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CNN Live Saturday

Dollar Signs: Selling Your House

Aired April 24, 2004 - 16:29   ET

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

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


KELLI ARENA, CNN ANCHOR: Hello, I'm Kelli Arena, and here is what's happening at this hour.
Across Iraq at least 26 people were killed today, among them, 12 Iraqis killed in an explosion at a crowded market in a largely Shiite neighborhood in Baghdad. North of the capital, five American soldiers were killed and six were wounded in a rocket attack on a coalition base.

Palestinian leader Yasser Arafat is speaking out today, dismissing Israel's latest threats against him. His comments follow a statement by Israeli Prime Minister Ariel Sharon. In it, Sharon said his government no longer feels bound by a promise not to target Arafat in its crackdown on terrorism.

In Washington, several hundred people took to the streets today to protest globalization and the policies of the World Bank and the International Monetary Fund, but the crowd was much smaller than expected. Police set up barricades, shutting down several downtown streets.

San Diego Chargers chose Eli Manning to kick off today's NFL draft. The 23-year-old former University of Mississippi quarterback had vowed to sit out a season rather than play for the Chargers, but the situation was quickly resolved when the Chargers traded him to the New York Giants.

Welcome to DOLLAR $IGNS where we help you make the most of your money. Today we're going to help you do something more, sell your home. Such a move can be fraught with pitfalls and anxiety, but our Fredricka Whitfield helps you take the worry out of making the big sale.

(BEGIN VIDEOTAPE)

FREDRICKA WHITFIELD, CNN CORRESPONDENT (voice-over): So you're ready to pack it up and move out. Perhaps the upkeep has gotten too tough. If you're like Ina and Elijah Moore, your four bedroom of the last 33 years is just too much.

ELIJAH MOORE, HOME SELLER: Moving to a comprehensive retirement center and looking forward to it.

WHITFIELD: Especially since selling their Atlanta house and one- acre yard was a breeze.

INA MOORE, HOME SELLER: We had all kinds of nightmares but we haven't had to experience them.

WHITFIELD: Theirs sold before the "for sale" sign was in place.

I. MOORE: We had an excellent real estate agent.

WHITFIELD: Maybe.

PEGGY HIBBERT, REAL ESTATE AGENT: So you just sign "Ina" right there.

WHITFIELD: But their agent Peggy Hibbert credits them too. They had their home inspected and repaired before putting it on the market, and tidied up.

(on camera): Going into selling a home there's always so much trepidation. How did you guys approach it?

E. MOORE: Well, just prepping the yard, also cleaning the house.

I. MOORE: Removing some of our clutter.

E. MOORE: Yes, putting away a few things.

WHITFIELD (voice-over): Hibbert says sellers out there, listen up.

HIBBERT: It's where adage of curb appeal really comes into play.

WHITFIELD: When buyers take this walk, this is what happens.

HIBBERT: By the time they pass over the threshold, they have pretty much decided whether or not they think this house is going to work for them.

One of the most important things you can do is if you know someone's coming to the house, don't be there, but before you go be sure to turn every light in the house on. When they walk in, they want to feel like it's an easy house to live in, well lit, and has that nice warm homey feel to it. Then a potential buyer feels like, oh, I could just move in and live here and life would be like this.

Charm is things like, I know that some realtors tell people to get rid of all the family pictures, you know, anything that's personal. But to a certain degree, I think that adds that sense of warm, caring people live here and enjoy this house.

All you have to worry about getting packed.

(LAUGHTER)

E. MOORE: That's still a big job.

WHITFIELD: The Moores showed in many ways their home was integral to their loving family and that just might be what helped sell it so fast.

Fredricka Whitfield, CNN, Atlanta.

(END VIDEOTAPE)

ARENA: Well, whether you're selling a large house like the Moores, or a nice little condo, our guests today can help you. John Adams is a real estate adviser in Atlanta, and the host of his own show on WGFT radio.

JOHN ADAMS, REAL ESTATE ADVISER: That's right.

ARENA: And John Birger is with "Money" magazine in New York, the magazine's June issue is devoted to real estate.

Gentlemen, thank you both for joining us.

JOHN BIRGER, "MONEY": Thank you.

