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OPEN HOUSE

Violent Windstorms Caused Many Problems Throughout The Northeast; Protecting Your Home From Wind Damage; Making Money On EBay; Buyers Who Put No Money Down May Take On Risks; Buying A New TV In Time For Super Bowl

Aired January 21, 2006 - 09:30   ET

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


(COMMERCIAL BREAK)
GERRI WILLIS, CNN ANCHOR: Dangerous storms create serious problems again this week. This time, it's the Northeast that was hit by fierce winds. But it can and it does happen everywhere. We'll show you how to protect yourself.

Good morning, I'm Gerri Willis. Today on OPEN HOUSE, how to cope in this age of crazy weather.

Also, I'll make it easy for you to make money. I've got a crash course on eBay.

And getting the perfect television in time for the Super Bowl.

First, the weather.

(BEGIN VIDEOTAPE)

WILLIS (voice-over): From Maine to South Carolina, almost half a million homes left in the dark, the biggest loss of power since 2003's massive blackout. The culprit this time, violent windstorms, which knocked down trees throughout the Northeast, causing chaos for commuters, damaging homes, and cutting power lines.

UNIDENTIFIED FEMALE: There's a tree down over there. Tree down over there. You could see our tree. We have no power, no gas, no heat. Nothing, nothing.

WILLIS: Beyond this storm, and even outside of hurricane season, wind can create problems across the country. Nor'easters hit the Northeast, the South and Midwest face tornadoes. And just this week, heavy winds in New Mexico and California spread destructive fires, burning several homes.

CNN meteorologist Jacqui Jeras says, it all comes down to a clash in weather systems.

JACQUI JERAS, CNN METEOROLOGIST: The purpose of Mother Nature is to create a state of balance. Wind is its way of transporting warm air. Warm air moves towards areas of colder air to help create that equilibrium. Now, cold air is more dense than warm air, so there's a difference in pressure. That's why you see our low-pressure areas and our highs on all of your typical weather maps. The greater the difference in temperature, the greater the difference in pressure, the stronger the wind speed will be.

WILLIS: Wind gusts that hit the Northeast were nowhere near hurricane-strength winds that devastated the Gulf Coast last year. This week's storms show even moderate gusts can cause extensive damage to homes, cars, and businesses.

(END VIDEOTAPE)

WILLIS: That looks like my neighborhood. How can you protect yourself and your property from sudden wind damage?

Well, here to help is Michael Schlacter. He's chief meteorologist at Weather 2000. Michael, great to see you again.

MICHAEL SCHLACTER, CHIEF METEOROLOGIST, WEATHER 2000: Same here.

WILLIS: All right, so what's up with the crazy weather? I think everybody is wondering, it's hot, it's cold, I don't know what to do. Is this a sign of things to come?

SCHLACTER: Well, we're having a very volatile winter season. That's really the key word. Several cold weeks in December, several warm weeks in January. And when you have those swings, one of the byproducts is strong windstorms.

WILLIS: And we've had a ton of that. Let's talk a little bit about how you can protect yourself and what you need to do. I know I'm watching the weather prognostications all the time, but I don't really know how to read the weather signals. At what speed are you in the danger zone?

SCHLACTER: Pretty much when you see the forecast calling for sustained winds of 25 to 35 miles per hour, or you hear about wind gusts of 40 to 50 miles per hour. That's when damage to your home and your property really become a topic.

WILLIS: All right. Well, tell me what happens at different speeds. Can you give me anything more specific?

SCHLACTER: Well, pretty much once you cross that 30-mile-per- hour threshold, you really start blowing around the whole neighborhood. And that's branches, trees. Any kind of debris in your backyard or in the neighborhood can fly into your home.

WILLIS: Right, exactly. Well, then, when are the, you know, big electrical posts going to come down, at what level? And when do the trees come down? When do I really need to start being worried?

SCHLACTER: Well, a lot of it has to do with how saturated the ground is. If the ground is very soggy, those trees are going to be more vulnerable to fall over, including those power lines. But usually around 40 or 50 miles per hour, which we had in the Northeast a few days ago, that's the type of damage that really knocks down those trees and those power lines.

