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Dollar Signs

Aired February 22, 2003 - 16:30   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.


CAROL LIN, CNN ANCHOR: Hi there, and welcome to DOLLAR SIGNS. I'm Carol Lin here at the CNN Center.
There are a lot of uncertainties in the housing market right now, what with looming war with Iraq and a sluggish economy. So, is it a buyer's market or a seller's?

Well, in our DOLLAR SIGNS segment today we want to focus on how you can put your house on the market and get the deal that you want. And, if you have questions or comments please give us a call at 1-800- 310-4CNN, or go to cnn.com and click on the DOLLAR SIGNS box to e-mail us.

In the meantime, senior business correspondent Rhonda Schaffler is here to look at the latest trends, Rhonda good to have you down here.

RHONDA SCHAFFLER, CNN SR. BUSINESS CORRESPONDENT: Carol, it's great to see you in person and it's a lot of fun to be here.

And this is a real great story to talk about. This has been the story of the last couple of months because America is in the midst of a housing boom. It has defied expectations, shows no signs of stopping.

There were some new figures out this week showing that builders are breaking ground on new homes at a rate we have not seen since the mid '80s, and this comes after 2002, which was a record year for home sales.

One reason why, interest rates, four decade lows and the news got better this week, mortgage rates dropping to 5.90 percent on a 30-year loan, and 5.25 percent on 15-year fixed mortgages. It's not just about low rates and good deals.

We're also seeing people make money. Home values are on the rise. The National Association of Realtors says home prices jumping nearly nine percent in the last few months of last year, the median price of a home over $161,000 now. Few investors we know would see that sort of gain in their stock portfolios.

And, this is an important subject to focus on here because we know the bubble burst in the stock market. So, could the housing market deflate as well, because now we're worried over what's next with Iraq? And, of course, terrorism fears are there too. It's hard to know what's next because the trends we just told you about really caught the experts by surprise. But if you want to get in on the boom and want to get a sold sign on your property, there are some ways to get that done.

Make sure your house is part of a multiple listing service. That gets the maximum number of people in to look at your home. Get your broker to give you a comparable market analysis so you know what other homes are selling for in the neighborhood. If you've got a problem, fix it. You don't want it to come back and haunt you after the sale.

Also, if you're looking to buy this should help educate yourself about the market so you don't underbid on a home you're interested in. Fix credit problems. Get a credit report. Make sure you're not going to have trouble getting a loan, and if possible try to get pre- qualified for a mortgage because that way the sellers know that you're actually serious when you come up with a bid.

And you know, Carol, even if you're not in the market to buy or sell, these interest rates have been so helpful. We've had people refinance their homes several times, so it's really been a boom.

LIN: Yes, record interest rates. We haven't seen these interest rates, what, since the '50s?

SCHAFFLER: Well, you know, it's interesting. Freddie Mac starting keeping track of this in 1971 and this week they said this is the lowest since they began keeping track.

LIN: Yes, it's pretty nutty and even if you're not selling, it's a good idea to probably refinance now.

SCHAFFLER: Oh yes, and people refinance more than once, twice, three times, serial re-financers they call them in fact.

LIN: I can count myself as one of them, yes. In the meantime, all right, so you put your "For Sale" sign out front, now what? Is there anything you can do to make your house sell?

Well, a new book called "50 Simple Steps you can Take to Sell Your Home" could actually help. Author Ilyce Glink is in Chicago and she's an expert on home selling and buying, Ilyce good to see you.

ILYCE GLINK, SYNDICATED JOURNALIST: Hi, it's nice to be here.

LIN: All right, Rhonda and I were talking about what a great time it is to re-finance, maybe even buy a house, but for those who might have to sell in a wartime economy, I think you've got some advice for us.

GLINK: I do. The first thing you have to do is get realistic about your price because the days of 1995 to say 2002, where any price you put on your house and it instantly sold just like that, those days are gone. People have to get much more realistic, even in the first time buyer range, which has stayed pretty high.

SCHAFFLER: Let's define realistic then.

GLINK: Realistic means you're not putting a pie in the sky price on it. If everything in the neighborhood is selling for $400,000, there's no reason for you to price your home at $550,000. It's just not going to sell. Realistic would mean you'd be aiming to meet just where the market is because if the demand is there what will happen is that lots of people are going to bid on your home and that will push the price up naturally.

SCHAFFLER: Ilyce, what else can you do?

GLINK: Well, I think it's important to think about offering incentives. Now homes -- we used to measure home sales in a matter of minutes or even hours until you got an offer. Today, people are waiting months to get their first offers and you have to focus on some incentives that you might be able to give a buyer.

For example, you might be able to buy down their interest rate. You may be able to offer $1,000 broker incentive for the buyer broker. There are other kinds of things that you can do. I've even seen people go back to what they did in the late '80s, which is offer free cars and trips to Disney World, really.

