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Open House

Do-It-Yourself Special

Aired August 27, 2005 - 09:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

GERRI WILLIS, HOST: It's our do-it-yourself special. We'll show you how to save yourself some money.
ANNOUNCER: Today on OPEN HOUSE: Do it yourself. This man did it. He reeled in homebuyers without paying a real estate commission. We'll show you the unusual secret of his success.

Plus, make your home safe from accidents and from burglars. We have quick and affordable solutions.

And our weekend project, create convenience in your own back yard. We'll look at what you'll need for the perfect outdoor kitchen, next on OPEN HOUSE.

WILLIS: Hello, and welcome to our do-it-yourself special on CNN OPEN HOUSE. I'm Gerri Willis.

The math is easy. If you sell your house and avoid paying an agent's commission, you keep more money for yourself. But how do you bring in buyers?

We met up with one man who found a unique solution.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: The next step was, they came in, and they were greeted by a mortgage broker.

WILLIS (voice-over): Larry Kagan is a lot like every other seller. He wanted to get the most for his home, didn't want to share profits with a real estate agent, and wanted it sold fast. But unlike many other sellers, he got his wish, finding the idea at a bookstore.

LARRY KAGAN, HOMESELLER: Well, I was in Barnes and Noble, and I was hanging out, drinking coffee with my wife, and we were looking through books, and we came across a book called, "How to Sell Your Home in Five Days."

WILLIS: The book and its companion Web site walks the reader through the process of selling a house by auction.

GEORGE CAPPONY, WWW.5-DAYSALE.COM: You can read it in about two and a half hours, and if you bought it on a Friday, you could sell your home effectively next weekend, if you so desired.

WILLIS: Kagan spent a week and about $2,500 prepping for the auction. He staged his home, as you would for any open house, created an 18-page brochure on his computer for potential buyers, took out ads in the local newspaper and on the Internet, and plastered signs around town.

Then, he opened bidding at just under $200,000.

KAGAN: I chose a low number to attract activity, because I wanted to have activity. And, you know, so somebody truly did have the opportunity to purchase this condo for below the market value. And the market ultimately would determine the final price.

WILLIS: He let people into his home from first thing Saturday morning through 5:00 p.m. Sunday. Throughout the weekend, potential buyers toured the condo and made bids in writing, which other bidders could see. To speed the process, he had a mortgage broker on hand, but no real estate agents in sight.

Kagan promised all bidders phone calls after 8:00 Sunday night for an update on their status.

KAGAN: Initially, I had 74 bids on my bidding sheets. So in the first round, I would call 74 people, and I would tell them something like this, Hi, this is Larry, calling from the condo in Plainview. The current high bid right now is $351,500. In order for you to advance in the next round, you have to move the bid up by at least $500. Where would you like me to place your bid?

WILLIS: The round-robin bidding took eight rounds, 100 phone calls, and a few hours to complete. The winning bid, $366,000, more than $166,000 from where it began.

KAGAN: I chose to sell my home this way because it's a win-win. It's a win for the buyer, and it's a win for the seller. You know, basically what we're doing here is, I'm able to not pay any sort of brokerage commissions, no brokers' fees. There's no broker involved. So I can afford to accept a lower price.

WILLIS: But brokers normally bring in prospective buyers. That means an auction like Kagan's is only for those who have the savvy to get people in.

CAPPONY: Understand how the flow of traffic is going to be, understand different forms of marketing that you have to do in order to bring the people into your home, and then try to understand effectively how the bidding process works.

WILLIS: For Kagan, all that made sense.

KAGAN: I sold this condominium, really, in two days. I sold it -- I showed it on Saturday. I showed it on Sunday, and sold it Sunday night to the highest bidder. And to me, that was the biggest benefit.

(END VIDEOTAPE)

WILLIS: Now, that was fast. Here to tell us more about selling your house on your own is Colby Sambratto. He's chief operating officer of ForSaleByOwner.com. Colby, good to see you.

COLBY SAMBRATTO, FORSALEBYOWNER.COM: Thanks for having me.

