took her from her home, the little girl, back on February 23, in the middle of the night.
As you heard just a few moments ago, as you replayed part of what Jessica's father had to say, he was choking back tears when he said, She's home now, referring to his little girl.
Now, we will hear more details, presumably, about this from Citrus County Sheriff Jeff Dawsy at the top of the hour, when he tells us more about this, as well as additional information about the status of John Couey, who, as the sheriff said yesterday, after being interviewed for several hours over the course of two days, broke down in tears, evidently, when he told authorities that, in fact, he had kidnapped and then killed Jessica, and, according to sources, buried her behind the house where he had been living with relatives. Also, we will learn additional information about the next step for John Couey, whether he will be charged and whether he -- and when he will be brought back to Florida. It is possible that there might be a second extradition hearing for him. Yesterday in Augusta, Georgia, he did waive extradition based on probation violation charges, and agreed to return voluntarily to Florida.
Now, the question is, whether he will be charged in Florida, and whether he will have to face another extradition hearing in Georgia before he is brought back to Florida. We hope to get those answers from Sheriff Dawsy shortly.
In the meantime, John Couey, according to authorities here in Augusta, is under a suicide watch at the jail here, Randi.
KAYE: And Susan, if we could just get back to -- you were reporting that part of Jessica Lunsford's remains have been found there near her home. Yesterday, we were told by authorities that John Couey had given them a general area, apparently, in his alleged confession, a general area to search. Any idea where in that area they may have found these remains? And when they might have found them?
CANDIOTTI: We know that it came at around -- somewhere around 2:00 in the morning. Specifically, no, authorities at the time that I spoke with them were not releasing those details. It is possible, of course, that the sheriff might get into that, in the -- into a little more detail when he talks with the press in just a few minutes from now.
KAYE: All right. Susan Candiotti with us from Augusta, Georgia, bringing us some breaking news in the case of 9-year-old Jessica Lunsford. Susan, thank you.
And we also now want to go back to Florida and check in with Sara Dorsey, who has been covering this story from the scene there. Sara, as you just heard, Susan Candiotti telling us part of Jessica's remains reportedly have been found on the property, maybe around 2:00 a.m. this morning. Have you heard anything about this there? And have you seen anything to suggest that this indeed is the case?
SARA DORSEY, CNN CORRESPONDENT: Well, we have seen a medical examiner's car on the scene, of course, crime scene investigation vehicles were here last night.
Just a tragic end to this story. Three weeks that this family has been searching for their little girl. Not the news that they wanted to hear, of course.
We are awaiting a 10:00 a.m. press conference with Sheriff Jeff Dawsy. He is from the Citrus County Sheriff's Office, who has been leading this investigation the entire way. And we'll tell you that I -- this has been a tough investigation for that department. They really had no solid leads going into this. Couey was a person of interest, but not necessarily a person that they believed right off the bat would know something, just someone that raised a few red flags.
And, of course, then we do now, as Susan just told us, sources tell her exactly how he confessed to that crime after a polygraph, telling the investigators, I don't even need to know the results, apologizing for wasting their time, and then, of course, allegedly confessing to this crime.
I'm going to show you that the search is happening behind the trailer that Couey was sharing with family members. You can see a truck kind of blocking our view. There's also a tent there covering an area where searchers were looking last night. We saw investigators take out some things from around that home, a bicycle, a mattress, not clear at this point whether any of those things have anything to do with this investigation, or if investigators were simply moving those out of the way.
We hope to find out more information about what Susan had just reported in this 10:00 press conference with Sheriff Dawsy, hope to understand more about the circumstances surrounding this entire investigation, Randi.
KAYE: Sara, Jessica had disappeared about three weeks ago. The case did get off to a very slow start. We do know that John Couey is a convicted sex offender. But how did police end up on his front step?
DORSEY: Well, what we are told is that originally, after checking the family and things like that, that are normal procedure in a case like this, they started reaching out to registered sex offenders just to ensure they were in the place that they were supposed to be in.
They started very close to the home and then moved out. Once they moved out, they ran across John Couey's name, and saw that he wasn't where he was supposed to be. They started investigating further and started hearing that he possibly was staying with family members in this trailer.
Now, I know that it's hard for you to see, but where the trailer is, is really only about 200 yards across the street and kind of cattycorner to the Lunsford home where Jessica went missing from.
