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Open House

Giving Your Home A Great First Impression; Detroit Home Prices Suffering With Auto Industry; Man Gives New Meaning To For Sale By Owner; Sprucing Up For Spring

Aired March 11, 2006 - 09:30   ET

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

GERRI WILLIS, CNN ANCHOR: Our own tale of two cities, Las Vegas, which is enjoying the best of times, and Detroit, which is struggling.
Good morning. I'm Gerri Willis. Today on OPEN HOUSE, we're going to tell you two very different stories. And no matter where you live, I'll show you the lessons we can all learn from those stories.

Also, if you're about to either buy or sell a home, stick around. A little later, we'll take a look at selling your home without a real estate agent, and when it makes sense for you.

In curb appeal, I've got the inside scoop on giving your home a great first impression.

But first, let's hit the road, off to Las Vegas.

(BEGIN VIDEOTAPE)

JASON WORKMAN, HOME BUYER: And this is the one-bedroom, one- bath, correct?

WILLIS (voice-over): Jason Workman is feeling the draw of Las Vegas.

WORKMAN: It's a good space, nice closet.

WILLIS: He's never owned a home before. But in a few months, when he completes his medical residency in Ann Arbor, Michigan, this young doctor plans to resettle in Vegas. Why? It's the economy.

WORKMAN: So I wanted, first and foremost, a place where jobs were going to be plentiful, but also I wanted an economy that was booming.

With the number of people moving here, I wanted to get in and go ahead and get property...

WILLIS: Workman's not alone. About 7,000 people move to one of America's fastest-growing cities every month, some 84,000 last year alone.

(on camera): The Las Vegas Strip has been at the epicenter of that growth. Over the past 15 years, some 40,000 new hotel rooms have been added right here. (voice-over): New hotels on the Strip translated into jobs not just for blackjack dealers and restaurant workers, but across the local economy, everything from teachers to police officers.

DENNIS SMITH, HOME BUILDERS RESEARCH: We have a factory, if you will, on the Strip that's going to -- that's under construction, the next one under construction is going to bring in 4,000 jobs immediately. One of the new hotel casinos here is like a GM plant opening in somewhere in the Midwest.

WILLIS: All those new arrivals need places to live. Everywhere you look, there's new construction stretching further and further into the desert.

SMITH: It's one of those old cliches, build it and they will come.

WILLIS: But with the city ringed by mountains and national parks, developers are running out of room.

The new strategy? Build up rather than out. This luxury high- rise sold out its condominiums even before completing construction.

LAURENCE HALLIER, PANORAMA TOWERS: I think you're going to see a boom in Vegas in that kind of construction. And I think it's going to continue. You know, I don't have much doubts of it. We certainly will continue as a company selling condos, and we have more buyers than product.

WILLIS: Vegas has witnessed an explosion in housing prices, up nearly 50 percent in 2004, before coming back to earth with an eight percent increase over the past year. That cooling in the market, along with the high cost of labor, has led some luxury condo developers to scrap plans for new construction.

And the median cost of a single-family home is now $309,000, out of reach for many working families or for those just getting started.

Enter the condo conversion market. This complex converts old apartments into new condos, starting at less than $150,000, with only one percent down.

MARK KARTEN, RIELLE VITA CONDOS: It is homeownership. It is the possibility to have equity, and it's the equivalent of what our parents had in the '50s and '60s, which was a starter home.

WILLIS: As for Jason Workman, he has some big decisions ahead of him. One thing for sure, in booming Las Vegas, he will have a lot of options.

(END VIDEOTAPE)

WILLIS: Those are just the kind of options they don't have in Detroit, the other housing market we're taking a closer look at today. Like Vegas, it's fundamentally about jobs. But that's about the only thing the two cities have in common. Take a look.

(BEGIN VIDEOTAPE)

WILLIS (voice-over): It's not very big, and it's not in great shape, but this home costs only $30,000. That's less than many of the cars built around the Motor City. The national rise in home prices has passed by Detroit, as its economy has suffered along with the auto industry.

LOU RONAYNE, KELLER WILLIAMS REALTY: It's very closely tied. The auto industry is still a major factor of employment in the Detroit area, and when they're not doing well, we're not doing well. And I think that's showing right now with a lot of the white-collar workforce being laid off and being discontinued. And it's affecting different communities around the Detroit area that historically sells to those buyers.