ARENA: So tell me, what is the first consideration a person needs to make before they decide to sell their home? John Adams, why don't we start with you. I can't say John this time because you'll both -- so John Adams, what do you think, is it selling the home that you have?

ADAMS: I don't think so. I think if you get your house on the market and it's priced properly, it's priced reasonably for the marketplace and it's in good condition, it's being marketed, you can expect it to sell. I think you need to make sure you've got someplace to go, so you'll want to go ahead and be looking for a replacement property at the same time that your house is going on the market. But I think getting yours ready is the first step.

BIRGER: Yes, I would agree with that. I think in general, it's easier to sell a home in this market than it is to buy one just because the supply of new homes is so thin right now. So you might -- if you can swing a situation in which you may have two mortgages for a short period of time, I think that's something you might want to think about because if you immediately sell your home thinking that you'll soon be able to buy a new home, given how hot today's market is, that might not be doable.

ARENA: Well, we already have phone calls. This is a very hot topic. Donna in Maryland calls asking when you should start thinking about putting that house up for sale. Donna, go ahead.

CALLER: Hi. Well, that's it exactly. We're having a house built, and it will be ready, they say, November. Is it -- and of course, this is the prime time in our area. We're suburban D.C., is it too early?

ADAMS: Well, let me jump in. I think if you were to sell the house at this point, obviously you'd be without a house for six months, and that's going to be a problem. You can begin marketing your home now and make your sale contingent upon your ability to remain in the house until November.

ARENA: So rent it back, basically, right? ADAMS: Exactly. And I think I'd like to see you go ahead and market the property simply because there's a possibility of rising interest rates. You may find that buyers are prepared to go ahead, purchase your house now and lock in a low interest rate, be prepared to rent back to you for several months and that gives you time to get ready for your house being built.

BIRGER: Keep in mind, though, that springtime is traditionally the kickoff of the home buying season, in part because school is ending. People start thinking about moving because the school year has ended. So in general, I mean, if you can wait until springtime, you might get more bids than you would in November.

ADAMS: I would jump in and say, we're in Atlanta and it's springtime.

BIRGER: Well, I'm thinking more about the school calendar.

ARENA: So sort of toward the end of the school year is what you're saying.

BIRGER: Yes.

ARENA: OK, all right. Well, I have another question for you. What about realtors' commissions? Are those set in stone? How much wiggle room does a seller have.

BIRGER: John and I might disagree on this. But I think there's a lot of wiggle room. And I'm not talking about going to a discount real estate broker, but I think with full service realtors, you should be perfectly -- you should be able to play brokers off each other and negotiate a lower rate. There's -- if a broker tells you that 6 percent is the standard, you should not accept that. You should try to negotiate, have them negotiate against each other and you should be able to get that down.

ADAMS: I'm going to take just a little bit of a twist on that. My sense is there's no reason to pay a commission at all unless you choose to do so. My approach at this point would be, especially if you've got six months, why not test the waters yourself? Why not set a time period, 30 days, 45 days, and say, we're going to market this home ourselves?

My advice would be to put a sign out front that says "for sale by owner, appointment only." And then I would put a sign underneath that that says "brokers welcome" and offer to pay a finder's fee.

And John, I agree with you. All commissions are completely negotiable during this time period, you can offer to pay a flat fee or a percentage or whatever you think is fair. And if a broker brings an offer to you that's acceptable, you're willing to negotiate with that, build their fee into that price, that's fine.

But with six months to spare, you've got plenty of time to test the waters right now, see if you need to be paying a full service commission fee. If you had a shorter period of time, I'd recommend turning it over to a professional.

ARENA: All right, gentlemen, we are going to take a little break here. But your calls and e-mails next on DOLLAR $IGNS, and of course you can still send your question to dollarsigns@cnn.com, or call us, the number again, 1-800-807-2620. These guys are loaded with advice. We'll be right back.

(COMMERCIAL BREAK)

ARENA: This hour's top stories, five more American soldiers killed in Iraq today. An Ohio priest is arrested in the 1980 killing of an elderly nun. And four workers are now confirmed dead in the explosion of an Illinois plastics plant.

Welcome back to DOLLAR $IGNS. We're talking about the best ways to sell your home. John Adams is a real estate adviser and John Birger is with "Money" magazine.

Gentlemen, lots of calls, first from Patricia in Georgia, wants to pick up on where we left off, talking about selling without an agent, Patricia?