When investigators went there and started talking to family initially, they were lied to about Couey staying there at all. Investigators then later, of course, found out that it was a lie that they were told and started looking into this further.
Couey had told people before he left town that police were looking for him. And that is when the search began. And they eventually found him. And (UNINTELLIGIBLE), and they've wrapped this up now, it seems like, Randi.
KAYE: All right. Sara Dorsey live for us this morning from Homosassa Springs, Florida. We will check back with you.
We also do want to remind you that coming up just about three minutes from now, we do expect a news conference. The Citrus County sheriff, Jeff Dawsy, is expected to speak with reporters. We do hope to get some more information now, having heard from our Susan Candiotti breaking some news that part of Jessica Lunsford's remains have indeed been found on the property there in Florida.
We'll take a break here, and we'll be right back.
(COMMERCIAL BREAK)
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Aired March 19, 2005 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: Today on OPEN HOUSE, buying, then selling real estate, sometimes even before the contract ink is dry. Can you get rich quick, or just take on too much risk?
Then, moving scams. Federal laws provide little protection, but you can protect yourself as well as your stuff. We'll walk you through the options.
And our weekend project, keep your home's value from slipping down the drain. It's a bathroom update on a budget.
All that and more, next on OPEN HOUSE.
GERRI WILLIS, HOST: Hello, and welcome to CNN OPEN HOUSE. I'm Gerri Willis.
From buying and selling to renovation and design, we show you how to make the most of your biggest investment, your home.
Today, we go beyond that to look at a popular strategy for real estate investing, that's buying a place before it's built, and selling it at a profit almost immediately.
We went to Palm Beach County, Florida, for a closer look.
(BEGIN VIDEOTAPE)
WILLIS: Genay Leitman feared missing the boat, so she jumped on the latest hot money trend, buying and selling property fast.
GENAY ANN LEITMAN, REAL ESTATE INVESTOR: I have seen how the growth has occurred in the last 10 years that I've been living in Florida. And I've missed opportunities where I could have doubled and tripled my money on condominiums near the water and on the water. And when I saw this property opening in Boynton, I said, That's for me.
WILLIS: Before the builder even broke ground, she snapped up five properties in Marina Village valued at $2 million, of course, putting down a percentage of that.
(on camera): You've already invested, what, $200,000?
LEITMAN: At least.
WILLIS: Yes. LEITMAN: Yes.
WILLIS: And what kind of return do you expect to get in these properties?
LEITMAN: Right now, I would think I could probably double my money.
WILLIS (voice-over): Jack Alkovich (ph), Leitman's real estate agent, and, you could say, investment adviser, expects she will do it. These condos are so hot, they were snapped up right after the plans were announced.
UNIDENTIFIED MALE: This complex, Marina Village sold in three days.
WILLIS: That's the trick, find preconstruction properties so popular investors can buy and sell at a profit, often before closing on the mortgage, and before the building is complete.
But this trend is also creating a vicious circle, sending real estate prices beyond the reach of many of those living where this kind of investment is rampant.
(on camera): Condominiums are clearly popular with south Florida investors, but as demand grows, prices rise. Adding to that house inflation, increased prices for land, labor, and materials.
(voice-over): In Palm Beach County, for example, the median price for a home is more than $383,000, up 34 percent just this past year. Only in Las Vegas and Riverside, California, are prices rising at a faster clip.
And this has even some developers complaining.
UNIDENTIFIED MALE: The land prices wouldn't be escalating at the rate that they are if the investors weren't buying up the units and causing developers like myself to have to go out and replace that inventory.
WILLIS: For Leitman, though, if it makes money, it makes sense.
LEITMAN: I still have money in the stock market. But I'm slowly putting it into real estate.
WILLIS: And this is the kind of investment she can also call home.
LEITMAN: I'm planning on living in the two-bedroom.
(END VIDEOTAPE)
WILLIS: OK, call it quick-turn investing, call it speculation. It has risks and rewards for individual investors.
For more, we turn on the author of "Secrets of a Millionaire Real Estate Developer," Mark Weiss, who joins us from Chicago.
Welcome, Mark.
MARK WEISS, AUTHOR, "SECRETS OF A MILLIONAIRE REAL ESTATE DEVELOPER": Hi, Gerri. Thank you.
WILLIS: Good to have you here.
I think everybody is looking at that in, you know, speculation and investing, what is it? And how common is this kind of speculation right now?