WILLIS: All right. We talk all the time about making sure you don't have anything in your yard that's sitting outside that can turn into a projectile. But beyond that, what can you do to protect your house and your home?

SCHLACTER: Well, people should get together with the other people in their neighborhood, maybe contact some arborists that could treat diseased trees or dead trees or old trees, and really trim those branches down.

WILLIS: That's always a big problem. If the tree falls on your house, you're really hurting.

SCHLACTER: Absolutely. And even if the tree stands, if one of those branches gets blown into your windows or the side of your home, that's going to be a significant damage. So...

WILLIS: Yes, that's a big worry for me.

SCHLACTER: Exactly.

WILLIS: So beyond the trees, and obviously you probably want to bring in a professional for that, what else should I be looking at, the roof? Is there any way to make sure that that roof is secure?

SCHLACTER: You pretty want to make sure that the tiles on your roof are pretty much new and solid. But more importantly, it's the items around your home, in your backyard, that, if your neighbor isn't cleaning up, but you are, it doesn't help. So everyone should work together, put away those patio umbrellas, those tables, those chairs, really make sure there's not a lot of clutter that can be thrown into either yours or your neighbors' homes.

WILLIS: Now, we learned during the hurricanes that, you know, even tornadoes, really, that garage doors can be a real problem. You've absolutely got to close them, because they create sort of a suction force, right?

SCHLACTER: Absolutely. You don't want to give any kind of handhold or leverage for those winds to pick up. So if you have seams that are loose between the walls and the ceiling, either in your garage or with doors, don't open the windows, don't open doors, try to make things as airtight as possible.

WILLIS: What about windows?

SCHLACTER: Well, one of the biggest myths is that opening up your windows when a big wind event comes, like a tornado, kind of equalizes the pressure. That's a complete misnomer. People should seal everything, stay away from their windows. Basically, thickness and sealing are the two most important things to do with your home.

WILLIS: What about trailers? Because, you know, I mean, it always seems like those are the kinds of homes that get hit hardest. Is there anything that people living in trailers should do?

SCHLACTER: Well, unfortunately, they're very lightweight, so they can kind of get moved and buckled around. Probably if the wind event has advance notice, the best thing to do is to evacuate. But if they are basically have to stay there, just seal those windows, seal those doors, maybe to get as low as possible.

WILLIS: Michael, you know, you make your living forecasting the weather, long, long, long range. So is the -- are we going to get more of this? Do we have to put up with these horrific windstorms even more in the future?

SCHLACTER: Unfortunately, I believe so. We're in a new cycle of active hurricane seasons, harsh winters, and definitely a lot wind and tornadic events. So the tumultuous weather is something that's probably going to be here for several more years.

WILLIS: Well, I'd like to say thank you, but I'm -- we'll be watching your Web site. Give us the URL, if you would.

SCHLACTER: Weather2000.com. We basically consult people in industries that are affected by seasonal weather.

WILLIS: Thank you so much, Michael.

Next on OPEN HOUSE, I'll show you how to really clean up. Making money on eBay isn't as hard as you think, even for the computer phobic.

And later, don't know where to start? We've got the lowdown on buying a flat-panel TV.

But first, your tip of the day.

(BEGIN VIDEO CLIP)

WILLIS (voice-over): Maintain the condition of your home by keeping moisture out. It's the number-one source of damage to homes, causing problems like cracked paint and mold.

Keep indoor humidity below 60 percent by using ventilators, air conditioners, and dehumidifiers. Check for leaks in the basement on a regular basis, especially after rainstorms. Use exhaust fans or open the windows when cooking or washing dishes. Fix leaky faucets and pipes as soon as you find them. Clean and dry out wet or damp areas within 48 hours. And always keep your home well ventilated.

And that's your tip of the day.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

WILLIS: Holiday shopping bills are rolling in. So if you're looking for a little extra money, here's a how-to on getting some cash for your trash.

(BEGIN VIDEOTAPE)

WILLIS (voice-over): This man's attitude is pretty common. UNIDENTIFIED MALE: I'm a technological idiot. And the other thing is, it's a lot of work...

WILLIS: He wants to sell his stuff on eBay, but he's paying a service to do it for him, when, in fact, it's really not that hard.