WILLIS: So this auctioning off a house, it sounds like it's so quick. But is it practical?

SAMBRATTO: I think the -- no, while I should say we don't offer options, I do know that it's been a staple in the real estate industry for a number of years. And I do just anecdotally know that there's a number of people who have been successful using that approach.

So I think that the answer is yes.

WILLIS: Well, it sounds like a good idea, then. What are the advantages, though, to selling on your own, whether you do the auction or you do it a more conventional way?

SAMBRATTO: I think the vast majority of people are going to tell you the reason they leave the more traditional route, which is one with an agent, is because there's enormous cost savings involved.

WILLIS: Let's talk about those. How much do you save?

SAMBRATTO: I think -- well, if you talk about the average commission charged by an agent in this country, it's between 5 and 6 percent. But, you know, if you talk -- keep the math simple as 6 percent, you're selling a $200,000 home, obviously, that's $12,000 you're going to fork over at the closing to that agent.

So that's considerable savings for most Americans. And what we hear time and time again is, people look at an alternative approach to selling a house because the savings are so great. They could put that money towards, you know, a child's education or their own retirement.

WILLIS: Sounds like a good idea. You say, though, that people underestimate the amount of work it takes. Specifically, what is it they mistime?

SAMBRATTO: I think there's a number of things they underestimate. I think they underestimate the importance of doing the proper research and spending the time to price that home appropriately, and I think they underestimate the effort that's going to -- that could be entailed by casting the widest net possible in your marketing effort.

So those are the two big stumbling blocks that we see most often.

WILLIS: And you've talked a lot about how marketing is really hard. What is the best way to advertise your house when you're selling it by yourself?

SAVIDGE:: Well, obviously, we're Internet guys. You know, 75 percent of all people in this country who are looking for a home start their search on the Internet. So it's really revolutionized the way that Internet-- or that real estate is bought and sold. Obviously, we think you have to use the Internet.

But on top of that, in certain regions, in certain localities, you can certainly use a classified ad in conjunction with that, if you know that there's a paper that has an especially strong classified ad section.

WILLIS: But when you talk about going on the Internet, there are lots of ways to do it. You know, you can go and be on some local Realtor's Web site, you can be on one of the Fisbo (ph) sites. What should you do? Should you create a -- your own site for your own house?

SAMBRATTO: I -- you know, it's possible. I think that if you are one of those people who's very Web-savvy, who believes that they can go out and do keyword advertising and do a proper marketing effort on the Internet, then certainly that might be something that you can pursue.

I think it's easier, probably, more realistic for most people to engage the services of professionals who are out there who do this on a daily basis.

But you're right, there's a multitude of models that are available to the consumer now, most of which revolve around the Internet, and they range from good, old-fashioned traditional Realtors all the way down to the ForSaleByOwner guys and everything in between.

WILLIS: Now, there's one shortcut your Web site has that I think you should talk about. The biggest tool for marketing, the MILOSEVIC listing, that's the marketing tool that most real estate agents use. But you can get people a listing on the MILOSEVIC. Right, Colby?

SAMBRATTO: That's right. And it's pretty popular in our site. Now, obviously, our core competency is just straight up for sale-by- owner listings. But about 15 percent of our users do take what we call our MILOSEVIC package, and that allows a seller to place their home in their local MILOSEVIC and market their home to Realtors and the buyers that those Realtors represent.

And at the same time, market their home on ForSaleByOwner.com. If it sells through ForSaleByOwner, you pay zero percent commission. If it sells through the MILOSEVIC, you pay between 2.5 percent and 3 percent.

So you've reduced your traditional commission by about half.

WILLIS: To find a qualified buyer, if you're selling on your own, what's the best way to do it?

SAMBRATTO: You know, I -- you should look for a company that provides that service for you. I think it can be pretty sticky for the average consumer to collect the Social Security numbers and to do a credit check and to establish whether or not that person's in a position to buy the house.