WEISS: Well, you know, it's common in cycles. Right now, it's very hot from coast to coast. This topic is on everybody's lips, because it seems to be something that is so popular for investing. Certainly the stock markets let everybody down, or many people down, and...
WILLIS: Absolutely true.
WEISS: ... real estate is solid.
WILLIS: How do these investments work, in a nutshell?
WEISS: Well, in a nutshell, before something's built, the lender for the developer will require that presales take place. So in order to do that, and then show the lender that they have something sold, they can then get their construction money to build. They go and build trailers, marketing, facades, and presell units in order to get contracts and come back to the bank who's funding the deal, and say, We're ready to build, we've got contracts, showing that the market is ready to move in or buy our product.
WILLIS: Now, Mark, you are one of these people who knows a lot about speculation and the kind of investing that is going on now. But you don't really do it. How come?
WEISS: Well, I invest in many different types of property. I can't do everything. I have just made some choices. And who knows? Maybe I will at some point. (UNINTELLIGIBLE)...
WILLIS: Well, let's -- is there -- are there downsides? I guess that's what I'm getting to. I think there's a lot of excitement, euphoria out there in the marketplace for real estate and for some of this quick-turn investing. But what I'm wondering about is, is this another dot -- stock dot-com scenario just waiting to unfold?
WEISS: Oh, it certainly is. I mean, if you think back about four years, when the dot-com bubble burst, people who had contracts on new developments, in many different areas, were hoping that people who were flush with cash would continue buying and continue buying and continue buying.
And then they were absent in late '99 and 2000. When products were then delivered, when units were delivered in '01 and '02, there was no one to buy these contracts that people had been sitting on for a couple of years. The downside is, you have to close, or you walk away from your earnest money. If you close, you've got the expense of assessments and other carrying costs.
WILLIS: So you have to be prepared to not find that (UNINTELLIGIBLE) at the end of the day, and take ton burden of the mortgage yourself, right?
WEISS: Or walk away from your earnest money and just leave it on the table.
WILLIS: Yes, it doesn't sound like a good scenario if the market turns on you.
Let's just walk through some of the steps of this, if you actually are going to go out and speculate in the marketplace. You would start probably by finding a professional, right, somebody who would give you great advice. How do you do that?
WEISS: Well, I think if you're going to any market, you want to find someone who is a successful real estate broker in that market, not connected to the sales trailer or hype that's going along with the respective development, but someone who can take you around and show you what is being built where, and basically which buildings are in the most demand and are not being compromised (UNINTELLIGIBLE), just like you would look for a home.
WILLIS: OK...
WEISS: Have a Realtor show you comps, and study and do your homework.
WILLIS: What other research would I do, Mark?
WEISS: I think certainly using the Internet and the Web, finding things for yourself. You know what I love to do with people or suggest to folks is just go on Sundays to look at what resales are going for, as well as the new construction trailers.
WILLIS: All right.
WEISS: Educate yourself.
WILLIS: Yes, I need to get to marketing, though. We don't have a lot of time left. Let's talk just for a second about how you're going to sell that contract then when the time comes.
WEISS: Well, as soon as you sign that contract, you want to list it with a Realtor and get it into the multiple listing service, which is in every major city, so that someone coming into that market can see that your unit is for sale, and hopefully want to move into that new development and take you out.
WILLIS: All right. Well, Mark Weiss, thanks so much for your time today.
WEISS: Thank you. WILLIS: Coming up on OPEN HOUSE, don't be taken for a ride. A look at common moving scams and what you can do to avoid them.
And our weekend project, create a better bathroom. It all starts with the sink.
But first, your tip of the day.
(BEGIN VIDEO CLIP)
ANNOUNCER: Finding the right home inspector can save you lots of money. But be wary of referrals given to you by your real estate agent. Instead, check out the American Society of Home Inspectors Web site to find a reliable professional. Members of this group are required to have conducted at least 250 paid inspections.
Simply go to www.ashi.org. Go to Find an Inspector, enter your location, and you'll get an extensive list of qualified home inspectors in your area.
And that's your tip of the day.
(END VIDEO CLIP)
WILLIS: Moving scams are growing, especially with more business done over the Internet. And there are few federal laws to stop it, so you have to protect yourself.
Chris Huntington has a case in point.
(BEGIN VIDEOTAPE)
CHRIS HUNTINGTON, CNN CORRESPONDENT (voice-over): When Lauren Eisenberg hired movers to take her belongings from New York to Florida, she thought she'd found a deal that was too good to be true.