To learn how, we turned to Brian Clark of the Tech Enthusiasts Network.

BRIAN CLARK, TECH ENTHUSIASTS NETWORK: Well, you know, maybe in the past it was a little bit difficult. But right now, they have taken eBay and made it so simple.

WILLIS: How do I get started?

CLARK: The first thing you do is, you go up here and you click on "Sell" at eBay.com.

WILLIS: Right off of the home page.

CLARK: Right off of the home page.

WILLIS (voice-over): Next, click on "Sell Your Item." You have to create a username and a password. You can also click on "Learn How to Sell" for more help.

(on camera): So this gives you some steps.

CLARK: It does. It gives you a lot of information here about what you should do...

WILLIS (voice-over): Next, choose your selling format. We're using an iPod as an example. So we select "Sell an Item at Online Auction," and click "Continue."

(on camera): So you got to browse categories?

CLARK: You can browse categories here, so you can -- there you can see that people can sell antiques or cars or camera phones or coins.

WILLIS: Are we in electronics, or where are we?

CLARK: We're in electronics right now.

WILLIS (voice-over): Now, you have to describe your item and come up with a price.

CLARK: So what we're going to do is, we're going to put in a starting price here. And we're going to put in a starting price that's fairly low, because what that does is, it actually starts the bidding low and allows it to drive up...

(CROSSTALK)

WILLIS: Put that right in there. CLARK: So we put that in...

WILLIS: What happens next?

CLARK: We want to decide how long we want the auction to last.

WILLIS: Now, how do you figure that out?

CLARK: Well, if you think you have a hot item, the longer you allow the auction to last, chances are, the item's going to get bid up.

WILLIS (voice-over): Now add pictures, then put in the payment methods and shipping information.

CLARK: We're going to use PayPal. Now, that's something else you're going to need to do is, register for a PayPal account, because PayPal allows anyone with an e-mail address to send you money. And you want to get your money.

WILLIS: Sounds like a good deal.

(voice-over): To get it, you need to market your item wisely. That's where Janelle Elms comes in. She's ELMS of "The Seven Essential Steps to Successful eBay Marketing."

JANELLE ELMS, AUTHOR, "THE SEVEN ESSENTIAL STEPS TO SUCCESSFUL EBAY MARKETING": There's 55 characters in the title of your auction listing. This is the most valuable real estate you'll own on the site itself. Anything that a buyer may type in to find your item, your title should include it.

WILLIS (voice-over): And remember, pictures are worth a thousand words, and maybe even more dollars.

ELMS: Eighty-three percent of the public on eBay, the buying public, will skip over your listing without a picture. Take a photo as though you do not have a description, and write a description as though you do not have a photo. If you follow that rule, and I still do after seven years of being on eBay, you will succeed in that area.

WILLIS: Also, keep it simple.

ELMS: Give the text very simple, plain information, everything black and white. Because you have about 10 seconds to grab their attention before they're on to something else.

WILLIS: You'll attract more customers if they feel they'll be well served.

ELMS: If you put your listing up with a customer service sense to it, then you're going to attract more people. You're going to attract more bidders to that listing. eBay's even found that if you say the words "100 percent money-back guarantee," you're going to get 6 percent higher bids, yet only 1 percent of the community is going to utilize that 100 percent money-back guarantee. The next thing is to make sure that you have shipping information always in your listing. Never leave this part out, because, again, your buyers want to know exactly what they're paying for in the listing itself.

WILLIS: An added tip, offer free shipping. That's likely to generate more buyers.

Still thinking eBay is hard? Drop-off points around the country are always an alternative.

RUSSELL SCHERE: We are a full-service business. When somebody leaves an item with us, we take care of everything. You know, all they do is sit back and wait for a check in the mail. We sell convenience.

WILLIS: And for some, it's well worth eating into the profits.

UNIDENTIFIED MALE: You have to pack them, ship them, deal with the people who buy them. You've got to hope they pay you. This way, I bring it over here. They take care of all that.

(END VIDEOTAPE)

WILLIS: I'm with him. It takes a lot of work, but I guess there is a payoff, especially for the three-quarters of a million people who now make their living selling all sorts of things on the site.