SCHAFFLER: That might entire some people.

GLINK: It might.

SCHAFFLER: Well, what about the commission side of things?

GLINK: I think commissions are very important. If you're working with an agent, and I think in this kind of a market you probably want to be working with a very good agent, you know usually we talk about how to cut the commission, and over the last six or seven years people were able to get by paying their agents a lot less. The agents had to do less work.

Now, the agents are having to do more work and you want to have a full commission, at least six or maybe even seven percent split equally, and you've got to be asking that question ahead of time, sellers, because sometimes your seller's agent isn't going to be splitting the commission equally, and if you don't ask ahead of time that could be a bad sign for a buyer.

SCHAFFLER: And, Ilyce, I would assume that your home better be in pretty good shape if you're going to put it on the market.

GLINK: You know the worst thing that you can do is have a filthy home, I mean really there are stories and stories in my book about dirty underwear being left for the broker to come pick it up and dog droppings in the basement. My sister went through that, I have to say, my sister Phyllis.

So, you know, very important to have a spotlessly clean home but then you've got to tackle the interior condition. Buyers today are short on two things. They don't have any time and after they paid all of these terrible expensive prices for homes they don't have any cash left, so they want to buy a home that's as close to being new as possible. Your job as the seller is to get the home in that kind of condition.

SCHAFFLER: OK, Ilyce, let's say we've done all of that, then what?

GLINK: Well, I think you have to go the extra mile in your marketing. You've got to tell everybody that your house is on the market and how much you're asking for it. That means at work, putting up notices at schools. You've got to have your broker out there advertising, doing open houses, and I talk in the book about getting creative with your open houses.

Night time open houses after work, drop-by open houses, those have become very popular in different parts of the country and they can be surprisingly effective.

SCHAFFLER: What if you have your house on the market. It's just not moving. You need to get out. You bought another house. Then what?

GLINK: You know at the bottom line if you're desperate and anxious you might want to consider an auction. Over the years auctions have become a very good way to move property because what it does is concentrate everybody's attention and focus right in a very short period of time.

You get the property. You auction if off and it's gone and you're done. You may not get as much as if you waited six months. Then again you don't pay the (UNINTELLIGIBLE) costs.

LIN: And, Ilyce, at what point should you expect to be able to sell your house in this market? Is it four months, six months, what's the average now?

GLINK: It's different based on the price of property. For a million plus you're waiting three, four months sometimes to sell. Property price from say four to a million, it could easily be three to four months. If you want to shave the time, you're going to shave the price.

LIN: All right, so and then after that period of time if it hasn't sold you really should look hard and fast at that price, right?

GLINK: You've got to look at the price. You've got to look at the condition. You know as a seller your job is to meet or exceed the buyer's expectations of your property at the price it's listed at. If you're not selling, you're either not meeting or exceeding their expectations on price or condition and it's time to go back and take another look. You also want to make sure that your agent is aggressively marketing your property.

LIN: There you go. All right, thanks so much. Stay right there, Ilyce, because after a break what to watch for if you're buying a home during wartime, some tips to make it work for you just ahead.

(COMMERCIAL BREAK)

LIN: A healthy pause there. Welcome back. We are talking with real estate author Ilyce Glink about the housing market and the best ways to sell your house, especially in a war time economy.

Ilyce, we've gotten some e-mails for you and I've got an interesting one from John Londo (ph). He's in Miami and it says: "For an investor who has now an opportunity to buy a house at a very good price, is this a good moment to do it? Do you think that in a lapse of two to three months, it would be easy to resell?" So, it looks like John's looking to flip his property.

GLINK: You know, flipping properties is sort of a dangerous business right now and the way it works best is typically when you find a property that's in lousy condition. It's ugly. It doesn't need structural repairs but it needs a lot of cosmetic improvement. We're talking major TLC.

So, John, if this property that you found in Miami is one of those that in two or three months you can really kind of put in some beautiful new appliances and get it all painted white, put in some new carpet and then you're going to be able to turn it around and not price it. Again, pie in the sky pricing isn't going to work in this market. Then, I think that you're going to probably be okay. But again, three months we could be in the middle of a war and then I think all bets are off.

If you look back at what happened back in 1991, we were in the Persian Gulf War people just sat home and watched TV. They were watching CNN basically. I know I was and nobody was doing anything in the real estate market. It was really dead for a matter of months. So, as long as you're prepared financially for that and you can float the property an extra couple of months if you have to, it's probably not a bad idea.

LIN: Right.

SCHAFFLER: You know, Ilyce, let's run through some tips on buying a home because when we talk about the financial side of it, the obvious question is what can you afford and the thing is you think you know what you can afford and then you hear these stories about people becoming house poor.