WILLIS: Detroit communities that have traditionally been home to auto workers are finding the housing market stuck in reverse. Median home prices fell more than 16 percent here last year.

BILL ROBERTSON, HOME SELLER: I'd have to say the economic times in Michigan due to General Motors and everything going on in the automobile industry, I think a lot of people are afraid. They may be out looking, but they certainly aren't buying.

WILLIS: Bill Robertson has been trying to sell this home in the suburb of Farmington Hills for six months. But no one has made a bid. Two price cuts and $20,000 worth of improvements have failed to attract attention.

ROBERTSON: If you had your choice between this and a brand-new home for the same price, the preference in many cases would be for the newer home.

WILLIS: But locals aren't counting the city out. Some signs of new life and new homes are appearing in downtown Detroit.

RONAYNE: I spent my whole life here, and I've seen more activity in the last five years than probably the previous 30 years.

WILLIS: To create that glimmer of hope, Detroit may be taking a cue from Las Vegas, building away downtown, hoping new stadiums, corporate offices, and, yes, casinos, will attract both jobs and residents to Motown.

(END VIDEOTAPE)

WILLIS: Here on OPEN HOUSE, we'll continue taking the pulse around the nation. Next week, we're off to Washington, D.C., for a compelling story of a boom town learning to adjust to today's more challenging market environment.

So exploring what's new in the capital with insights that might surprise you, that's next Saturday on OPEN HOUSE. And next on this show, more money in your pocket. I'll show you when it makes sense to avoid a real estate agent and the agent's commission.

And later, it's all about that first impression. If you're thinking about selling your house, it's time to get thinking about what insiders like to call curb appeal.

But first, your tip of the day.

(BEGIN VIDEO CLIP)

WILLIS: Keep your property taxes down by reviewing your property assessment. You may just find that your home is overassessed.

First, figure out if your assessment is accurate, fair, and on par with similar homes in your neighborhood. You can do that by simply talking to your neighbors, or visiting your town or city's assessment office.

If you think your home is overassessed, you can appeal it in court, and your chances of winning are good.

Act quickly. Be aware of deadlines, and find out how much time you have to file an appeal.

And for more information on how to fight an assessment, go to the National Taxpayer's Union at www.ntu.org.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

WILLIS: The math is easy. If you sell your house without using a real estate agent, you keep more money for yourself.

But wait a minute. It's not that simple. Bringing in the buyers is a big challenge. So I met up with one man who gives a whole new meaning to for sale by owner.

(BEGIN VIDEOTAPE)

LARRY KAGAN, SELLER: The next step was, they came in, and they were greeted by a mortgage broker.

WILLIS: 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.

KAGAN: Well, I was in Barnes and Noble, and I was hanging out, drinking coffee with my wife, and we're 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. KAGAN: 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 on 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 to 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 broker's 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.

GEORGE CAPPONY, WWW.5-DAY-SALE.COM: 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: That's a definite benefit. But in this softening market, are auctions or any kind of do-it-yourself deals right?

Colby Sambratto is here to sort it all out.

Colby, great to see you.

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

WILLIS: Well, let's start right there. The market's a little weaker. Maybe there are a few buyers out there.

SAMBRATTO: Right.

WILLIS: So should you go it alone without a professional?

(CROSSTALK)

SAMBRATTO: Our opinion is, you should, because the benefits far outweigh maybe the time you're going to have to invest in the process. So, in most markets, maybe you're seeing some cooling off in the hot markets, Southern California, Washington, D.C., southern Florida. But the nation's a patchwork of regional markets, and most of those markets, from our experience, are still fairly solid. So you can do it.

WILLIS: Well, if you are in one of those markets that's drifting a little bit lower, then should you think about getting a professional? Is that that kind of a decision?

SAMBRATTO: Well, we still think it's in your best interests to give it a shot. I mean, you really -- the cost savings are so enormous that you owe it to yourself to try to sell the house without paying that big commission.

WILLIS: Well, and let's talk about that. The median price of a home right now would indicate a commission of about $12,600. That's not chump change, obviously.

SAMBRATTO: Right.

WILLIS: But it's a lot of work to sell your own house. How much time does it take?