In other news, a new study shows more than four out of 10 first- time homebuyers bought houses in 2005 with no money down. Problem is, they may be taking on too much risk.

For a closer look, I'm joined by Greg McBride of BankRate.com.

Greg, good to see you.

GREG MCBRIDE, BANKRATE.COM: Thank you, Gerri.

WILLIS: Listen, I -- everybody talks about the crazy mortgages out there, what's going on. But some of the problems are being created by buyers themselves, who are putting no money down at all. What -- how does that make them vulnerable?

MCBRIDE: Well, it's happening at an alarmingly high rate, Gerri. And what it does is, it puts them at risk because they are very dependent on price appreciation if they're going to build any equity. And that risk is compounded if you're throwing into the mix those risky mortgage products like interest-only loans or even piggyback loans, where the borrower can skate by making just interest-only payments.

WILLIS: Well, let's be real specific here, Greg. Let's say you put no money down, you've bought a house in the last year, you live in a market where prices fall. You could end up owing more than the house is worth, right? MCBRIDE: You could. Here's an example. Let's say a newlywed couple buys home for $200,000 with no money down. And two years later, that home has not appreciated in value. And for whatever reason, they need to sell that home.

After they pay their Realtor commission, and let's just say that, you know, they pay a sales commission of five percent, they're under water by five grand. They've been making monthly mortgage payments for two years, and they're still under water by five grand.

WILLIS: All right, Greg, what do you do? I mean, if you have money, can you put a bunch of money down on your mortgage? I mean, what kind of steps could you take to make sure you're not vulnerable?

MCBRIDE: Well, I mean, I think a couple things. First is, you know, what are your expectations? I mean, if this is a home you're going to live in for a long time, if you're going to be there seven years, 10 years, or longer, that greatly reduces your risk. You may not walk away with a pile of equity at the other end, but it really reduces the likelihood that you'll be underwater.

The other thing is, put the -- put something down if you can. I mean, even the median borrower put down two percent. I mean, two percent doesn't sound like much, but the point here is, you need that cushion. And whatever cushion you have is very valuable, because if you have to sell that home unexpectedly, that cushion may be the difference between absorbing all of your transaction costs or you having to bring money to the closing table.

WILLIS: Let's switch gears here for just a second. You know, those interest rates have been falling. They average now about 6.07 percent, according to the Mortgage Bankers Association. There's opportunity out there right now if you don't have that home, right?

MCBRIDE: We're looking at three-and-a-half-month lows on fixed mortgage rates. And that's in an environment where the Fed is still raising those short-term interest rates. So adjustable-rate mortgage borrowers, this is your opportunity. Pull the trigger now, and switch out of that adjustable into a fixed rate and lock it down now. I mean, there's a lot of concern about inflation. There's no guarantees that these fixed rates are going to stay as attractive as they are.

WILLIS: You bet, no guarantees.

Well, Greg McBride, thanks for joining us today.

MCBRIDE: Thank you, Gerri.

WILLIS: Coming up, the Super Bowl is just two weeks away. And if you really want to see the action, hear the crowd noise, heck, even smell the popcorn, sort of, you may want to think about a new TV.

But first, the mortgage numbers.

(COMMERCIAL BREAK)

WILLIS: Welcome back to OPEN HOUSE.

The Super Bowl is right around the corner. And if you're thinking of getting a new television set, or maybe your spouse is, you'll want to listen up. We've got some great ideas.

We're at the "Consumer Reports" TV testing lab. And I'm here with Gerard Catapano, who is in charge of testing these television sets. And he's got some great ideas.

George, good to see you.

GERARD CATAPANO, "CONSUMER REPORTS": Thanks, good to see you too.

WILLIS: All right, let's start with question number one that confuses me. What's the difference between LCD and plasma TVs?

CATAPANO: It's really a matter of preference. They're, they're -- they do different things.

WILLIS: OK.

CATAPANO: An LCD TV, for example, does not do very well with black levels. So what you like to see, what that means is, if you're watching a movie or a TV show that has a lot of dark in it, and, say, a person walks onto the set and he's wearing a dark suit, you may not see the lapels on his jacket, or it may look gray.

A plasma TV, on contrast, and on the other side, may look very well -- do very well with dark images.