CALLER: Yes, hi, John.

ADAMS: Hi.

CALLER: I bought my home two years ago. But I'm a young senior and I'm not able to take care of the property. Therefore, I decided to resell again and find myself a smaller place. I'm charged 3 percent for my listing agent and 3 percent for the selling agent. Then I decided that I would go on my own, but I have no experience in real estate. So tell me what do I do?

ADAMS: Well, go ahead, John.

BIRGER: Well, I think there's a middle ground. And John and I may disagree on this, but the United States is the only Western country where commission rates are in the 6 percent range. In most other Westernized countries they're closer to 2 percent, which tells me that there's a lot of room to negotiate downward full service commission.

So I would not be afraid to interview five or six full service realtors, tell them that price is an issue for you, and see if they'll lower their commissions from 6 percent, maybe to 5, maybe to 4.5. There's no reason why commissions have to be 6 percent.

ADAMS: Well, and let me just respond to that. I can only speak to the Atlanta marketplace I'm familiar with. But I can tell you this, if you call a full service broker and say, I'd like to you list my house for sale and I can give you 4 percent, there's a problem with that. First their broker will not accept the listing. They have an in-house rule that they only accept 6 or even in this marketplace sometimes 7 percent. And that's legal for the broker to make that decision. You're also free not to list with them, but if you want their level of professional assistance you may have to pay that price. The other problem is that the selling agent that's bringing the buyer into the door is going to expect a reasonable fee. And if you've listed the house, say, at 2 percent and that agent comes in and finds out they're going to get 1, they won't show the house in the first place.

BIRGER: Well, John, I don't know what the market's like in Atlanta, but in the Northeast, I know on the West Coast, these are red hot markets in which realtors are starved for listings. Maybe it's the same in Atlanta. And I know, you know, you may place that first call and they'll say no, no, no, we'll only do it for 7 percent, only do it for 6 percent. But if the average realtor is only doing maybe 10 transactions a year, I have a hard time believing that some smart negotiating on the part of the seller can't get that commission down below 6 percent.

ARENA: You know what, guys, I'm going to jump in here because I think what she really wants to know is how not to deal with an agent. You know, does she just put a sign up and hope for the best? Should she advertise? Should she...

ADAMS: I think there are three things that she's got to do to get this house sold, and John can jump in. First, I think the house has to be in excellent condition. This marketplace will not accept homes that are in poor shape. And if they are in poor shape, your average buyer is just going to bypass it and you're going to be dealing with investors who are going offering relatively low offers. So the house has got to be in great condition.

Second, the house has to be priced properly. I recommend getting an appraisal and sticking with that appraisal instead of trying to build a lot of wiggle room in.

And the third thing is, the house has to be marketed properly. Certainly you can put a sign up and a sign is a very powerful marketing tool. Obviously, people are driving that neighborhood looking for homes, they're going to see that sign. Likewise, you can run an ad in the classified section.

The one thing that real estate professionals bring to the table that you simply cannot duplicate yourself, is the multiple listing service. Whether or not she needs that level of marketing, I don't know, but in Atlanta, 40 percent of our market is out-of-town buyers. And those buyers are being transferred into town by Coca-Cola. They've had their house bought in Poughkeepsie. They've got a pocketful of cash and they're not going to sit at the Crowne Plaza and look through the classifieds, they're going to be out working with an agent. And agents typically show listed houses.

ARENA: All right. We're going to move on. Ed is on the phone from Washington. He wants to know how much money to put in a house before he sells it. Ed, go ahead.

CALLER: Yes. This question is really addressed to John with "Money" magazine I guess because is he from the West. BIRGER: I'm actually from the north...

CALLER: I built a home five years ago in an upscale area of Spokane, Washington, and we made a mistake in terms of carpeting, too light of colors, things of that sort. We're going to downscale now, go from a 4600 square-foot home to a smaller home, not on an acre. We've been told, put in darker carpeting, put in some tiling, things of that sort. I don't know whether it's wise to put any money into the home.

BIRGER: It's hard for me to know without having a good sense of what the Spokane market is like. I'm actually from New York, not from the West. I can just extrapolate from my own experience in suburban New York that the house that we ended up buying had a lot of asbestos in the basement. And I initially -- once I discovered this through the inspection process, I initially balked at the asking price that the owners were demanding, but I quickly learned through my broker that there were three other potential buyers out there who were willing to pay the asking price.