GLINK: Knowing how much you can spend is probably the most important thing right now and for most of us you're going to be able to afford a surprisingly large amount of money and that just is a complete function of where interest rates are.

I know, Rhonda, at the top of the show you started with how interest rates are now at some sort of 42-year low. I also saw the Freddie Mac numbers this week and it's sort of astonishing. You know if you've got some money to put down in cash, 5.50 or 5.75 percent is going to allow you to buy something like four times your gross annual income.

At eight percent, which is where interest rates were just like last year or the year before, you were only able to buy say two and a half to three times your gross annual income. So, knowing how much you can spend gives you the power to go out and buy something right away.

SCHAFFLER: Buying power is really amazing. What else do you need to know?

GLINK: I think you need to know your neighborhood. You know people think oh, I love the house. It's great. The house is perfect but it's in a lousy neighborhood and once they move in they find they don't like going to the house or coming from the house. They don't want their kids walking in the neighborhood.

The house is only just one piece of the larger picture. You really need to spend time in the neighborhood, visiting the local stores, going back and forth, driving the commute. That's how you get to know whether the neighborhood is as right for you as the house might be.

SCHAFFLER: Also hard to get to know the right broker. We get inundated in our mailboxes with these real estate notices. How do you know who to call?

GLINK: I think choosing the right broker is probably one of the, again, the top tier of important things that you need to do. Look around at the "For Sale" signs in the neighborhoods in which you're interested. They'll be sort of maybe the two or three top firms that constantly you're going to see the same names over and over again.

You can call those firms and ask who works in those neighborhoods. Start interviewing brokers. You know people think that any broker, they should just pick one off the top of their head or yellow pages and that person will, you know, be happy to work with them.

You should be the one deciding. You're the one with the money. You're bringing it to the party. You have to interview it to make sure you've got a broker who's going to listen to you.

SCHAFFLER: Ilyce, what if I'm stubborn. Can I still buy a house?

GLINK: You know just get in line with everybody else; compromise, compromise. I think that that really is the buzz word here because even though you're able to buy more house than you ever were before, houses are very expensive now and we've seen tremendous appreciation over the last seven years.

So, you're going to have to make some compromises. Only Bill Gates is rich enough to get everything in his house and look he's adding on now. So, even he didn't get everything he wanted the first time.

SCHAFFLER: Great points.

LIN: Oh my gosh Ilyce, we've got another e-mail here from Rebecca Curtis (ph) from St. Pete Beach. She writes: "Right now our house is worth more than we paid for it. We want to sell it and buy another one. If war is declared I'm afraid it will not be worth as much anymore. Should we sell now or wait and see what happens?" That's the bottom line.

GLINK: There's a lot of talk about the whole bubble in real estate and are we going to have a bubble in prices of housing the way that we had it with the stock market? I don't see that happening but what I do see happening is prices leveling out, particularly if there is a war.

Now, if you're in an area that's been hard hit, say Houston, terribly hard hit by Enron, layoffs, or on the West Coast back in the late '80s. They were closing down bases. If you're in an area like that, which is economically hit hard, then home prices may go down because everybody's putting on their houses at the same time.

But if you're one in a neighborhood of 10,000 houses and you're the only one on the market, I don't think you have a whole lot to worry about in terms of price deflation.

LIN: All right, thanks so much Ilyce. Well, I do remember back in the Gulf War, some houses were listed by accident at $100,000 less in the real estate ads and still nobody showed up at the open houses.

SCHAFFLER: Yes, that's amazing.

GLINK: Yes, it was really something.

LIN: Yes, strange market but we'll see what happens. We're going to take more of your calls and e-mails right after this break.

(COMMERCIAL BREAK)

LIN: And welcome back. We are talking with real estate author Ilyce Glink about the housing market and the best ways to sell your house.

Ilyce, we've got another e-mail for you from Troy Christensen (ph), and he writes from Houston, Texas: "My company is transferring me to the Washington, D.C. area next month. I am currently house- hunting and wonder if the war will drive housing prices down in the Northern Virginia area."

Is there a particular market that he should be thinking about because it's the nation's capital?

GLINK: You know D.C. is sort of an interesting area. Nationally I think prices, as I said earlier, are going to remain kind of level or continue to go up slightly depending on where you are.

In Washington, D.C., you've got so many people who work for the government. They're all tied into government pay scales that prices tend to not move up as dramatically as they do in the rest of the country. Now, that's Georgetown aside, which is outrageously expensive and people there are buying two-bedroom apartments for like $700,000.

But in the surrounding suburban areas, prices have tended to just kind of move up very gradually and slowly, again mostly because people work for the government and they're tied to government pay scales.