Sending them to a mortgage broker is usually a good idea, having them get prequalified, or, even better yet, preapproved for a mortgage that's roughly in the range of your asking price is a good idea, to get a feel for whether or not they're a serious buyer.

WILLIS: Colby Sambratto, great advice.

His Web site is called ForSaleByOwner.com.

Coming up on our OPEN HOUSE do-it-yourself special, making your home safer from accidents and from burglars.

And later on, our weekend project. Create your own outdoor kitchen.

But first, your tip of the day.

(BEGIN VIDEO CLIP)

ANNOUNCER: There are many home improvement projects that you can do on your own, but you should draw the line when it comes to working with electricity.

Electrical work is one of the most dangerous jobs for a homeowner to tackle alone. Experts recommend that you hire a professional electrician, even for the simplest of jobs, like installing a light fixture.

But if you insist on doing it on your own, remember to always turn off the power. And that means going to the electrical service box and shutting off the circuit-breaker. That way, there is no risk of coming into contact with any live wires.

And that's your tip of the day.

(END VIDEO CLIP)

WILLIS: Welcome back to OPEN HOUSE's do-it-yourself special.

No doubt you watch your children closely. But the truth is, accidents happen, and often in your very own home.

But there are things you can do to minimize the risk.

J.J. Ramberg recently met up with the Home Safety Council's Meri- K Appy for some insight.

(BEGIN VIDEOTAPE)

MERI-K APPY, PRESIDENT, HOME SAFETY COUNCIL: Throughout the home, every year, on average, there are some 2.3 million poisoning exposures, more than half to kids under the age of 6.

J.J. RAMBERG, CNN CORRESPONDENT (voice-over): Well...

APPY: One of the things that we've realized is that a lot of products in our home may be look-a-like poisons. Here's a cleaning product you wouldn't want your child to drink, and it look it looks very much like something you might let your child drink.

So parents need to look around their home, gather up anything that has on the label the words "Caution," "Warning," or "Danger." If you see those words, it means you should lock this stuff away from sight and reach of kids.

RAMBERG: Let's move on to the rest of the kitchen, because you have this masking tape down here, and I want you to explain what this is for.

APPY: I've created a little kid-free zone. Little children are very visual. And when we're teaching them to stay away from heat sources, it helps to have a marker on the floor. We just used masking tape for this. But you want to have your little children staying far away as possible from the stove.

RAMBERG: How many rooms do you need fire alarms in, every room?

APPY: Well, the new recommendations are at least one on every level, and inside every bedroom.

RAMBERG: OK.

APPY: And there's new federal research, which is -- kind of makes you stop and think. From the time a fire first breaks out to flashover, when everything catches on fire, can take as little as three minutes.

RAMBERG: Wow.

APPY: So you really have to know you have that fire, and that means working smoke alarms.

Falls are actually the leading cause of home injury-related death. In this case, there is a railing. That's a plus. But I'd really like to see railings on both sides of the stairs that extend the full length of the stairs.

And by railing, I mean a functional railing, round, that you can really grab onto.

RAMBERG: We get to the second floor, we run into a whole host of new problems, right?

APPY: We do. And windows happens to be one of the areas people should be concerned about, especially if they have little kids, babies, toddlers.

RAMBERG: OK.

APPY: One thing is, if you have screens, those are not sturdy enough to keep your kids inside, so you need a window guard or window stops.

RAMBERG: And that's probably a mistake a lot of people make. They think a screen will be enough. APPY: Screens are good for keeping the bugs out, but they won't protect your kids.

RAM berg: I want to ask about fire ladders.

APPLY: They're important to have, and they're easy, but you have to know what you're doing. Remember that we have maybe three minutes to get out of a fire, sound asleep. You don't want to waste it reading the instructions. So do that ahead of time, and practice putting it over your window.

One of the things you want to make sure is that it fits, that your ladder fits the windowsill you plan to use.

(END VIDEOTAPE)

WILLIS: You also want to keep your family and your home safe from burglars.