So we sucked it up and paid to have the asbestos removed on our own. I don't know if -- John may have a better perspective on this, but if it's merely a matter of getting a new carpet, and the potential new owner, whether or not he's willing to handle the expense of that new carpet, I think in a hot market, most buyers would be willing to pay for the new carpet.

ADAMS: Let me sale in -- at least in our marketplace, I think we've got a better balance of buyers than sellers. John, based on your description, I'm going to sell in Atlanta and move to New York quick because I want to get in on that marketplace. But I think what I would do is in any market, I would want to see the competition. I think if you're going to sell your house, you need to get out and see what homes in that price range look like because the principle of substitution says that a prospective buyer is going to look at alternatives. And if they can substitute somebody else's house for less or equivalent money and the carpet's in excellent condition, they're going to do that.

My first thought would be to, perhaps if you've got a light carpet, I would dye the carpet to a darker uniform color and see if you had satisfactory results. Much less expensive. And if the carpet's in good condition, it will hold that dye.

ARENA: All right. I'm going to ask you gentlemen to stay with us and ask you two to stay with us. We'll take more of your calls and e-mail after the break. We'll be right back.

(COMMERCIAL BREAK)

ARENA: Welcome back to DOLLAR $IGNS. Our real estate experts, John Adams and John Birger are answering your questions to help take some of the guesswork about selling your home.

Gentlemen, we have a call from Susie in Texas, she has a question about selling her mother's house. Go ahead, Susie? Susie?

CALLER: No, this is Ed Mattfield (ph).

ARENA: Whoops, we have a -- go ahead, Matt, ask your question. Sorry about that.

CALLER: OK. That's OK. My mother recently passed away. Prior to her death, we had completely restored the house inside and out. My question is, we are having a professional estate sale using a minimum reserve, should we try to sell the house during the sale?

ADAMS: I would recommend that you go ahead and get the estate sale done, get everything out of the house that is not going to remain with the house. Here's why. People have a tendency to come in, especially if you had the house redone and have a lot of nice furniture, people will come in and ask for things that are actually not part of the real estate with the contract. And you may not want to sell those with the house. I'd wait until the house didn't have that much stuff in it and sell it after I was done with the estate sale.

BIRGER: That sounds reasonable. The only caveat is that frequently rooms look bigger with furniture in them. So a bare room, a bare living room might look smaller to the naked eye than it actually is.

ARENA: All right. We do have some e-mail questions, as well. Let's go to those. Babs from Atlanta wants to know: "What questions should be asked of a prospective real estate agent who wants to represent a seller?" Gentlemen.

ADAMS: Well, I think there's -- the number one question is what are you going to do to sell my house? I think it's appropriate to ask for what is called a written competitive market analysis. This is not an appraisal. But it's an estimate of a selling price. There's a difference there. And it will give you a real good idea of this person's working knowledge of the marketplace. Then I think it's appropriate to ask for a written marketing plan. And I would say to this person, look, I can put a sign in the yard. I can run an ad in the paper. What are you going to do to get my property marketed? What can I count on from you? Will you put that in writing? And can we have a weekly conference every Thursday morning over a cup of coffee until this house is sold?

BIRGER: That's good advice. The only thing I'd add is that it's always helpful to get references from friends or neighbors who have dealt with local real estate firms just to get a sense of who the top brokers are in your given market.

ADAMS: That's great advice.

ARENA: All right. We'll end on that note. I want to thank you both for joining us, John Adams and John Birger, have a great weekend.

ADAMS: Thanks, Kelli. BIRGER: Thank you.

ARENA: All right, take care.

Well, that's all the time we have for now, but stay with CNN. Up next "PEOPLE IN THE NEW" profiles Michael Jackson and Oscar-winning actor Denzel Washington. Then at 6 p.m. Eastern, on "CNN LIVE SATURDAY," she helped provide pictures of fallen soldiers' coffins to a Seattle newspaper. We'll talk with Amy Katz about the controversy surrounding the photos and her photographer friend who ended up getting fired.

And at 7:00 p.m., "THE CAPITAL GANG" talks with Bush-Cheney reelection campaign Ken Mehlman.