So, I don't see a lot of price deflation. It wasn't like in Lower Manhattan after September 11, when large quantities of people and businesses sort of exited the island and prices dropped precipitously. We didn't see that in the aftermath even though the Pentagon got hit. So, I think you're probably safe. The prices will continue to appreciate very sort of slowly, moderately.

LIN: All right. We've got a phone call now from Elaine in Adirondack, New York. Elaine, you've got a question about downsizing?

ELAINE: Yes, I do. My husband and I are going to each now -- he's getting ready to retire and we have a very nice home but it's large for just the two of us since the children have left.

Because of the war, though, I'm a little bit -- the possibility of war, excuse me, I'm a little bit concerned. Do I sell now and go ahead with our dreams of having a home in warmer climate and one in the Adirondacks, a small one or do I wait? What do I do?

GLINK: I guess, Elaine, I'd have to ask you when would you sell just in the normal course of things? Would you be putting on your house right now?

ELAINE: Yes.

GLINK: I think that you should talk to some local agents about how homes like yours are selling in your neighborhood and kind of feel them out as to how long the properties are sitting on the market. You know we don't actually have a war. We have a lot of talk about it.

ELAINE: Right.

GLINK: It could all be a big game of chicken. I mean who knows what's really going to happen next week or the week after? So, you don't want to defer your plans forever. I certainly think by the summer if you wanted to put your house on the market and you're worried about, you know, tensions now you could simply wait until June or July when things, you know, kind of calm down a little bit and just try and sell your home in the summer which in the Adirondacks must be a very beautiful time to list your property.

ELAINE: Actually, all seasons are here.

GLINK: You bet they are.

SCHAFFLER: Ilyce, a question for you here and perhaps a clarification because you know our viewers have heard that the economy is uncertain because of this potential conflict with Iraq but we really have to separate housing out because housing has done so well over the past couple of months that perhaps it can withstand a shock a little bit better than other parts of the economy. GLINK: I think that parts of housing are going to be just fine and parts of it aren't. It depends. You know if the war is a long protracted thing, people are going to stay and watch television. They're going to stay home. They're not going to be out looking for homes even with interest rates as low as they are.

The other thing that really drives it are jobs. You know you're starting to get dangerously close all the time now to being at that 400,000 number for jobs, the job loss each week.

And so, when people are unemployed or they're nervous about losing their jobs, they tend to be less certain about spending large amounts of money. They don't really want to trade up their property, increase the size of their mortgages. So, housing has been really a pillar of strength in this economy but it could be slowing down this year and I think we all have to be prepared for that.

LIN: All right, another question on the telephone from Stephanie in Olmsted, Ohio, go ahead Stephanie.

STEPHANIE: Hi. I have a question. We have our house currently on the market and we've been -- we've had the house up for a couple of weeks now. We've gotten a lot of really good activity, very good showings. We got a lot of really good feedback from the realtors who saw our house at the broker's open.

My question is we haven't found a house of our own yet and we're only a couple of weeks in. Due to the situation with whether we're going to war or not going to war and the length of time that it's taking to sell a home, should we have our eye on one in particular already?

GLINK: Well, Stephanie, do you know the neighborhood that you're interested in moving to? Have you identified that neighborhood?

STEPHANIE: We have, yes. The city is in our general location, absolutely yes.

GLINK: OK, so what I would start to do is start to take a look at the open houses in that neighborhood and start to visit them and get a sense of what homes are selling for. I wouldn't be making any fast moves but I would be identifying possible homes. If you're worried -- it sounds like you're getting a lot of activity so for you it's probably just a numbers game.

A certain number of people have to cross your threshold before you're going to get somebody who's making an offer. But when that happens, I'd be ready to go, knowing what's available on the market, knowing how much you can afford to spend, being pre-approved for you home loan by a local mortgage lender, all ready to go on your side so you can move fast when you want to. The worst thing could -- I think would be to carry two homes right now. I'd much prefer to sell, rent, and then buy if you don't think you can time it right.

LIN: All right, thanks so much Stephanie for your call. Ilyce stay right there. We're going to try to squeeze in a couple more calls and e-mails if we've got time after the break but stay right there.

(COMMERCIAL BREAK)

LIN: Well, I hope this new information is going to help our viewers deal with the uncertainties of this housing market. I know it's a really nervous time and I want to thank our CNN Senior Business Correspondent Rhonda Schaffler for flying all the way down here from New York. We love it when you guys come down.

SCHAFFLER: It's great being with you, Carol, a lot of fun.

LIN: And we'll do this again.

SCHAFFLER: OK.

LIN: And we also want to thank author Ilyce Glink. Her book is "50 Simple Steps you can Take to Sell Your Home Faster" for more money in any market, sounds good to me Ilyce, thank you so much for joining us.

GLINK: Sure thing.

LIN: All right, and Anderson Cooper now has more news.