And it was.
LAUREN EISENBERG: I made the decision to look online to find a moving company. And when I did my research, I came across what I thought was the most economical.
HUNTINGTON: But it turned out to be far more expensive. Lauren's possessions were damaged or missing, and those that did arrive came weeks late, along with a bill that was more than twice the amount originally quoted. And she had little recourse.
EISENBERG: I at that point took it up with the Better Business Bureau, who, a couple of weeks later, sent me a letter saying that the company actually was no longer.
HUNTINGTON (on camera): It's an increasingly common problem. People will find a mover online, the Web site will look very professional, but it will turn out to be a fly-by-night operation, the kind that go out of business fast, only to pop up somewhere else later under a new name, all to stay one step ahead of law enforcement. (voice-over): The Federal Motor Carrier Safety Administration, which is part of the Department of Transportation, says the number of these companies has soared over the past 10 years, along with the proliferation of the Internet.
Administrator Annette Sandberg says the most common scam is jacking up the price and holding the goods hostage.
ANNETTE SANDBERG, FMCSA ADMINISTRATOR: Once they get everything on the truck, they say, Oh, that $2,000 we quoted is inaccurate. If you want your goods back, now that they are on our truck, you are going to have to pay $6,000 or $8,000.
HUNTINGTON: But federal law limits a mover from charging more than 10 percent above the estimate. The authorities say reputable movers will know that, and they'll provide consumers with legitimate contracts that spell out everything in the fine print. And the Department of Transportation can verify their legitimacy at 1-888-DOT- SAFT.
For Lauren Eisenberg, it's a lesson learned.
EISENBERG: (UNINTELLIGIBLE) that, you know, it is a bigger name, and maybe pay a little bit more money, but just to have the reassurance that your stuff is going to get there and get there in one piece.
WILLIS: For OPEN HOUSE, Chris Huntington, CNN, New York.
(END VIDEOTAPE)
WILLIS: How else can you protect yourself? The March issue of "Consumer Reports Money Adviser" focuses on avoiding moving-day surprises. The deputy editor, Lisa Lee Freeman, is here.
Lisa, welcome.
LISA LEE FREEMAN, DEPUTY EDITOR, "CONSUMER REPORTS MONEY ADVISER": Thank you. Nice to be here.
WILLIS: Good to see you again.
I just want to start by talking about, in a nutshell, what these scams are, how they work.
FREEMAN: Well, basically, what they do is, they lowball you on the bid. You go for the bait. They load up the truck, and then they jack up the price, and they hold your stuff hostage until you pay up. And you may never see everything you own ever again. They can just drive off into the sunset with it.
WILLIS: And it sounds like a nightmare. Well, let's talk about warning signs because I know there are warning signs out there, starting with the quote that you get.
FREEMAN: Yes. If the quote is in -- is based on volume and not weight, that could a problem. Often the fly-by-night organizations don't base their quotes on weight, instead they base it on cubic feet.
WILLIS: All right. And what about not getting a binding quote? Is that a bad thing?
FREEMAN: Yes, you want to make sure you get a binding quote that lays out all of the expenses up front.
WILLIS: OK. And I've heard of cases where people get ready for moving day, and here comes the truck, but it doesn't have the logo of the company on it.
FREEMAN: That's right. If it's -- if it doesn't have the logo of the company on it, and it's a rental truck, I think that's a pretty bad sign.
WILLIS: I guess we should also be talking about the lowball quote. And we were talking about this before, right?
FREEMAN: Yes.
WILLIS: You can't skimp on moving.
FREEMAN: No, do not cut corners. Go with somebody that you know is good. Get a recommendation from a real estate agent locally, from your employer, from someone you know that's recently moved. That's the way to get the name of good movers. And don't try to go for these lowball quotes that you will find over the Internet, because often they are too good to be true.
WILLIS: All right. Too good to be true is always a problem. Let's talk about some more ways of avoiding scams. You started to talk about, you know, doing the background check on these movers. Are there other resources that you can look at besides just talking to friends and family?
FREEMAN: Oh, yes, absolutely. After you've got the names of a few movers, what you want to do is go on the Internet and go to the Better Business Bureau's Web site, BBB.org. Moving.org is a great Web site. It's run by the American Moving and Storage Association. And they actually have lists of certified movers, so you can also get actually recommendations from there.
Also go to movingscam.com. They have lots of information on there, including a blacklist of movers that have had a lot of complaints against them.
