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Open House

Some Real Estate Agents Get A Double Commission; Is It Fair?; Gadgets To Track Your Home, Kids and Pets; Lidia Bastianich and Gardening with Kids

Aired June 24, 2006 - 09:30   ET

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

MELISSA LONG, CNN ANCHOR, CNN SATURDAY MORNING: Tennis great Andre Agassi reportedly says he's had enough at the age of 36. Agassi will play at Wimbledon next week and at the U.S. Open in August. After that, he says he is done. Back problems have slowed him down in recent years.
And Anna Nicole Smith's nemesis is dead. E. Pierce Marshall, who waged a long legal battle to keep Smith from inheriting his late father's fortune, died unexpectedly this week from an aggressive infection.

Marshall's father married the former Playmate when he was 89 and she was 26. Smith may yet collect millions from her late husband's estate because of the Supreme Court ruling in her favor, earlier this year.

And those are the headlines. Good morning. I'm Melissa Long. Hi tech toys to help you keep an eye on your home, family and even your pet. That's next on OPEN HOUSE with Gerri Willis.

GERRI WILLIS, CNN ANCHOR, OPEN HOUSE: Is your real estate agent ripping you off? Have the debate over price fixing and high tech gadgets to keep you safe. Plus our very first weekend project with kids.

Good morning everyone, I'm Gerri Willis and this is OPEN HOUSE.

WILLIS: Finding the right real estate agent for you is very important. And a new report suggests some real estate agents may be crossing the legal line to keep those sky-high commissions.

(BEGIN VIDEOTAPE)

WILLIS (voice over): One of the biggest costs of selling your home, it's the commission you pay the real estate agent. It's often around 6 percent of the selling price and on a $400,000 home, that's over $20,000. A new report from the Consumer Federation of America says traditional real estate agents have formed what they call a cartel; one that is keeping commission fees high.

STEPHEN BROBECK, CONSUMER FEDERATION OF AMERICA: It is simply the last standing unregulated cartel in a free enterprise economy. It's sort of crazy. We're not angry. We describe the system as cockamie.

WILLIS: Brobeck says one of the biggest problems is brokers who represent both the buyer and seller in a transaction.

BROBECK: When there's a single broker in a sale, very rarely does that broker represent their financial interests.

WILLIS: Brobeck says in this case the broker is double dipping getting both the buyer's and seller's part of the commission. He says the broker can't or won't effectively negotiate the home price. And to get the chance of double dipping he says brokers often show potential buyer only their own home listings.

And Brobeck says commission fees are just too high. He says a $20,000 commission is often too much to pay for a broker's services.

Real Estate Agent Paul Purcell says he agrees brokers should not represent both the buyer and seller in a house sale. But he defends the high commission saying they have become necessary for brokers to provide their services.

PAUL PURCELL, REAL ESTATE AGENT: Real estate firms have created sort of a monster, if you will, in that they need to charge 6 percent commission to support the organization and the firm.

WILLIS: In a statement the National Association of Realtors says, competition is fierce in the real estate business. And that commissions have actually fallen to about 5.1 percent. Although Brobeck says that number is not accurate. Purcell says despite the high fees getting a good real estate agent is worth the cost.

PURCELL: Good ones are worth their weight in gold, they truly are. They can protect the investment for you. Pricing is really important. Negotiations is really important and it is worth it.

(END VIDEOTAPE)

WILLIS: Nick Retsinas is the director of Harvard's Joint Center for Housing Studies and leading authority in the real estate industry.

Nick, is this behavior price fixing?

NICK RETSINAS, JOINT CNTR. FOR HOUSING STUDIES: Well, I don't want to comment on the legal aspects. Clearly, realtors are important part of many home purchases. The real estate commission is a very significant number, often 6 percent.

At the same time there are literally hundreds of thousands of realtors, the average realty commission is going down. It is surprising that it stayed so high for so long particularly in light of changes like shopping via the Internet which is now very, very common.

