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Your Bottom Line

End of Recession May Be in Sight, But What Does That Mean for You and Your Family?; How to Take Advantage of the Depressed Housing Market; How to Collect Unemployment Benefits; How to Save Some Extra Cash

Aired May 09, 2009 - 09:30   ET


POPPY HARLOW, CNN HOST: Welcome to YOUR BOTTOM LINE, the show that saves you money. I'm Poppy Harlow in for Gerri Willis.

The end of the recession may be in sight, but what does that mean for you and for your family? We're talking job security, the value of your home and everything having to do with your money and we'll take a look at how you save every day by making some small changes. YOUR BOTTOM LINE starts right now.

Well, everyone's hoping for a turn around and this week there are some positive signs in the housing market. The National Association of Realtors saying pending home sales rose in March for the second straight month, take a look at the number, up more than three percent from the February reading. And reports some of the hardest hit markets in this country are actually improving. We're seeing this especially in California.

I want you to take a look at this map. Some areas around Los Angeles, also the Bay area, San Francisco, they're getting better, home values and the markets, yeah, they're still falling, but the pace of decline is slowing and that's critical.

You can add two hard hit cities in the southwest to that list, Port St. Lucie, Florida, and in Gainesville, Georgia, prices are actually going up. That's good news.

Let's talk about more of this with some experts who can tell you how to take advantage of this depressed housing market. With us not from Seattle is Amy Bohutinsky with, also "AOL Money" coach Hilary Kramer.

Hilary and Amy, thanks you guys both for being here, appreciate it.

Let's start off with you, Amy, what do these good numbers, some positive indicators in's latest report, what do they tell us, especially in those pending home sales about whether this is a good time for people to maybe jump in the market?

AMY BOHUTINSKY, ZILLOW.COM: Well, I would call this a glimmer of good news in that the pace of declines is slowing in these markets and sales are going up, but it's not enough yet to call a bottom, and we're not actually going to know that in these markets until several months out. A lot is depending on this summer buying season and will buyers come out.

Right now we're seeing a lot of first-time home buyers and investors taking advantage of the lower prices, but we're not seeing the masses of buyers yet, and we got to get through this summer and see if that's really going to bring people back.

HARLOW: And of course, people are cautiously optimistic, big cautions on there.

Hilary, do you think that someone can really time a bottom in their own market?

HILARY KRAMER, AOL MONEY COACH: Well, you can't time the absolute bottom, but what you can do is know your price, know what makes you feel comfortable and never really get pushed into buying. The key is mortgage rates are so low for first-time homebuyers, there are these tax incentives, so it's an incredible opportunity, right now.

HARLOW: Of course, FHA loans more available, as well, that's an incentive for some people.

Amy, what's your forecast at for what is ahead, because people say hey, now may be a relatively cheap time to buy, but are prices going to go down further and are mortgage rates going to get even more attractive?

BOHUTINSKY: Well, it's hard to call on the mortgage rates, but looking forward on home values, we can say that in most markets they are going to decline more. The problem is, as a buyer you can never time it perfectly. Buyers need to say I'm in this for the long-term, I'm buying this home and I'm going to stay in it for the next seven years or more in this market. And if they can do that, it can be a really fantastic time to negotiate with the seller and to take advantage of these low mortgage rates and relatively lower prices compared to a couple of years ago.

HARLOW: Yeah, you know, Hilary, let's stick on that point that Amy brought up, negotiate with the seller, I mean, now may be the best time in decades to do that, right?

KRAMER: Absolutely, negotiations is the key, and that's why I say, again, take your time, do your homework, and always remember, especially for the first-time home buyer, finding a house is like finding a spouse, if you pick the wrong spouse, you're in for insecurity and unhappiness and misery, but you find the right spouse, you have a sense of security, ease and there's incredible happiness. So, you have to remember that with a home, there's two extremes.

HARLOW: And Amy, it's really interesting because this is not a time to flip your home, for example. This is a time that if you're going to buy, be prepared to stay in that home for what, seven to 10 years?

BOHUTINSKY: Absolutely, you know, the mentality of buying a home has changed a lot over the last couple of years. We are a transient society, we're used to buying every couple of years and moving on. That's not the case anymore. Buyers should stay in their homes seven or more years, I'm saying, right now, in this market. A lot of markets will decline a little bit more, we're not sure exactly where these bottoms will be, but you have in it for the long-term, you're in it for a good reason and you should have a good deal out of this.