I'll be back after a quick break with today's top stories.

(COMMERCIAL BREAK)

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Aired April 24, 2004 - 16:29   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KELLI ARENA, CNN ANCHOR: Hello, I'm Kelli Arena, and here is what's happening at this hour.
Across Iraq at least 26 people were killed today, among them, 12 Iraqis killed in an explosion at a crowded market in a largely Shiite neighborhood in Baghdad. North of the capital, five American soldiers were killed and six were wounded in a rocket attack on a coalition base.

Palestinian leader Yasser Arafat is speaking out today, dismissing Israel's latest threats against him. His comments follow a statement by Israeli Prime Minister Ariel Sharon. In it, Sharon said his government no longer feels bound by a promise not to target Arafat in its crackdown on terrorism.

In Washington, several hundred people took to the streets today to protest globalization and the policies of the World Bank and the International Monetary Fund, but the crowd was much smaller than expected. Police set up barricades, shutting down several downtown streets.

San Diego Chargers chose Eli Manning to kick off today's NFL draft. The 23-year-old former University of Mississippi quarterback had vowed to sit out a season rather than play for the Chargers, but the situation was quickly resolved when the Chargers traded him to the New York Giants.

Welcome to DOLLAR $IGNS where we help you make the most of your money. Today we're going to help you do something more, sell your home. Such a move can be fraught with pitfalls and anxiety, but our Fredricka Whitfield helps you take the worry out of making the big sale.

(BEGIN VIDEOTAPE)

FREDRICKA WHITFIELD, CNN CORRESPONDENT (voice-over): So you're ready to pack it up and move out. Perhaps the upkeep has gotten too tough. If you're like Ina and Elijah Moore, your four bedroom of the last 33 years is just too much.

ELIJAH MOORE, HOME SELLER: Moving to a comprehensive retirement center and looking forward to it.

WHITFIELD: Especially since selling their Atlanta house and one- acre yard was a breeze.

INA MOORE, HOME SELLER: We had all kinds of nightmares but we haven't had to experience them.

WHITFIELD: Theirs sold before the "for sale" sign was in place.

I. MOORE: We had an excellent real estate agent.

WHITFIELD: Maybe.

PEGGY HIBBERT, REAL ESTATE AGENT: So you just sign "Ina" right there.

WHITFIELD: But their agent Peggy Hibbert credits them too. They had their home inspected and repaired before putting it on the market, and tidied up.

(on camera): Going into selling a home there's always so much trepidation. How did you guys approach it?

E. MOORE: Well, just prepping the yard, also cleaning the house.

I. MOORE: Removing some of our clutter.

E. MOORE: Yes, putting away a few things.

WHITFIELD (voice-over): Hibbert says sellers out there, listen up.

HIBBERT: It's where adage of curb appeal really comes into play.

WHITFIELD: When buyers take this walk, this is what happens.

HIBBERT: By the time they pass over the threshold, they have pretty much decided whether or not they think this house is going to work for them.

One of the most important things you can do is if you know someone's coming to the house, don't be there, but before you go be sure to turn every light in the house on. When they walk in, they want to feel like it's an easy house to live in, well lit, and has that nice warm homey feel to it. Then a potential buyer feels like, oh, I could just move in and live here and life would be like this.

Charm is things like, I know that some realtors tell people to get rid of all the family pictures, you know, anything that's personal. But to a certain degree, I think that adds that sense of warm, caring people live here and enjoy this house.

All you have to worry about getting packed.

(LAUGHTER)

E. MOORE: That's still a big job.

WHITFIELD: The Moores showed in many ways their home was integral to their loving family and that just might be what helped sell it so fast.

Fredricka Whitfield, CNN, Atlanta.

(END VIDEOTAPE)

ARENA: Well, whether you're selling a large house like the Moores, or a nice little condo, our guests today can help you. John Adams is a real estate adviser in Atlanta, and the host of his own show on WGFT radio.

JOHN ADAMS, REAL ESTATE ADVISER: That's right.

ARENA: And John Birger is with "Money" magazine in New York, the magazine's June issue is devoted to real estate.

Gentlemen, thank you both for joining us.

JOHN BIRGER, "MONEY": Thank you.

ARENA: So tell me, what is the first consideration a person needs to make before they decide to sell their home? John Adams, why don't we start with you. I can't say John this time because you'll both -- so John Adams, what do you think, is it selling the home that you have?