SAMBRATTO: Well, you're going to invest some time, most likely, unless you come from a real estate background, in educating yourself about the process. But the good news is that the information's on the Web. On most Web sites, you can -- many real estate Web sites, so you can educate yourself about the process. You can now use the Web for marketing, so there's a lot of tools available to you now that weren't available to you about five years ago, so...

WILLIS: Absolutely. And lots of tools out there. Cheaper MLS listings, you can just get the MLS listing, which is the multiple listing service.

SAMBRATTO: Sure.

WILLIS: Tell us about that, because your Web site does that.

SAMBRATTO: It's a hybrid service so that you retain the right to sell by owner if it sells through, let's say, our service, you pay zero percent commission. If it sells through your MLS listing, if you accept a buyer from the MLS, you're obligated for -- to pay a commission between 2.5 to 3 percent.

WILLIS: So you do pay something for it, but it gets your word out to more and more people.

Let's talk about marketing without the MLS.

SAMBRATTO: OK.

WILLIS: What do you do, the newspaper? Do you use those circulars, those FISBO (ph) circulars?

SAMBRATTO: We could. And a lot of our customers do use offline marketing in conjunction with online marketing. The big statistic nowadays is that over three-quarters of all buyers start their search for a new home on the Web. So it's a powerful tool.

WILLIS: Yes.

SAMBRATTO: Realtors use it. Owners can use it too.

WILLIS: OK. Obviously, the Web very important here.

SAMBRATTO: Right.

WILLIS: What is the biggest mistake that most homeowners make when they try to sell on their own?

SAMBRATTO: Pricing it incorrectly, right out of the gate.

WILLIS: Too high, right?

SAMBRATTO: Too high.

WILLIS: And how do you figure that out? Because it's not intuitive. Look, even brokers get it wrong sometimes.

SAMBRATTO: Sure, and they use comparables. And that's what we advise our sellers to use. Again, the good news that a lot of these tools are available to you. You can go on the Web. There's new companies like Zillow out there now that you can go on, and you can see what your home is worth, according to publicly accessible databases.

After that, you have to do a little bit of work to figure out, you know, what is fair market value for your home. And that's a little different than just looking in a database. And there's some things you can do to do that.

WILLIS: Who is selling on your own right for? What kind of person should be doing this? Because, I mean, let's face it, a lot of people just don't have the time for it.

SAMBRATTO: Right. You know, traditionally, it was people who've gone through the process maybe once or twice before, they were comfortable with it. And they knew why it made sense, and they knew that they could handle it.

Nowadays, we're seeing people who are first-time home sellers who've spent the time to educate themselves to do it. They're comfortable but working their way through the process.

People who can't probably do it are people who don't have the time. You're going to have to show that property. So if you're too busy to be at your house to show your home to potential buyers, it's maybe not the best choice ...

(CROSSTALK)

WILLIS: And you do have other professionals along the way. There's an attorney there. They're going to help you get the deal done.

SAMBRATTO: Right.

WILLIS: There are lots of people who have a vested interest in getting this deal done.

SAMBRATTO: We always tell people, Don't, you know, don't get too uptight. It's not rocket science. In this country there's three steps to selling real estate, there's pricing it, marketing it, and then ultimately the transfer of title. The transfer of title, you're always going to have a real estate attorney or a ...

(CROSSTALK)

WILLIS: Somebody.

SAMBRATTO: ... helping you out. So it's not like you're going to be doing it by yourself. You'll have help along the way.

WILLIS: All right. Colby Sambratto, thanks for joining us today.

SAMBRATTO: Thanks for having me.

WILLIS: Appreciate it.

Whether or not you sell on your own, your house has to catch the buyer's eye. So next on OPEN HOUSE, I'll show you the secrets of curb appeal.

But first, here are the mortgage numbers.

(COMMERCIAL BREAK)

WILLIS: We all know the saying, you never get a second chance to make a first impression. And the same is true for your house. That's where curb appeal comes in.

In many parts of the country, it's already warm enough to go outside and spruce up your place. And even if it's still a bit chilly where you are, spring is right around the corner.

So I got a lesson in curb appeal from Nairn Friemann, a home stager and floral designer.

(BEGIN VIDEOTAPE)

WILLIS: People want to know how to fix up the outside of their house. What would you do?

NAIRN FRIEMANN, HOME STAGER AND FLORAL DESIGNER: Well, first of all, clean, polish. Add color.