HARLOW: Hilary, when we're looking at first time homebuyers, because there are people now that may have thought just six months ago or a year ago, I could never afford to buy a home, but now they think they can. What's your word of caution to them? What's your advice to them?

KRAMER: OK, what you want to do is when you look at that house, keep in mind the cost of upgrades because those home equity loans, they're not as readily available, they're not just tacking them on when you get your mortgage. So, you might think it's nothing to add a new kitchen or add a new bathroom, but add on in your mind if it needs that kind of work, $100,000.

Also make sure you look at the educational systems, crime rates, oh, taxes. Taxes can vary so, so much from city to city, town to town, so take a look at that, because that could really influence the value of your home, you might think you're getting a good deal, but you might pay 30,000 a year in taxes in one town or another it could be $5,000.

HARLOW: You have to look at the whole picture. And part of that, Amy, isn't that looking at foreclosures and the amount of people in your neighborhood that are under water. I know a recent report, the latest one, showed that 1/5 of homeowners are under water on their mortgage, how should other home buyers in the area feel about that? How cautious should they be knowing that?

BOHUTINSKY: Well, certainly buyers are in the driver's seat, right now. And all of these tips that Hilary mentioned, buyers have the time to do this research and really look home to home to home. Any market where there are a lot of foreclosures is going to drive prices down even further, there's going to be distressed properties at even more of a discount you can look at.

So, you can take your time, you can work with your lender, you can work with your real estate agent and figure out all of these different things you want to compare, figure out how much you want to negotiate and take the time to do it. And I think makes buyers in a really good position.

HARLOW: You know, Hilary, let's end on this, because predatory lending, there's such a spotlight on that right now. But it still exists in some pockets of this country. What should people be aware of when they do decide to buy a home and they're looking to finance that?

KRAMER: What you want to do is shop around. That's the beauty of the Internet, because you can use the Internet to look at different prices. Also, your broker can be a very big help in trying to make sure you secure a mortgage that fits your needs and isn't predatory in nature.

So, again it comes back to not rushing, taking your time and looking at the rates, but also understanding, mortgage rates probably will rise, but that will bring prices of homes down.

HARLOW: Right. Patience is a virtue, right? Big lesson learned. Thank you both. Thank you Amy, thank you Hilary, appreciate it.

And if you've lost your job, you know it can be difficult to navigate your unemployment benefits. Coming up, how to cut through the red tape and get what you deserve.


HARLOW: Unemployment in this country, a big issue, so many folks out there looking for work right now, our Gerri Willis visited one community in her hometown in the North Carolina mountains and sat down with one family especially hard hit to see what they're doing to turn their life around.


KEITH MURDOCH, LAID OFF WORKER: My job searches filled out about three pages already.

GERRI WILLIS, CNN CORRESPONDENT (voice-over): Like most parents, Vickie and Keith Murdock worry about providing for their family. Keith is unemployed following his second layoff in eight years.

K. MURDOCH: Everybody you talk to, well, we're not hiring, we ain't got nothing open right now.

WILLIS: Vickie and Keith met at a textile mill nearly 20 years ago in tiny Spruce Pine, North Carolina, but Keith was laid off when the mill closed in 2001. And Vickie lost another job in 2006 when furniture maker Ethan Allen closed its plant, here. Their situation is not unusual in this area.

(on camera): Looks like lentils maybe.

UNIDENTIFIED MALE: You got salad dressing...

WILLIS: Oranges, canned fruit.

(voice-over): Workers at the Shepherd Staff Food Pantry say they are seeing three times as many clients as they did this time last year.

UNIDENTIFIED MALE: Right now, I would say we're barely keeping up.

WILLIS: The community has lost more than 2,000 jobs in the last six years, major industries, textiles, mining, furniture have left the area. But residents are hoping new business will help. A growing crafts and tourism industry is adding jobs and the town is hoping to attract retirees looking for second homes.

Vickie and Keith both did the right thing, Keith went back to school and trained for as job as an auto body mechanic. Vickie retrained too. She'll graduate as a certified medical assistant in May. But retrain doesn't necessarily guarantee long-term employment.

K. MURDOCH: I heard of a place coming in and (INAUDIBLE) and I got a job with them and I loved it. And then here just recently, I got laid off in January.

WILLIS: In the meantime, Keith and Vickie keep their spirits up.