ADAMS: I don't think so. I think if you get your house on the market and it's priced properly, it's priced reasonably for the marketplace and it's in good condition, it's being marketed, you can expect it to sell. I think you need to make sure you've got someplace to go, so you'll want to go ahead and be looking for a replacement property at the same time that your house is going on the market. But I think getting yours ready is the first step.

BIRGER: Yes, I would agree with that. I think in general, it's easier to sell a home in this market than it is to buy one just because the supply of new homes is so thin right now. So you might -- if you can swing a situation in which you may have two mortgages for a short period of time, I think that's something you might want to think about because if you immediately sell your home thinking that you'll soon be able to buy a new home, given how hot today's market is, that might not be doable.

ARENA: Well, we already have phone calls. This is a very hot topic. Donna in Maryland calls asking when you should start thinking about putting that house up for sale. Donna, go ahead.

CALLER: Hi. Well, that's it exactly. We're having a house built, and it will be ready, they say, November. Is it -- and of course, this is the prime time in our area. We're suburban D.C., is it too early?

ADAMS: Well, let me jump in. I think if you were to sell the house at this point, obviously you'd be without a house for six months, and that's going to be a problem. You can begin marketing your home now and make your sale contingent upon your ability to remain in the house until November.

ARENA: So rent it back, basically, right? ADAMS: Exactly. And I think I'd like to see you go ahead and market the property simply because there's a possibility of rising interest rates. You may find that buyers are prepared to go ahead, purchase your house now and lock in a low interest rate, be prepared to rent back to you for several months and that gives you time to get ready for your house being built.

BIRGER: Keep in mind, though, that springtime is traditionally the kickoff of the home buying season, in part because school is ending. People start thinking about moving because the school year has ended. So in general, I mean, if you can wait until springtime, you might get more bids than you would in November.

ADAMS: I would jump in and say, we're in Atlanta and it's springtime.

BIRGER: Well, I'm thinking more about the school calendar.

ARENA: So sort of toward the end of the school year is what you're saying.

BIRGER: Yes.

ARENA: OK, all right. Well, I have another question for you. What about realtors' commissions? Are those set in stone? How much wiggle room does a seller have.

BIRGER: John and I might disagree on this. But I think there's a lot of wiggle room. And I'm not talking about going to a discount real estate broker, but I think with full service realtors, you should be perfectly -- you should be able to play brokers off each other and negotiate a lower rate. There's -- if a broker tells you that 6 percent is the standard, you should not accept that. You should try to negotiate, have them negotiate against each other and you should be able to get that down.

ADAMS: I'm going to take just a little bit of a twist on that. My sense is there's no reason to pay a commission at all unless you choose to do so. My approach at this point would be, especially if you've got six months, why not test the waters yourself? Why not set a time period, 30 days, 45 days, and say, we're going to market this home ourselves?

My advice would be to put a sign out front that says "for sale by owner, appointment only." And then I would put a sign underneath that that says "brokers welcome" and offer to pay a finder's fee.

And John, I agree with you. All commissions are completely negotiable during this time period, you can offer to pay a flat fee or a percentage or whatever you think is fair. And if a broker brings an offer to you that's acceptable, you're willing to negotiate with that, build their fee into that price, that's fine.

But with six months to spare, you've got plenty of time to test the waters right now, see if you need to be paying a full service commission fee. If you had a shorter period of time, I'd recommend turning it over to a professional.

ARENA: All right, gentlemen, we are going to take a little break here. But your calls and e-mails next on DOLLAR $IGNS, and of course you can still send your question to dollarsigns@cnn.com, or call us, the number again, 1-800-807-2620. These guys are loaded with advice. We'll be right back.

(COMMERCIAL BREAK)

ARENA: This hour's top stories, five more American soldiers killed in Iraq today. An Ohio priest is arrested in the 1980 killing of an elderly nun. And four workers are now confirmed dead in the explosion of an Illinois plastics plant.

Welcome back to DOLLAR $IGNS. We're talking about the best ways to sell your home. John Adams is a real estate adviser and John Birger is with "Money" magazine.

Gentlemen, lots of calls, first from Patricia in Georgia, wants to pick up on where we left off, talking about selling without an agent, Patricia?