WILLIS: Well, it's good news for consumers that the commissions are going down.

Let's switch gears here a little bit. Talk about the market. We got some interesting numbers on the housing market just this week. Jobless rates at a four-year low here, which is good news generally, not just for consumers but also for the housing market. Housing starts. Making a strong showing. What does that mean for the market?

RETSINAS: Well, I think the market has changed. I think the market has slowly morphed from a seller's market into a buyer's market. I think the days of double digit price appreciation are behind us. But the numbers you point out I think illustrate that we're not on the -- we're not on the edge of a substantial price decline or price correction.

I think appreciation will slow. It will be a soft landing. There will be pockets where there are problems. But absolutely right the four-letter word is "jobs". As long as the economy is producing jobs that's good news for the housing market.

WILLIS: So, Nick the report that your organization put out just this week calls for the "soft landing", as you just said. But what does that mean as a practical matter for people that are in homes right now?

RETSINAS: Well, what it means is if they, in the past, when they went to sleep, they woke up the next morning pretty substantially richer than when they went to bed. Tomorrow that may not be the case. In fact, they are going to have to think of the homes as places to live in not necessarily as primary investment vehicles.

WILLIS: You know, the Federal Reserve has been warning about inflation here for quite some time. Seems to be a major concern, rates are moving higher. What is this going to mean for homeowners?

RETSINAS: Well, as rates get higher, that means that reduces the purchasing power of potential home buyers. That's going to be one of the factors why prices aren't going to continue to appreciate.

For home buyers, people that want to own homes, what it means even though prices are going to slow, the rate of appreciation, the rising interest rate will probably offset the slowing price appreciation.

WILLIS: Let's talk about affordability. I know that's a keen interest of yours. Over the past few years, boy, affordability, what a tough issue if you wanted to buy the first house. It was really difficult. This is one thing that could get better, right?

RETSINAS: Well, yes and no. It will get better in the sense again we don't see how prices can continue to rise at the pace they have been rising. At the same time, while we are producing jobs, this economy produces a lot of low-wage jobs. So for people who are looking to buy a home this respite in home price appreciation may be counter balanced by rising interest rates.

WILLIS: You know, another worry out there particularly with economists there's a lot of adjustable rate mortgages out there. Those rates are resetting. In fact, I believe this year some $300 billion in mortgage debt. People are going to have higher interest rates on them. Are you worried about that? About people being able to take that extra cost and could it affect the broader economy? RETSINAS: It is an issue. No question over the last couple years there have been a growth in the new kind of mortgage products. Indeed some of these new mortgage products have offset the affordability problem. Many of them are recalibrating, but many people -- not as many people have outstanding mortgages. Eight out of 10, for example, of homeowners in the United States either have a fixed rate mortgage or no mortgage at all.

But for those who do, if they are not able to get out of this mortgage and say refinance, they could -- experience some hardship, particularly if it's not matched by any salary increase.

WILLIS: Of course we're already seeing foreclosures go up. That's been a real problem right here. Correct?

RETSINAS: Correct. In the past, the reason that wasn't a problem because if you couldn't make the mortgage payment, you just sell your house. And it would be plenty of buyers, plenty of offers. That's going to be harder to do. So I suspect you'll see more delinquency, defaults and eventually more foreclosures.

WILLIS: Nick Retsinas, thank you so much today.

RETSINAS: My pleasure.

WILLIS: Straight ahead on OPEN HOUSE we have all the high tech toys to keep an eye on your home, your family and even your dog.

And we're going to go gardening with Lydia, that's Lidia from "Lidia's Family Table", vegetable gardening to be exact. Weekend project with kids is coming right up. But first, your "Tip of the Day".

(BEGIN VIDEOTAPE)

WILLIS: Finding the right real estate agent is key when you're putting all your assets on the line. Experts suggest interviewing at least three agents before you sign on for the ride. Ask about expertise, references and the projected game plan.