WILLIS: How do you add color?

FRIEMANN: Flowers, it's the cheapest and the fastest way to give your house a pop of color.

WILLIS: And you're going to clean, for example, this house by doing what?

FRIEMANN: Well, windows, always. But in this case, we're going to take a really close look at the siding...

WILLIS: All right.

FRIEMANN: The siding, the trim.

WILLIS: Sounds like a lot of work. Let's get started.

(voice-over): Create a border with flowers to add color along with a crisp, clean feel.

(on camera) So you chose impatiens today. Why?

FRIEMANN: Well, they're very inexpensive, and they add instant color, and they do very well in shade or sun.

WILLIS: Now, how far apart should I plant these?

FRIEMANN: About five to six inches. They're going to spread very quickly. And you don't have to plant them very deeply ...

WILLIS: How deep?

FRIEMANN: Oh, a couple of inches, not very deep at all.

WILLIS: Oh, OK, all right. Well, that's pretty fast too, in addition to being cheap and colorful. (voice-over): New flowers can take care of color. But it's up to you to keep the exterior of your house spic and span. If your siding is really dirty, consider having it pressure washed. For a quick do-it-yourself fix, grab some cleaning solution and your hose.

FRIEMANN: First of all, we'll going to rinse off the wall. Then we're going to put the solution on, let it set for about two to three minutes, and then we're going to rinse again, and wipe off.

WILLIS: Well, that looks great. I can really tell a difference.

That's really going to brighten up the house.

(voice-over): Don't forget sports equipment. A little mildew cleaner can go a long way. Summer humidity can make mold grow like mad. So attack the problem before your white hoop goes green.

(on camera): So Nairn, this is a mildew remover.

FRIEMANN: Yes.

WILLIS: How long do I leave this on for?

FRIEMANN: Two to three minutes. And that's going to take some elbow grease. You're going to have to scrub that afterwards.

WILLIS: But I hope the payoff is pretty dramatic.

FRIEMANN: Absolutely. Have your friends over to play some hoops.

WILLIS (voice-over): So you've added color and cleaned like crazy. But before you invite your friends over for your backyard bash, make the best use of your space.

(on camera): Look at this waste of space. I bet we could put this to use.

FRIEMANN: Absolutely. It should be decorated as an outdoor room.

WILLIS: Well, let's get started.

FRIEMANN: Let's go.

WILLIS: So, this is great.

FRIEMANN: Isn't it?

WILLIS: Remind us again what we learned today. If you're going to fix up your house, what are the three steps?

FRIEMANN: Clean, add color. And if you've got time, you know, go and maximize the space in the outdoors.

WILLIS: And the most important thing, sit back and enjoy it, right?

FRIEMANN: Absolutely.

(END VIDEOTAPE)

WILLIS: Remember, some potential buyers will probably drive by your house at night too. So think about installing an attractive outdoor light fixture for the front.

I'll be back with my final tip after this.

(COMMERCIAL BREAK)

WILLIS: OK, now that you know how to make your house attractive on the outside, let's talk about the inside.

Upgrade your light fixtures with higher-wattage bulbs. Now, that can make the rooms look bigger and more appealing.

Give your rooms a fresh coat of neutral paint. Using lighter colors, of course, is more inviting to people.

And one other tip, depersonalize your space. I know you like the family photos, but if they're hanging all over the place, they've got to go.

Move out the clutter too, even if you have to rent out a storage space. You want buyers to start imagining all their stuff filling the nooks and crannies of your home.

And finally, here's a home renovation that really paid off. A Boynton Beach, Florida, woman asked her husband to hide a diamond ring in their home 23 years ago. But he did such a good job, they never found it again. They even moved out of the house.

Well, now, the current owner started renovating the bathroom. And there was the ring, tucked behind a light fixture. So they did the honest thing. They tracked down the previous owners and returned the ring. The couple was so grateful, as a reward, they're fixing the new owner's hurricane-damaged screen.

We want to hear from you. Send us your comments, questions, to openhouse@cnn.com. And for anything mentioned in today's show, check out our free transcript, now available on our new Web site, cnn.com/openhouse.

Thanks for watching OPEN HOUSE. We'll see you here next week.

Today's top stories are next on CNN SATURDAY.

Have a great weekend.

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