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Aired February 22, 2003 - 16:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL LIN, CNN ANCHOR: Hi there, and welcome to DOLLAR SIGNS. I'm Carol Lin here at the CNN Center.
There are a lot of uncertainties in the housing market right now, what with looming war with Iraq and a sluggish economy. So, is it a buyer's market or a seller's?

Well, in our DOLLAR SIGNS segment today we want to focus on how you can put your house on the market and get the deal that you want. And, if you have questions or comments please give us a call at 1-800- 310-4CNN, or go to cnn.com and click on the DOLLAR SIGNS box to e-mail us.

In the meantime, senior business correspondent Rhonda Schaffler is here to look at the latest trends, Rhonda good to have you down here.

RHONDA SCHAFFLER, CNN SR. BUSINESS CORRESPONDENT: Carol, it's great to see you in person and it's a lot of fun to be here.

And this is a real great story to talk about. This has been the story of the last couple of months because America is in the midst of a housing boom. It has defied expectations, shows no signs of stopping.

There were some new figures out this week showing that builders are breaking ground on new homes at a rate we have not seen since the mid '80s, and this comes after 2002, which was a record year for home sales.

One reason why, interest rates, four decade lows and the news got better this week, mortgage rates dropping to 5.90 percent on a 30-year loan, and 5.25 percent on 15-year fixed mortgages. It's not just about low rates and good deals.

We're also seeing people make money. Home values are on the rise. The National Association of Realtors says home prices jumping nearly nine percent in the last few months of last year, the median price of a home over $161,000 now. Few investors we know would see that sort of gain in their stock portfolios.

And, this is an important subject to focus on here because we know the bubble burst in the stock market. So, could the housing market deflate as well, because now we're worried over what's next with Iraq? And, of course, terrorism fears are there too. It's hard to know what's next because the trends we just told you about really caught the experts by surprise. But if you want to get in on the boom and want to get a sold sign on your property, there are some ways to get that done.

Make sure your house is part of a multiple listing service. That gets the maximum number of people in to look at your home. Get your broker to give you a comparable market analysis so you know what other homes are selling for in the neighborhood. If you've got a problem, fix it. You don't want it to come back and haunt you after the sale.

Also, if you're looking to buy this should help educate yourself about the market so you don't underbid on a home you're interested in. Fix credit problems. Get a credit report. Make sure you're not going to have trouble getting a loan, and if possible try to get pre- qualified for a mortgage because that way the sellers know that you're actually serious when you come up with a bid.

And you know, Carol, even if you're not in the market to buy or sell, these interest rates have been so helpful. We've had people refinance their homes several times, so it's really been a boom.

LIN: Yes, record interest rates. We haven't seen these interest rates, what, since the '50s?

SCHAFFLER: Well, you know, it's interesting. Freddie Mac starting keeping track of this in 1971 and this week they said this is the lowest since they began keeping track.

LIN: Yes, it's pretty nutty and even if you're not selling, it's a good idea to probably refinance now.

SCHAFFLER: Oh yes, and people refinance more than once, twice, three times, serial re-financers they call them in fact.

LIN: I can count myself as one of them, yes. In the meantime, all right, so you put your "For Sale" sign out front, now what? Is there anything you can do to make your house sell?

Well, a new book called "50 Simple Steps you can Take to Sell Your Home" could actually help. Author Ilyce Glink is in Chicago and she's an expert on home selling and buying, Ilyce good to see you.

ILYCE GLINK, SYNDICATED JOURNALIST: Hi, it's nice to be here.

LIN: All right, Rhonda and I were talking about what a great time it is to re-finance, maybe even buy a house, but for those who might have to sell in a wartime economy, I think you've got some advice for us.

GLINK: I do. The first thing you have to do is get realistic about your price because the days of 1995 to say 2002, where any price you put on your house and it instantly sold just like that, those days are gone. People have to get much more realistic, even in the first time buyer range, which has stayed pretty high.

SCHAFFLER: Let's define realistic then.

GLINK: Realistic means you're not putting a pie in the sky price on it. If everything in the neighborhood is selling for $400,000, there's no reason for you to price your home at $550,000. It's just not going to sell. Realistic would mean you'd be aiming to meet just where the market is because if the demand is there what will happen is that lots of people are going to bid on your home and that will push the price up naturally.

SCHAFFLER: Ilyce, what else can you do?

GLINK: Well, I think it's important to think about offering incentives. Now homes -- we used to measure home sales in a matter of minutes or even hours until you got an offer. Today, people are waiting months to get their first offers and you have to focus on some incentives that you might be able to give a buyer.

For example, you might be able to buy down their interest rate. You may be able to offer $1,000 broker incentive for the buyer broker. There are other kinds of things that you can do. I've even seen people go back to what they did in the late '80s, which is offer free cars and trips to Disney World, really.