VICKIE MURDOCH, DEALING WITH UNEMPLOYMENT: When we get to worrying how are we going to pay for this it's like the Lord makes a way.

WILLIS: They're hopeful that they'll find new jobs soon and keep their family afloat.


HARLOW: Well, collecting unemployment benefits is something that so many Americans unfortunately know all too well, whether it's, extending or knowing what your rights are. Our next guest is here to help you thought that whole process. Her name is Robin Bond, she's an attorney is an employment attorney coming to us today from Philadelphia.

Robin, thanks for being here.


HARLOW: You know, first things first, if you lose your job, because so many people are going through this right now, Robin, how do you know if you're eligible for unemployment?

BOND: Well, there's three main things that you need to do to be eligible for employment. First you have to have been unemployed and lost your job through no fault of your own. That means if you're an independent contractor, you don't qualify.

Now, when I say lost your job through no fault of your own, that means if you are reduced in force, down sized, right sized, laid off, somehow the victim of the economic conditions of your employer, you're eligible for unemployment compensation. Similarly if your boss says you didn't perform your job well, you're also eligible for unemployment compensation. And the final thing is you have to be available and ready to work. So, if you decide to take a month off and hike the Appalachian trail, you're not available to get work, that means you can't get unemployment compensation.

HARLOW: You know, and of course if you're fired, that is -- you're not going to be eligible, either. But the big question out there is how much do you know you can collect? That's a big question when people get laid off. BOND: Right, and you can collect, generally at the state level 26 weeks and then the federal government has supplemented that up to another 33 weeks with federally paid for emergency unemployment compensation benefits simply because of the situation that Keith and Vickie and millions of other Americans are now experiencing.

HARLOW: Robin, what are the must-haves when you go stand in that unemployment line, what do you need to bring?

BOND: Well, if you're going to show up in person, obviously bring a photo I.D. If you're going to show up in person, as well as do it online, and I'm usually recommending to people that they do it online because there's so many people trying to get into U.C. offices today -- have your Social Security number, your address where you live and where you want the check to go, your phone number where they can contact you with questions, the names and addresses of your past employers over the last 18 months because this is the time period that U.C. looks at in determining what your benefits will be.

HARLOW: All right, Robin, if you're unemployed and you apply and you're rejected for those unemployment benefits, what are your rights? Can you repeal that decision?

BOND: Yes, you certainly can. If you are rejected, ask for a hearing, there's a check mark on the form and you request a hearing. Then you go in front of a hearing officer and state your case. If you lose there, there on appeal right to the whole board of Unemployment Compensation Review. If you lose there, appeal into the state court. There are many levels of appeal.

HARLOW: All right, Robin, I know you say it's very important to file right away, right when you get laid off. Why is that?

BOND: Yeah, my main tips here, file right away, because even if you're not sure the boss is going to say I fired you, you're still going to ask for unemployment anyway, just ask for it. Because once you let the time pass, you can't get unemployments for the weeks where you didn't put a file in.

HARLOW: So, you want to do that the day after you get laid off so you get all the 26 weeks that you're entitled to, right?

BOND: Yes, to get all the time that you're entitled to, plus it could be a two to three week lag in getting any money and you don't want to delay.

HARLOW: No, you don't Robin, thanks so much, appreciate it.

BOND: Thank you.

HARLOW: All right, well, are you struggling to stay within your budget, just barely paying the bills? Grab a pen and paper right now, we're going to show you how small every day challenge changes can equal big savings, that's ahead.

(COMMERCIAL BREAK) HARLOW: Chances are you and your family are looking for any way to save some extra cash these days. Kimberly Kleman is the editor in chief of "Consumer Reports." She's got some creative solutions for saving on everything from travel to groceries.

Kimberly, thanks for being here.


HARLOW: Just fascinated reading the latest report on this from "Consumer Reports," how you can save a little bit on your monthly bills. And it all comes down to a little bit of negotiation, right?

KLEMAN: That's right. That's probably the biggest thing that our readers and staffers told us when we asked them how are you saving your nickels and dimes? Whatever you're buying, whatever service you're negotiating, you should always ask for a lower rate. How can you come down on the price, and more often than not you'll get a lower price. So, that's a huge tip.

HARLOW: So, if your cell phone is too high, you can call one of the providers and try and work something out?