CALLER: Yes, hi, John.

ADAMS: Hi.

CALLER: I bought my home two years ago. But I'm a young senior and I'm not able to take care of the property. Therefore, I decided to resell again and find myself a smaller place. I'm charged 3 percent for my listing agent and 3 percent for the selling agent. Then I decided that I would go on my own, but I have no experience in real estate. So tell me what do I do?

ADAMS: Well, go ahead, John.

BIRGER: Well, I think there's a middle ground. And John and I may disagree on this, but the United States is the only Western country where commission rates are in the 6 percent range. In most other Westernized countries they're closer to 2 percent, which tells me that there's a lot of room to negotiate downward full service commission.

So I would not be afraid to interview five or six full service realtors, tell them that price is an issue for you, and see if they'll lower their commissions from 6 percent, maybe to 5, maybe to 4.5. There's no reason why commissions have to be 6 percent.

ADAMS: Well, and let me just respond to that. I can only speak to the Atlanta marketplace I'm familiar with. But I can tell you this, if you call a full service broker and say, I'd like to you list my house for sale and I can give you 4 percent, there's a problem with that. First their broker will not accept the listing. They have an in-house rule that they only accept 6 or even in this marketplace sometimes 7 percent. And that's legal for the broker to make that decision. You're also free not to list with them, but if you want their level of professional assistance you may have to pay that price. The other problem is that the selling agent that's bringing the buyer into the door is going to expect a reasonable fee. And if you've listed the house, say, at 2 percent and that agent comes in and finds out they're going to get 1, they won't show the house in the first place.

BIRGER: Well, John, I don't know what the market's like in Atlanta, but in the Northeast, I know on the West Coast, these are red hot markets in which realtors are starved for listings. Maybe it's the same in Atlanta. And I know, you know, you may place that first call and they'll say no, no, no, we'll only do it for 7 percent, only do it for 6 percent. But if the average realtor is only doing maybe 10 transactions a year, I have a hard time believing that some smart negotiating on the part of the seller can't get that commission down below 6 percent.

ARENA: You know what, guys, I'm going to jump in here because I think what she really wants to know is how not to deal with an agent. You know, does she just put a sign up and hope for the best? Should she advertise? Should she...

ADAMS: I think there are three things that she's got to do to get this house sold, and John can jump in. First, I think the house has to be in excellent condition. This marketplace will not accept homes that are in poor shape. And if they are in poor shape, your average buyer is just going to bypass it and you're going to be dealing with investors who are going offering relatively low offers. So the house has got to be in great condition.

Second, the house has to be priced properly. I recommend getting an appraisal and sticking with that appraisal instead of trying to build a lot of wiggle room in.

And the third thing is, the house has to be marketed properly. Certainly you can put a sign up and a sign is a very powerful marketing tool. Obviously, people are driving that neighborhood looking for homes, they're going to see that sign. Likewise, you can run an ad in the classified section.

The one thing that real estate professionals bring to the table that you simply cannot duplicate yourself, is the multiple listing service. Whether or not she needs that level of marketing, I don't know, but in Atlanta, 40 percent of our market is out-of-town buyers. And those buyers are being transferred into town by Coca-Cola. They've had their house bought in Poughkeepsie. They've got a pocketful of cash and they're not going to sit at the Crowne Plaza and look through the classifieds, they're going to be out working with an agent. And agents typically show listed houses.

ARENA: All right. We're going to move on. Ed is on the phone from Washington. He wants to know how much money to put in a house before he sells it. Ed, go ahead.

CALLER: Yes. This question is really addressed to John with "Money" magazine I guess because is he from the West. BIRGER: I'm actually from the north...

CALLER: I built a home five years ago in an upscale area of Spokane, Washington, and we made a mistake in terms of carpeting, too light of colors, things of that sort. We're going to downscale now, go from a 4600 square-foot home to a smaller home, not on an acre. We've been told, put in darker carpeting, put in some tiling, things of that sort. I don't know whether it's wise to put any money into the home.

BIRGER: It's hard for me to know without having a good sense of what the Spokane market is like. I'm actually from New York, not from the West. I can just extrapolate from my own experience in suburban New York that the house that we ended up buying had a lot of asbestos in the basement. And I initially -- once I discovered this through the inspection process, I initially balked at the asking price that the owners were demanding, but I quickly learned through my broker that there were three other potential buyers out there who were willing to pay the asking price.