So I met up with Tom Kraeutler of "The Money Pit" radio show for some helpful advice.

(BEGIN VIDEOTAPE)

WILLIS: Tom, great to see you.

TOM KRAEUTLER, HOST, "THE MONEY PIT": Great to see you too.

WILLIS: Well, let's talk about this, because it's really pretty simple. You say there are easy things to do.

Krauthammer: Absolutely. Here's a landscaping trick of the trade that you can do in a week and that will keep crooks away. You want to see it?

WILLIS: Well, what's special about this? I just see bushes.

Krauthammer: These are barberry bushes. They're thorny bushes. There's a trend towards...

WILLIS: Ow, (INAUDIBLE).

KRAEUTLER: ... trying to -- Yes, they got you, right? They got you.

You want to try to put bushes around your house that are going to keep crooks away. They're not going to want to spend a lot of time with a big, thorny barberry bush. This will be four feet tall.

WILLIS: Wow.

KRAEUTLER: And it's a good thing to put around a window, especially one that's hard to kind of protect otherwise.

WILLIS: OK, Tom, you say this is the weak link of the house. KRAEUTLER: Absolutely, for a number of reasons. First of all, you have these large lilac bushes that are providing a lot of cover for a burglar to work. Number two, that's a basement window. It's single-pane glass, and it's very easy to break in.

WILLIS: What do you do?

KRAEUTLER: Well, a couple of things. I would recommend you put an alarm on that window, and also perhaps some security bars.

WILLIS: Are those dangerous, though?

KRAEUTLER: Well, that's a good point. Security bars can be dangerous if they're not the right kind of security bars. You need to make sure that they can be opened from the inside, but not from the outside, so if there's a fire, you can get out.

WILLIS: All right. Well, let's see your next spot.

KRAEUTLER: When you go on vacation, it's always a good idea to unplug your garage door opener. Sometimes garage door openers can be opened by someone else's remote. The burglar might drive up and down the street, trying remotes to see if your door opens. If the door opener is unplugged, there's no way it could open, and your house will be secure.

Here's a little trick that will cost you all of about a quarter. If you go away, take a bolt and put it in your garage door track, and leave it in there kind of hanging loosely. That way, if somebody tries to open this door, the wheels from the garage door will interfere with the bolt, and they won't be able to get the door open.

WILLIS: So, Tom, you've installed this lockbox, because, let's face it, nobody puts a key under the mat any more.

KRAEUTLER: Well, I bet there's a few people that do, but certainly this is a better option. This lockbox enables you to basically lock a key, a door key, inside.

WILLIS: Yes, but can't a burglar just rip this thing off?

KRAEUTLER: Well, sure, a burglar could. But you know what? When your key is locked inside this thing, there's no way the burglar will be able to get that box open and get to your key.

WILLIS: A lot of these solutions could be pretty expensive, when you get down to it. What about a cheap solution?

KRAEUTLER: Here's something that will cost you all of just one piece of wood. You measure your window from the top of the sash to the upper side of it. Cut the wood to fix in, fit in there. Simply slip it up there, stick it in place. And that actually will secure that window. It's better than a window lock. And no one nobody could open it up. Try it.

WILLIS: Not even me. Ah! (END VIDEOTAPE)

WILLIS: Here's something else you can do yourself that will protect your family. Check your insurance policy at least once a year. Make sure you're covered for any loss of big-ticket items you've recently purchased. And make sure your policy includes any renovations you may have done to your home.

You can get coverage for theft, fire, and even most weather from insurers, but you can only get flood insurance through the federal government.

Coming up on our do-it-yourself special, outdoor kitchens. You may need pros to help you with the installation, but we'll show you how to kick off the process yourself.

First, your mortgage snapshot.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

WILLIS: Welcome back to OPEN HOUSE.

There's nothing better in the summertime than firing up the backyard grill. If you always wanted an outdoor kitchen, we're going to show you options for every budget.

So if you want a really fabulous outdoor kitchen, you need four things -- the grills, the separate side burners, the fridge, and a sink. And we've got one right here.