Look for an agent who works full time and has been practicing for at least two years. Remember, personality counts for something, you're going to be working closely with this person.

A good place to start is the National Association of Realtors website. There you will find a list of certified agents in your area. Another great resource is the National Association of Exclusive Byers Agents at naeba.org.

Finally if you like to check up on the broker's track record head to homethinking.com. That's your "Tip of the Day."

(COMMERCIAL BREAK)

WILLIS: Did you ever wonder what the kids are up to when you're not at home? Or where the dog ran off to? Some new high tech toys can help you keep an eye on your home, your kids and even your pets. John Biggs is with gizmoto.com.

So, technology is going to save my life?

JOHN BIGGS, GIZMOTO.COM: Sure, definitely.

WILLIS: OK, well, let's go over some of the stuff because you brought in a lot of stuff for us. I appreciate that. Including a ton of phones. Why would I care about this phone?

BIGGS: This is a parent and child phone. This is a called Sprint Family Locator. What you have there is actually a map of where your child is at any time.

WILLIS: It's like GPS in the car?

BIGGS: Sure, like PGS in the car, but you know where your child is. If they are at the labor get out of a certain range it will notify you and send you a message.

WILLIS: Send you a message by e-mail?\

BIGGS: It will send you a message by e-mail, it will send you a message by SMS to the phone, like a short message to the phone.

WILLIS: I'm thinking maybe not for the kids, maybe my husband needs one of these things. We have another phone here; tell me about this. This is adorable.

BIGGS: That's the child's phone. What happens is the child carries that around. That's actually a fun phone. You can download video, you can download music, but it also has a GPS built in.

As soon as the child leaves a certain range it will send -- you can contact that phone and the child will know when you're looking at them. They can sort of big brother. But all of a sudden they'll get a message, it will start beeping, and it will send their location back to your phone.

WILLIS: Poor children have no privacy rights anymore. OK, so we've got third phone and this is actually my favorite because this is for kids. There's the mommy button and there's the daddy button.

BIGGS: Mommy button, daddy button, there is also a grandma button on there and there's a nice -- at night it actually lights up.

WILLIS: Does this open up?

BIGGS: No, it is just going to -- you're just going to press one of the buttons.

WILLIS: All you would do is like press the mommy button, and you'd be talking to your mom.

BIGGS: Yes. And if you press the button on the side, it will have a little light show for you, I believe. WILLIS: Oh! Oh! Oh! It's starting now. OK. That's great. And it's really does make a lot of sense. You see these buttons, you can tell exactly what you're dialing. I think it would be easy for kids to figure it out. But is this expensive?

BIGGS: Not really. That's just $99 plus a service contract that you have to be under with Firefly. As soon as you purchase that Firefly phone you get 30 minutes free.

WILLIS: I guess that's good. It's some cash, but if you really want to have your child have a phone it might a good option.

Now we have a camera here. I'm used to those web cams and if they are not that great, I have to tell you.

BIGGS: This is similar to a web cam except it uses the home power lines to carry the signal. What you do with that, is you'll attach that to your window or you'll put that on your desk. And then anytime anyone moves within the frame --

WILLIS: What do you mean attach it to a window? Is that a suction cup?

BIGGS: Well, there's a suction cup.

WILLIS: That's really funny. It doesn't really look like a camera, either. You might not pick up on it if you break into somebody's house.

BIGGS: I mean you'll see security systems that are actually very expensive. But this is inexpensive. It's about $250. You plug it in and runs through your power lines. What happens is if someone goes into the frame it's sort of a motion detector and it will send you an e-mail or send a thing to your phone telling you somebody is near the house.

WILLIS: I don't have to be watching the camera all the time, in other words, because that would be impossible to do.

BIGGS: My favorite thing here -- or one of my favorite things here -- is this teddy bear. I love this. Look at this. But it's not just a teddy bear.