So we sucked it up and paid to have the asbestos removed on our own. I don't know if -- John may have a better perspective on this, but if it's merely a matter of getting a new carpet, and the potential new owner, whether or not he's willing to handle the expense of that new carpet, I think in a hot market, most buyers would be willing to pay for the new carpet.

ADAMS: Let me sale in -- at least in our marketplace, I think we've got a better balance of buyers than sellers. John, based on your description, I'm going to sell in Atlanta and move to New York quick because I want to get in on that marketplace. But I think what I would do is in any market, I would want to see the competition. I think if you're going to sell your house, you need to get out and see what homes in that price range look like because the principle of substitution says that a prospective buyer is going to look at alternatives. And if they can substitute somebody else's house for less or equivalent money and the carpet's in excellent condition, they're going to do that.

My first thought would be to, perhaps if you've got a light carpet, I would dye the carpet to a darker uniform color and see if you had satisfactory results. Much less expensive. And if the carpet's in good condition, it will hold that dye.

ARENA: All right. I'm going to ask you gentlemen to stay with us and ask you two to stay with us. We'll take more of your calls and e-mail after the break. We'll be right back.

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ARENA: Welcome back to DOLLAR $IGNS. Our real estate experts, John Adams and John Birger are answering your questions to help take some of the guesswork about selling your home.

Gentlemen, we have a call from Susie in Texas, she has a question about selling her mother's house. Go ahead, Susie? Susie?

CALLER: No, this is Ed Mattfield (ph).

ARENA: Whoops, we have a -- go ahead, Matt, ask your question. Sorry about that.

CALLER: OK. That's OK. My mother recently passed away. Prior to her death, we had completely restored the house inside and out. My question is, we are having a professional estate sale using a minimum reserve, should we try to sell the house during the sale?

ADAMS: I would recommend that you go ahead and get the estate sale done, get everything out of the house that is not going to remain with the house. Here's why. People have a tendency to come in, especially if you had the house redone and have a lot of nice furniture, people will come in and ask for things that are actually not part of the real estate with the contract. And you may not want to sell those with the house. I'd wait until the house didn't have that much stuff in it and sell it after I was done with the estate sale.

BIRGER: That sounds reasonable. The only caveat is that frequently rooms look bigger with furniture in them. So a bare room, a bare living room might look smaller to the naked eye than it actually is.

ARENA: All right. We do have some e-mail questions, as well. Let's go to those. Babs from Atlanta wants to know: "What questions should be asked of a prospective real estate agent who wants to represent a seller?" Gentlemen.

ADAMS: Well, I think there's -- the number one question is what are you going to do to sell my house? I think it's appropriate to ask for what is called a written competitive market analysis. This is not an appraisal. But it's an estimate of a selling price. There's a difference there. And it will give you a real good idea of this person's working knowledge of the marketplace. Then I think it's appropriate to ask for a written marketing plan. And I would say to this person, look, I can put a sign in the yard. I can run an ad in the paper. What are you going to do to get my property marketed? What can I count on from you? Will you put that in writing? And can we have a weekly conference every Thursday morning over a cup of coffee until this house is sold?

BIRGER: That's good advice. The only thing I'd add is that it's always helpful to get references from friends or neighbors who have dealt with local real estate firms just to get a sense of who the top brokers are in your given market.

ADAMS: That's great advice.

ARENA: All right. We'll end on that note. I want to thank you both for joining us, John Adams and John Birger, have a great weekend.

ADAMS: Thanks, Kelli. BIRGER: Thank you.

ARENA: All right, take care.

Well, that's all the time we have for now, but stay with CNN. Up next "PEOPLE IN THE NEW" profiles Michael Jackson and Oscar-winning actor Denzel Washington. Then at 6 p.m. Eastern, on "CNN LIVE SATURDAY," she helped provide pictures of fallen soldiers' coffins to a Seattle newspaper. We'll talk with Amy Katz about the controversy surrounding the photos and her photographer friend who ended up getting fired.

And at 7:00 p.m., "THE CAPITAL GANG" talks with Bush-Cheney reelection campaign Ken Mehlman.

I'll be back after a quick break with today's top stories.

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