WILLIS: That sounds great, a blacklist of movers. People should definitely check it out.
Now, you say also that you might want to think about looking very closely at insurance as well. And this is tricky, because they're going to want to sell you one kind of insurance, but maybe you want to get something else?
FREEMAN: Well, actually, insurance usually comes with the move. But what you want to do is make sure you get full-value insurance. WILLIS: What does that mean?
FREEMAN: Well, that means it will cover the cost of the full item. You may only get $40 for that big-screen TV that they crack and break on the way into your house. You want to make sure that that's covered in full.
WILLIS: Makes a lot of sense.
Anything else I should know? And any other ways of checking out movers? Because I know people out there, they are worried about this. They're concerned. They certainly don't want to lose their goods, and they don't want to lose their money.
FREEMAN: Right. Well, the main thing is, don't find movers on the Internet. Get recommendations. Call the movers, ask them for references. Do not go to these sites that say they are going to give you multiple quotes from different movers. They may be fly-by-night organizations, you never know.
WILLIS: Lisa, is there a way I can know what I'm going to pay before I pay it, though? It would be nice if I came to the table knowing exactly what I should be paying (UNINTELLIGIBLE).
FREEMAN: OK, this is a very good point. You want to make sure that the moving company sends over a rep to eyeball your stuff to make sure that you get an accurate estimate. That's a very important part of the process.
WILLIS: And don't do it on the Internet.
FREEMAN: That's right.
WILLIS: Lisa, thanks so much for being with us.
FREEMAN: You are welcome.
WILLIS: Coming up, our weekend project. Want modern efficiency with classic looks? We'll show you how to replace those old bathroom fixtures, coming up next on OPEN HOUSE.
ANNOUNCER: This is CNN Breaking News.
RANDI KAYE, CNN ANCHOR: And good morning, I'm Randi Kaye at the CNN Center in Atlanta.
We do have some breaking news in the case of 9-year-old Jessica Lunsford, the missing Florida girl. We want to get right to the presser from earlier this morning. This is a press conference where her father, Mark Lunsford, came out and spoke to reporters for the first time since hearing from police that a sex offender that had been living in the area has confessed, according to police, to kidnapping and killing his 9-year-old daughter.
Let's listen to what Mark Lunsford had to say earlier this morning. (BEGIN VIDEO CLIP)
MARK LUNSFORD, JESSICA LUNSFORD'S FATHER: (audio interrupt) need more people to support now the efforts that we tried to make to change things.
I love everybody for helping, for supporting, for even talking about it. But Jesse is home now, and she is right here with me. And she knows, she knows it all.
And all the parents out there -- I know everybody does, but do it more often, make sure you get that hug and kiss every day before you leave that house. I did. I got mine. You just make sure you get yours. And remember, love your children this much, and no one or nothing will come between you and them.
Thank you.
(END VIDEO CLIP)
KAYE: Once again, there you have Mark Lunsford, the father of 9- year-old Jessica.
A search is underway on the property there in Homosassa Springs, Florida.
We do have some breaking news that we want to get right to.
Susan Candiotti is in Augusta, Georgia, where Couey, the suspect in this case, is being held. Susan, what can you tell us?
SUSAN CANDIOTTI, CNN CORRESPONDENT (on phone): Hello, Randi.
Some sad news to report. According to law enforcement sources, in the middle of the night, investigators searching the area behind the house where John Couey had told them to look during his alleged confession yesterday, investigators have recovered part of Jessica's remains. Sources say it is a skull believed to be of a little girl.
Police say that Couey confessed to abducting and killing the little girl. He's a convicted sex offender, that he said that he took her from her home, the little girl, back on February 23, in the middle of the night.
As you heard just a few moments ago, as you replayed part of what Jessica's father had to say, he was choking back tears when he said, She's home now, referring to his little girl.
Now, we will hear more details, presumably, about this from Citrus County Sheriff Jeff Dawsy at the top of the hour, when he tells us more about this, as well as additional information about the status of John Couey, who, as the sheriff said yesterday, after being interviewed for several hours over the course of two days, broke down in tears, evidently, when he told authorities that, in fact, he had kidnapped and then killed Jessica, and, according to sources, buried her behind the house where he had been living with relatives. Also, we will learn additional information about the next step for John Couey, whether he will be charged and whether he -- and when he will be brought back to Florida. It is possible that there might be a second extradition hearing for him. Yesterday in Augusta, Georgia, he did waive extradition based on probation violation charges, and agreed to return voluntarily to Florida.