SCHAFFLER: That might entire some people.

GLINK: It might.

SCHAFFLER: Well, what about the commission side of things?

GLINK: I think commissions are very important. If you're working with an agent, and I think in this kind of a market you probably want to be working with a very good agent, you know usually we talk about how to cut the commission, and over the last six or seven years people were able to get by paying their agents a lot less. The agents had to do less work.

Now, the agents are having to do more work and you want to have a full commission, at least six or maybe even seven percent split equally, and you've got to be asking that question ahead of time, sellers, because sometimes your seller's agent isn't going to be splitting the commission equally, and if you don't ask ahead of time that could be a bad sign for a buyer.

SCHAFFLER: And, Ilyce, I would assume that your home better be in pretty good shape if you're going to put it on the market.

GLINK: You know the worst thing that you can do is have a filthy home, I mean really there are stories and stories in my book about dirty underwear being left for the broker to come pick it up and dog droppings in the basement. My sister went through that, I have to say, my sister Phyllis.

So, you know, very important to have a spotlessly clean home but then you've got to tackle the interior condition. Buyers today are short on two things. They don't have any time and after they paid all of these terrible expensive prices for homes they don't have any cash left, so they want to buy a home that's as close to being new as possible. Your job as the seller is to get the home in that kind of condition.

SCHAFFLER: OK, Ilyce, let's say we've done all of that, then what?

GLINK: Well, I think you have to go the extra mile in your marketing. You've got to tell everybody that your house is on the market and how much you're asking for it. That means at work, putting up notices at schools. You've got to have your broker out there advertising, doing open houses, and I talk in the book about getting creative with your open houses.

Night time open houses after work, drop-by open houses, those have become very popular in different parts of the country and they can be surprisingly effective.

SCHAFFLER: What if you have your house on the market. It's just not moving. You need to get out. You bought another house. Then what?

GLINK: You know at the bottom line if you're desperate and anxious you might want to consider an auction. Over the years auctions have become a very good way to move property because what it does is concentrate everybody's attention and focus right in a very short period of time.

You get the property. You auction if off and it's gone and you're done. You may not get as much as if you waited six months. Then again you don't pay the (UNINTELLIGIBLE) costs.

LIN: And, Ilyce, at what point should you expect to be able to sell your house in this market? Is it four months, six months, what's the average now?

GLINK: It's different based on the price of property. For a million plus you're waiting three, four months sometimes to sell. Property price from say four to a million, it could easily be three to four months. If you want to shave the time, you're going to shave the price.

LIN: All right, so and then after that period of time if it hasn't sold you really should look hard and fast at that price, right?

GLINK: You've got to look at the price. You've got to look at the condition. You know as a seller your job is to meet or exceed the buyer's expectations of your property at the price it's listed at. If you're not selling, you're either not meeting or exceeding their expectations on price or condition and it's time to go back and take another look. You also want to make sure that your agent is aggressively marketing your property.

LIN: There you go. All right, thanks so much. Stay right there, Ilyce, because after a break what to watch for if you're buying a home during wartime, some tips to make it work for you just ahead.

(COMMERCIAL BREAK)

LIN: A healthy pause there. Welcome back. We are talking with real estate author Ilyce Glink about the housing market and the best ways to sell your house, especially in a war time economy.

Ilyce, we've gotten some e-mails for you and I've got an interesting one from John Londo (ph). He's in Miami and it says: "For an investor who has now an opportunity to buy a house at a very good price, is this a good moment to do it? Do you think that in a lapse of two to three months, it would be easy to resell?" So, it looks like John's looking to flip his property.

GLINK: You know, flipping properties is sort of a dangerous business right now and the way it works best is typically when you find a property that's in lousy condition. It's ugly. It doesn't need structural repairs but it needs a lot of cosmetic improvement. We're talking major TLC.

So, John, if this property that you found in Miami is one of those that in two or three months you can really kind of put in some beautiful new appliances and get it all painted white, put in some new carpet and then you're going to be able to turn it around and not price it. Again, pie in the sky pricing isn't going to work in this market. Then, I think that you're going to probably be okay. But again, three months we could be in the middle of a war and then I think all bets are off.

If you look back at what happened back in 1991, we were in the Persian Gulf War people just sat home and watched TV. They were watching CNN basically. I know I was and nobody was doing anything in the real estate market. It was really dead for a matter of months. So, as long as you're prepared financially for that and you can float the property an extra couple of months if you have to, it's probably not a bad idea.

LIN: Right.

SCHAFFLER: You know, Ilyce, let's run through some tips on buying a home because when we talk about the financial side of it, the obvious question is what can you afford and the thing is you think you know what you can afford and then you hear these stories about people becoming house poor.