BIGGS: What you're seeing there is a teddy cam. We have a five- month-old. This would be perfect to us. We could plug it in and watch the baby as he's sleeping or doing different things. In one of his eyes is a secret camera. So if you have any -- if you're concerned about your baby's well-being you can always keep an eye on them. Actually connects to the VCR, it can connect to a computer, and you can record the video.

WILLIS: The poor child doesn't even know they are being watched. OK. Well we've got one other really cool thing, but we need some help. So here comes the help. Cool. Who is this?

BIGGS: This is Phoebe. WILLIS: Hi, how are you? Come back here.

BIGGS: Poor Phoebe.

WILLIS: Get up here. You have to model.

BIGGS: This is actually designed for a bigger dog.

WILLIS: What is this thing, it's huge?

BIGGS: This is a GPS locator. Say for example Phoebe has a fenced area she runs around in. This is perfect if you're out in the country or in the suburbs somewhere. And if she leaves that fence, for any reason, you'll get information from this device to your computer, to your cell phone.

WILLIS: Does it bug them? I mean it seems pretty large.

BIGGS: She has been wearing this for about an hour now. So, she's kind of creeped out. But I think if you had a bigger dog.

WILLIS: Bigger animal wouldn't matter as much.

BIGGS: It's especially -- it's designed for runners. I mean the guys who are really going to get away from you.

WILLIS: Oh, now that's a great idea, if you go running with your dog wouldn't have to keep it on a leash right.

BIGGS: If it ran away you would always know where it is.

WILLIS: Thank you so much for your help today. We really appreciate it.

BIGGS: Well, thanks so much.

WILLIS: Coming up on OPEN HOUSE, everything you need to know about dealing with bees this summer.

But next, it's our very first weekend project with kids. We'll take you to the home of Lidia Bastianich, next when we come right back.

(COMMERCIAL BREAK)

WILLIS: It's time to dig in and get dirty in our very first weekend project with kids. We spent the day with a culinary expert, and her grandchildren, and got some great advice on how you can nurture those little green thumbs by planting a veggie garden with kids.

(BEGIN VIDEOTAPE)

LIDIA BASTIANICH, CHEF & RESTAURANTEUR: These are the pepper plants. WILLIS: For Lidia Bastianich it's a family affair. On this day there are four generations planting, picking and sharing a passion for gardening. Even the youngest lend a hand and get their hands dirty, which makes the garden not only a great play ground but also a perfect learning ground.

BASTIANICH: What's this? This here?

WILLIS (on camera): So, Lidia, when you're with the kids in the garden, what kind of skills do they learn as they are out here?

BASTIANICH: Oh, many skills. Coordination, certainly. Planning, you know, sort of aligning what will go where, organization.

WILLIS (voice over): Kids also learn to work as a team.

UNIDENTIFIED FEMALE: Like this, you hold your hand on the bottom. Then you pull --

BASTIANICH: Oh, all right.

The garden is a perfect place for children because they plant something, and they nurture it, and they see results. It responds to them. That plant responds to them.

WILLIS: Some plants grow faster than others. Choose herbs like basil, mint, sage, or parsley. Kids get to harvest and enjoy them sooner.

BASTIANICH: Tomato is another plant that is very sort of rewarding to children, because if you take care of it, it grows spreads, it makes flowers. They can see the whole sequence. Then little tomatoes they can actually see. They see the cycle of life and how things grow. And the time it takes and they appreciate and respect food.

WILIS: Kids respecting veggies?

BASTIANICH: What I do, when they were even two months old I took and herb and I cracked it under his nose, so they are beginning to develop this collection, almost like a reference library aromas and flavors and all of that. So when you put it in front of them, you know, cooked, it's not a stranger. It's not a stranger that's coming up.

If they smell it from the beginning, if they plant them, if they pick them chances are that they will eat them.