WILLIS: Some of these don't do well with fast-moving images.

CATAPANO: Well, LCDs are the ones that don't do very well with fast-moving images. But the technology's getting better.

WILLIS: Now, I understand with plasma TVs, what happens sometime is that the image can burn in if you leave it up for too long and it doesn't move. Is that a big issue.

CATAPANO: Yes, that's a big issue. Burn-in's a big issues for plasma TVs if you play video games, or if maybe you leave an image on the screen for too long, it could be. Just have be mindful that not to leave an image that's static for a long time on the screen.

WILLIS: All right. I have to admit, we have both of these in my household, and did I buy either of them? No. OK, let's talk about some of the techno -- or some of the geeky technology words that we have to deal with when you talk about television sets. HD, SD, ED, what's the difference?

CATAPANO: Yes. In order of improved quality, HD is the best, high definition. That's going to give you the best image you can see. Like these sets behind us and around us are now HD images. That's the best.

ED is enhanced definition, lies between HD and SD.

WILLIS: Is it better?

CATAPANO: It's -- well, it's not as good as HD. It's a reduced resolution, it's a 480-line resolution. And standard def is the basic image that we've known for 50 years now.

WILLIS: Now, if I get an HD TV, does that necessarily mean that I'm seeing a digital picture?

CATAPANO: No. Having an HD TV alone will not guarantee you're seeing an HD picture. You need to get the HD signal into your home. The way to do that is, either if you're a cable subscriber, is to use your cable box. Call your cable company, have the cable company bring you an HD-capable cable box.

WILLIS: So Gerard, I walk into any electronics store, and this is what I'm faced with, lots and lots of choices and no way to really figure out what the right thing is to buy. How do make that decision, and what's best?

CATAPANO: Best advice I'd offer anybody who's going to shop for a TV is, bring a DVD, not just one, maybe two or three of your favorite movie. Pick a scene that's a dark scene, and ask them to play that movie for you on the TV.

I would also handle the remote. I would try controlling the TV. I would look at the menu. I would listen to the sound.

But the thing is -- let them allow you to adjust the TV. Make adjustments on the TV.

WILLIS: How soon are we going to see prices really fall substantially? Because I always wait with technology for things to get cheaper.

CATAPANO: Sure. It's hard to say. We've had reports from marketing agencies, saying next few years, prices will drop substantially. But like the DVD player, which took a few years for it to drop to the price it is now, which is almost rock bottom, in a couple years, you'll see prices that'll probably -- probably on par with this TV.

WILLIS: So it might make sense to wait.

CATAPANO: It definitely makes sense to wait. But some people can't wait.

WILLIS: A lot of people can't wait. If you do decide to buy an LCD or a plasma TV, make sure you protect your investment. Normally, we wouldn't recommend buying an extended warranty, but these new TVs are so new, there's no data on long-term reliability. That's according to "consumer Reports." So buy an extended warranty for two to three years. Just make sure your coverage doesn't overlap with the manufacturer's warranty.

I'll have a few more TV tips right after the break.

(COMMERCIAL BREAK)

WILLIS: One more thing about those oversized TVs, they could leave you with oversized debt. Even though January is typically a good time to pick up a plasma or LCD, hey, those big sales happen right now. The fact is that paying for these sets can be tricky. Read the fine print on any financing offer.

Now, some stores want you to take out a zero-interest credit card to finance the purchase. The trouble is that once the financing period ends, you still have the credit card in your wallet, and the interest rate will jump as high as 24 percent. Ouch.

Or you could wait. The folks at the TV lab told us that over the next few years, prices for these fancy sets will fall to levels of old-fashioned tube TVs.

And finally, everyone wants to live in a celebrity home, right? Well, times, they are changing. Entertainer Harry Belafonte has cut the price of his Manhattan home by $2 million. Now you can have this 17 room, seven bedroom, nine bedroom apartment -- yikes -- for a mere $13 million.

We want to hear from you. Send us your comments, your questions to openhouse@cnn.com. You'll find more on today's guests and topics on our Web site, cnnmoney.com/openhouse.

Thanks for watching OPEN HOUSE. We'll see you here next week. The day's top stories are next on CNN Saturday. Have a great weekend.

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