GLINK: Knowing how much you can spend is probably the most important thing right now and for most of us you're going to be able to afford a surprisingly large amount of money and that just is a complete function of where interest rates are.

I know, Rhonda, at the top of the show you started with how interest rates are now at some sort of 42-year low. I also saw the Freddie Mac numbers this week and it's sort of astonishing. You know if you've got some money to put down in cash, 5.50 or 5.75 percent is going to allow you to buy something like four times your gross annual income.

At eight percent, which is where interest rates were just like last year or the year before, you were only able to buy say two and a half to three times your gross annual income. So, knowing how much you can spend gives you the power to go out and buy something right away.

SCHAFFLER: Buying power is really amazing. What else do you need to know?

GLINK: I think you need to know your neighborhood. You know people think oh, I love the house. It's great. The house is perfect but it's in a lousy neighborhood and once they move in they find they don't like going to the house or coming from the house. They don't want their kids walking in the neighborhood.

The house is only just one piece of the larger picture. You really need to spend time in the neighborhood, visiting the local stores, going back and forth, driving the commute. That's how you get to know whether the neighborhood is as right for you as the house might be.

SCHAFFLER: Also hard to get to know the right broker. We get inundated in our mailboxes with these real estate notices. How do you know who to call?

GLINK: I think choosing the right broker is probably one of the, again, the top tier of important things that you need to do. Look around at the "For Sale" signs in the neighborhoods in which you're interested. They'll be sort of maybe the two or three top firms that constantly you're going to see the same names over and over again.

You can call those firms and ask who works in those neighborhoods. Start interviewing brokers. You know people think that any broker, they should just pick one off the top of their head or yellow pages and that person will, you know, be happy to work with them.

You should be the one deciding. You're the one with the money. You're bringing it to the party. You have to interview it to make sure you've got a broker who's going to listen to you.

SCHAFFLER: Ilyce, what if I'm stubborn. Can I still buy a house?

GLINK: You know just get in line with everybody else; compromise, compromise. I think that that really is the buzz word here because even though you're able to buy more house than you ever were before, houses are very expensive now and we've seen tremendous appreciation over the last seven years.

So, you're going to have to make some compromises. Only Bill Gates is rich enough to get everything in his house and look he's adding on now. So, even he didn't get everything he wanted the first time.

SCHAFFLER: Great points.

LIN: Oh my gosh Ilyce, we've got another e-mail here from Rebecca Curtis (ph) from St. Pete Beach. She writes: "Right now our house is worth more than we paid for it. We want to sell it and buy another one. If war is declared I'm afraid it will not be worth as much anymore. Should we sell now or wait and see what happens?" That's the bottom line.

GLINK: There's a lot of talk about the whole bubble in real estate and are we going to have a bubble in prices of housing the way that we had it with the stock market? I don't see that happening but what I do see happening is prices leveling out, particularly if there is a war.

Now, if you're in an area that's been hard hit, say Houston, terribly hard hit by Enron, layoffs, or on the West Coast back in the late '80s. They were closing down bases. If you're in an area like that, which is economically hit hard, then home prices may go down because everybody's putting on their houses at the same time.

But if you're one in a neighborhood of 10,000 houses and you're the only one on the market, I don't think you have a whole lot to worry about in terms of price deflation.

LIN: All right, thanks so much Ilyce. Well, I do remember back in the Gulf War, some houses were listed by accident at $100,000 less in the real estate ads and still nobody showed up at the open houses.

SCHAFFLER: Yes, that's amazing.

GLINK: Yes, it was really something.

LIN: Yes, strange market but we'll see what happens. We're going to take more of your calls and e-mails right after this break.

(COMMERCIAL BREAK)

LIN: And welcome back. We are talking with real estate author Ilyce Glink about the housing market and the best ways to sell your house.

Ilyce, we've got another e-mail for you from Troy Christensen (ph), and he writes from Houston, Texas: "My company is transferring me to the Washington, D.C. area next month. I am currently house- hunting and wonder if the war will drive housing prices down in the Northern Virginia area."

Is there a particular market that he should be thinking about because it's the nation's capital?

GLINK: You know D.C. is sort of an interesting area. Nationally I think prices, as I said earlier, are going to remain kind of level or continue to go up slightly depending on where you are.

In Washington, D.C., you've got so many people who work for the government. They're all tied into government pay scales that prices tend to not move up as dramatically as they do in the rest of the country. Now, that's Georgetown aside, which is outrageously expensive and people there are buying two-bedroom apartments for like $700,000.

But in the surrounding suburban areas, prices have tended to just kind of move up very gradually and slowly, again mostly because people work for the government and they're tied to government pay scales.