WILLIS: But gardening isn't all play, it's also work. Plants need be to checked and watered regularly. But Lidia has a secret recipe for fun.

BASTIANICH: Need to connect it to the ultimate product. You know, if you grow some basil and say we'll make a pizza. Now, they can relate to that. We'll make a pizza, we'll put some basil on top. Then ultimately, they say, look grandma this is the basil -- or mom or dad -- this is the basil I grew. It's my basil. And they're so proprietary of what they have grown, which is wonderful.

WILLIS: But not all plants are created equal and some can even be harmful.

BASTIANICH: Tomatoes, you think they're great, the leaves, if you really ingest a lot of them are poisonous. Bay leaf, it's another one of those. Rhododendron is a flower, also has a poisonous leaf. As a parent you need to be educated, of course. But you know, you can't put -- hide things from the children. You need to teach the children to co-exist, to live and to respect these things and understand them.

WILLIS: Understanding is key, and these two little ones are already quite the experts.

UNIDENTIFIED FEMALE: Tomatoes.

UNIDENTIFIED MALE: This is basil.

WILLIS: I even got a private lesson on planting.

UNIDENTIFIED MALE: First you take a stick. Put it in the ground. And then you wave it around like this. Take the plant out, and you put it in the hole.

BASTIANICH: Yes, that's it. Pick up the plant. Straighten it up. There you go.

WILLIS: For Lidia, time spent in the garden with her family is precious.

BASTIANICH: There's nothing better than that. It's such a complete cycle. Doing everything with the children, you're working with them. Ultimately they are learning and ultimately you are enjoying it at the table.

This is a nice salad plant.

WILLIS: Speaking of tables, I couldn't leave without trying the fruit.

BASTIANICH: The cycle finishes right here.

WILLIS (on camera): That's right.

(voice over): Well, in this case the veggies of their labor.

(On camera): This is gorgeous, yes.

(Voice over): Everybody to the table and eat.

BASTIANICH: (Speaking Italian)

You got it.

UNIDENTIFIED MALE: (Speaking Italian)

WILLIS: Good for you.

(END VIDEOTAPE)

WILLIS: Lorenzo said it so much better than I did. As always if you have an idea for a weekend project send us an e-mail at openhouse@cnn.com. You can watch past weekend projects at our website.

Coming up be ready to deal with bees. It's that time of year. Important tips you won't want to miss next on OPEN HOUSE.

(COMMERCIAL BREAK)

WILLIS: Now while summer brings out the flowers, it also brings out the bees. Protect yourself and your kids from bee stings by wearing white or neutral colored clothing. Bees are attracted to bright colors.

You'll also want to avoid wearing strong scents like perfume. And if you can, avoid banana scent and don't eat bananas outdoors, it signals danger to bees and they will become agitated and may sting you.

When you're outdoors watch the soda cans. Bee have a tendency to climb in them and sting the mouths of the unsuspecting. If you have kids, give them straws.

Now, if your child is stung remove a stinger as quickly as possible by scraping it with the fingernail. Don't squeeze the stinger because more venom will be injected into the skin. Make sure you leave the area immediately.

When a bee stings it gives of a chemical signal that signals danger to other bees. That means you may soon have a swarm after you.

You can apply ice to reduce the swelling. Bee sting allergies can be fatal, so get medical attention fast if you see signs of wheezing, dizziness, or swelling in the face and neck.

The best way to be safe is left bees be, especially on overcast days; because that is when they're really cranky.

If you have any questions at all or tips you want to share with your fellow OPEN HOUSE viewers send us an e-mail to Openhouse.com. You will find more on today's guests and topics on our website.

As always we thank you for spending part of your Saturday with us. OPEN HOUSE will be back next week with everything you need to know about outdoor entertaining on the Fourth of July weekend. We'll also tell you how to bug-proof your home.

And don't forget you can also catch OPEN HOUSE every Saturday and Sunday at 5:30 p.m. Eastern on Headline News.

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