Now, the question is, whether he will be charged in Florida, and whether he will have to face another extradition hearing in Georgia before he is brought back to Florida. We hope to get those answers from Sheriff Dawsy shortly.
In the meantime, John Couey, according to authorities here in Augusta, is under a suicide watch at the jail here, Randi.
KAYE: And Susan, if we could just get back to -- you were reporting that part of Jessica Lunsford's remains have been found there near her home. Yesterday, we were told by authorities that John Couey had given them a general area, apparently, in his alleged confession, a general area to search. Any idea where in that area they may have found these remains? And when they might have found them?
CANDIOTTI: We know that it came at around -- somewhere around 2:00 in the morning. Specifically, no, authorities at the time that I spoke with them were not releasing those details. It is possible, of course, that the sheriff might get into that, in the -- into a little more detail when he talks with the press in just a few minutes from now.
KAYE: All right. Susan Candiotti with us from Augusta, Georgia, bringing us some breaking news in the case of 9-year-old Jessica Lunsford. Susan, thank you.
And we also now want to go back to Florida and check in with Sara Dorsey, who has been covering this story from the scene there. Sara, as you just heard, Susan Candiotti telling us part of Jessica's remains reportedly have been found on the property, maybe around 2:00 a.m. this morning. Have you heard anything about this there? And have you seen anything to suggest that this indeed is the case?
SARA DORSEY, CNN CORRESPONDENT: Well, we have seen a medical examiner's car on the scene, of course, crime scene investigation vehicles were here last night.
Just a tragic end to this story. Three weeks that this family has been searching for their little girl. Not the news that they wanted to hear, of course.
We are awaiting a 10:00 a.m. press conference with Sheriff Jeff Dawsy. He is from the Citrus County Sheriff's Office, who has been leading this investigation the entire way. And we'll tell you that I -- this has been a tough investigation for that department. They really had no solid leads going into this. Couey was a person of interest, but not necessarily a person that they believed right off the bat would know something, just someone that raised a few red flags.
And, of course, then we do now, as Susan just told us, sources tell her exactly how he confessed to that crime after a polygraph, telling the investigators, I don't even need to know the results, apologizing for wasting their time, and then, of course, allegedly confessing to this crime.
I'm going to show you that the search is happening behind the trailer that Couey was sharing with family members. You can see a truck kind of blocking our view. There's also a tent there covering an area where searchers were looking last night. We saw investigators take out some things from around that home, a bicycle, a mattress, not clear at this point whether any of those things have anything to do with this investigation, or if investigators were simply moving those out of the way.
We hope to find out more information about what Susan had just reported in this 10:00 press conference with Sheriff Dawsy, hope to understand more about the circumstances surrounding this entire investigation, Randi.
KAYE: Sara, Jessica had disappeared about three weeks ago. The case did get off to a very slow start. We do know that John Couey is a convicted sex offender. But how did police end up on his front step?
DORSEY: Well, what we are told is that originally, after checking the family and things like that, that are normal procedure in a case like this, they started reaching out to registered sex offenders just to ensure they were in the place that they were supposed to be in.
They started very close to the home and then moved out. Once they moved out, they ran across John Couey's name, and saw that he wasn't where he was supposed to be. They started investigating further and started hearing that he possibly was staying with family members in this trailer.
Now, I know that it's hard for you to see, but where the trailer is, is really only about 200 yards across the street and kind of cattycorner to the Lunsford home where Jessica went missing from.
When investigators went there and started talking to family initially, they were lied to about Couey staying there at all. Investigators then later, of course, found out that it was a lie that they were told and started looking into this further.
Couey had told people before he left town that police were looking for him. And that is when the search began. And they eventually found him. And (UNINTELLIGIBLE), and they've wrapped this up now, it seems like, Randi.
KAYE: All right. Sara Dorsey live for us this morning from Homosassa Springs, Florida. We will check back with you.
We also do want to remind you that coming up just about three minutes from now, we do expect a news conference. The Citrus County sheriff, Jeff Dawsy, is expected to speak with reporters. We do hope to get some more information now, having heard from our Susan Candiotti breaking some news that part of Jessica Lunsford's remains have indeed been found on the property there in Florida.
We'll take a break here, and we'll be right back.
(COMMERCIAL BREAK)
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