So, I don't see a lot of price deflation. It wasn't like in Lower Manhattan after September 11, when large quantities of people and businesses sort of exited the island and prices dropped precipitously. We didn't see that in the aftermath even though the Pentagon got hit. So, I think you're probably safe. The prices will continue to appreciate very sort of slowly, moderately.

LIN: All right. We've got a phone call now from Elaine in Adirondack, New York. Elaine, you've got a question about downsizing?

ELAINE: Yes, I do. My husband and I are going to each now -- he's getting ready to retire and we have a very nice home but it's large for just the two of us since the children have left.

Because of the war, though, I'm a little bit -- the possibility of war, excuse me, I'm a little bit concerned. Do I sell now and go ahead with our dreams of having a home in warmer climate and one in the Adirondacks, a small one or do I wait? What do I do?

GLINK: I guess, Elaine, I'd have to ask you when would you sell just in the normal course of things? Would you be putting on your house right now?

ELAINE: Yes.

GLINK: I think that you should talk to some local agents about how homes like yours are selling in your neighborhood and kind of feel them out as to how long the properties are sitting on the market. You know we don't actually have a war. We have a lot of talk about it.

ELAINE: Right.

GLINK: It could all be a big game of chicken. I mean who knows what's really going to happen next week or the week after? So, you don't want to defer your plans forever. I certainly think by the summer if you wanted to put your house on the market and you're worried about, you know, tensions now you could simply wait until June or July when things, you know, kind of calm down a little bit and just try and sell your home in the summer which in the Adirondacks must be a very beautiful time to list your property.

ELAINE: Actually, all seasons are here.

GLINK: You bet they are.

SCHAFFLER: Ilyce, a question for you here and perhaps a clarification because you know our viewers have heard that the economy is uncertain because of this potential conflict with Iraq but we really have to separate housing out because housing has done so well over the past couple of months that perhaps it can withstand a shock a little bit better than other parts of the economy. GLINK: I think that parts of housing are going to be just fine and parts of it aren't. It depends. You know if the war is a long protracted thing, people are going to stay and watch television. They're going to stay home. They're not going to be out looking for homes even with interest rates as low as they are.

The other thing that really drives it are jobs. You know you're starting to get dangerously close all the time now to being at that 400,000 number for jobs, the job loss each week.

And so, when people are unemployed or they're nervous about losing their jobs, they tend to be less certain about spending large amounts of money. They don't really want to trade up their property, increase the size of their mortgages. So, housing has been really a pillar of strength in this economy but it could be slowing down this year and I think we all have to be prepared for that.

LIN: All right, another question on the telephone from Stephanie in Olmsted, Ohio, go ahead Stephanie.

STEPHANIE: Hi. I have a question. We have our house currently on the market and we've been -- we've had the house up for a couple of weeks now. We've gotten a lot of really good activity, very good showings. We got a lot of really good feedback from the realtors who saw our house at the broker's open.

My question is we haven't found a house of our own yet and we're only a couple of weeks in. Due to the situation with whether we're going to war or not going to war and the length of time that it's taking to sell a home, should we have our eye on one in particular already?

GLINK: Well, Stephanie, do you know the neighborhood that you're interested in moving to? Have you identified that neighborhood?

STEPHANIE: We have, yes. The city is in our general location, absolutely yes.

GLINK: OK, so what I would start to do is start to take a look at the open houses in that neighborhood and start to visit them and get a sense of what homes are selling for. I wouldn't be making any fast moves but I would be identifying possible homes. If you're worried -- it sounds like you're getting a lot of activity so for you it's probably just a numbers game.

A certain number of people have to cross your threshold before you're going to get somebody who's making an offer. But when that happens, I'd be ready to go, knowing what's available on the market, knowing how much you can afford to spend, being pre-approved for you home loan by a local mortgage lender, all ready to go on your side so you can move fast when you want to. The worst thing could -- I think would be to carry two homes right now. I'd much prefer to sell, rent, and then buy if you don't think you can time it right.

LIN: All right, thanks so much Stephanie for your call. Ilyce stay right there. We're going to try to squeeze in a couple more calls and e-mails if we've got time after the break but stay right there.

(COMMERCIAL BREAK)

LIN: Well, I hope this new information is going to help our viewers deal with the uncertainties of this housing market. I know it's a really nervous time and I want to thank our CNN Senior Business Correspondent Rhonda Schaffler for flying all the way down here from New York. We love it when you guys come down.

SCHAFFLER: It's great being with you, Carol, a lot of fun.

LIN: And we'll do this again.

SCHAFFLER: OK.

LIN: And we also want to thank author Ilyce Glink. Her book is "50 Simple Steps you can Take to Sell Your Home Faster" for more money in any market, sounds good to me Ilyce, thank you so much for joining us.

GLINK: Sure thing.

LIN: All right, and Anderson Cooper now has more news.

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