LISA DAVENPORT, LISA DAVENPORT'S HOME GALLERY: This is not only a sink. We have here a complete beverage center.

RAMBERG: What's the price on this?

DAVENPORT: This is running about $2,000.

WILLIS: So if my goal is to get the kids through college rather than to pay that much for a sink, are there other options out there?

DAVENPORT: There are some great options. OCI puts out a beautiful sink. It is much larger. And then, in my opinion, the best one on the market right now is Cal Flame.

WILLIS: Why do you like that one?

DAVENPORT: It's 14 by 14, so it's good size. But the most important thing is, it's only $150.

WILLIS: (INAUDIBLE), that's great, $150. Much better than the $2,000.

DAVENPORT: Exactly.

WILLIS: All right, let's look at the next product.

OK, so here's the fridge that you have. Pretty much space there.

DAVENPORT: There is a fair amount of space in here. What I love about Viking's refrigerator here is, you can choose which side you want the hinge on.

WILLIS: What other options do I have?

DAVENPORT: You have Summit, which is very close in the price point. This is about $2,000, Summit's about $1,700. But you don't get a choice on your hinge. You get everything else. It's still encased in stainless steel. It still will be impervious to the elements. But it only has a one-year warranty. This is a five-year warranty.

WILLIS: OK, here we have the side burners. Obviously, if you want corn on the cob, you want side burners. And now the idea, of course, to separate it from the grill.

DAVENPORT: The other thing that's wonderful about this is, it's a double burner, not a single burner. You have a cover for storage. When you're not out here in December, you have a cover on top of this. And you've got about 15,000 BTUs out of each one of these burners.

WILLIS: That's a whole lot of power.

DAVENPORT: That is a whole lot of power.

WILLIS: Now, how much does this go for?

DAVENPORT: This one's running about $900.

WILLIS: So if I want to spend less, what can I do?

DAVENPORT: Well, there's a couple different products on the market. DFC puts out a beautiful one that's a single burner, about $400. So, yes, you're not really getting the cost-effectiveness that you could with two. And then Weber puts out one. Weber's is not stainless steel, it's a single burner, but it serves its purpose.

WILLIS: Here's what I've been waiting for, the grill.

DAVENPORT: The grill, yes.

WILLIS: Now, this is the heart of everything, right here, obviously. You want to make sure you get the grill right. This is a very high-end grill, lots of cooking space. Really attractive. How much does this Viking go for?

DAVENPORT: This one's about $4,000.

WILLIS: Wow, $4,000.

DAVENPORT: Yes...

WILLIS: (INAUDIBLE)...

DAVENPORT: ... (INAUDIBLE) a lot of bells and whistles.

WILLIS: Tell us about those bells and whistles.

DAVENPORT: OK. You put a steak on this. And as the fat drips down, it smokes back up. Now you get the feeling of the smoked or the taste of the smoked steak.

WILLIS: What else can I do?

DAVENPORT: Kenmore Elite is very, very similar in size, has about the same BTUs. It also needs to be insulated. As your cabinets come around your grill, obviously we know how hot a grill gets, we need to make sure that we've insulated the cabinets.

WILLIS: How much is the Kenmore, is what I --

DAVENPORT: Seventeen hundred dollars. Weber puts out a grill that has a professional stainless steel look to it, although it's not a drop-in. So it's on a stand with stainless steel doors inside.

WILLIS: So it would set aside from your kitchen.

DAVENPORT: It would, absolutely. But at $700, you maybe want to set it aside.

WILLIS: Lisa, thanks for being with us.

DAVENPORT: Thank you.

WILLIS: Well, clearly, you can spend anything you want to on an outdoor kitchen. But baseline, you're going to have to have $3,500 to get started.

We'll be right back.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

WILLIS: Coming up next week on OPEN HOUSE, storm season kicks into high gear. We'll show you how to protect yourself.

Thanks for watching our do-it-yourself special right here on OPEN HOUSE. We'll see you next Saturday. Have a great weekend.

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