KLEMAN: Right, cell phone, cable, Internet. There's a Web site that we recommend called You can give them your credit card information, you know, how much you're paying, whether you want cash back or other rewards. You can give them your cell phone information, and they can help you choose perhaps a better card or a better service that will save you money. So, that was an interesting tip we got.

HARLOW: Of course, you want to be careful and not give them too much of your private information like your Social security number, that's a caution. Let's move on here and talk about being in stores. Can you really negotiate with a store clerk?

KLEMAN: What you have to do in stores, in the supermarket, let's say, is always look at the unit price. A lot of people think if they buy the big, economy size, they're definitely going to save money. And that is not always the case with things like tuna fish or ketchup, you're actually often paying more for the bigger size than the smaller size. So, in a supermarket, you might not be able to negotiate, but in a department store, and in an appliance store, always ask for a better price, even if it's not on sale.

HARLOW: You know what's so interesting, is you can save a lot of money by what you do at home, cleaning your house. You can do that a little more cheaply on your own, obviously, from having a cleaning person come in and help out, but you can also make your own cleaning solutions?

KLEMAN: That's absolutely right. If you have woods floors, let's say, you can use vinegar and water instead of a pricey floor cleaner. In your bathrooms, you know, use bleach instead of a tub cleaner or a toilet cleaner. Or vinegar and baking soda also work instead of, let's say, Comet or Ajax. When you're in the shower, some of our readers said, lather and rinse, but don't necessarily repeat. Your hair will get clean and your shampoo will go twice as far. Or if you're -- if your garment says dry clean recommended, you can often wash that garment by hand instead of taking it to the dry cleaner.

HARLOW: I will tell you from personal experience, you can indeed wash the garment by hand. And they always tell you on the shampoo bottle use a generous amount, but you don't really need it. All right, let's move on to vacations. If you want to stay on a budget, but you want to take your family on a trip, what's your advice?

KLEMAN: Some of our readers said that you should really look in to renting an apartment during your vacation and not staying in a hotel, because it'll be cheaper for you. So, I thought that was a pretty interesting one.

HARLOW: And what's also great about that, too, is if you rent an apartment with a kitchen, you can cook some of the meals, so you're saving on going out as well, right?

KLEMAN: That's absolutely right. Another reader wrote in that there is a Web site where you can rent a rustic cabin or a campsite in America, overlooking some beautiful, beautiful beaches and oceans and stuff for $25 a pop, so $25 a night. So, that's another money saver. Also if you're going on vacation, make sure you look at airfares, let's say, a few days before you want to travel and a few days after, you could save yourself hundreds of dollars if you can be flexible in your flight.

HARLOW: Being flexible is key. Kimberly, thank you so much. I appreciate it.

And renovating your bathroom or your kitchen can really help bump up the value of your home. We're going to show you how to do just that, making the most of your money.


HARLOW: Whether it's leaking, cracking or just plain old, when it comes to your appliances, everything's bound to break at some point, the question is do you repair or should you replace the culprit? Gerri Willis spoke to Deb Snoonian from "This Old House."


WILLIS: I love this because we're going to talk to lots of things in your house, when do you replace it, when do you fix it. Leaky windows are a big problem for so many people and if you didn't lose a lot of money out of your windows, you're very lucky this year. When do I get rid of the windows?

DEB SNOONIAN, THIS OLD HOUSE: Right, well, you know, overall windows are a really great opportunity for repair/replace, because 40 percent of your heating and cooling cost is lost through these inefficient windows. WILLIS: But Deb, they're expensive.

SNOONIAN: They're very expensive. Here's when to repair them. If you have old wood windows, with wooden frames and sashes, they're going last forever. So, you repair them by caulking, adding weather stripping, fixing the sash, they really last a long time. But you should replace windows with metal frames that are really corroded or vinyl windows that are faded and kind of warped and don't close correctly. You'll know them when you see them.

WILLIS: Vinyl can be a problem.

SNOONIAN: Also, keep in mind the stimulus package offers a tax credit for replacing your windows of up to $1,500, you can go to and get more information about that.

WILLIS: That's a great idea. Because we're getting a little help from the federal government, here. When it comes to toilets, though, now this is not expensive. This is an expensive upgrade and you can actually save water. Tell us how we do that.

SNOONIAN: Well, you're toilet; we call them water guzzlers because they use 30 percent of the water in your home.

WILLIS: Ridiculous.

SNOONIAN: If you have a really old toilet it can use up to seven gallons of water every time you flush. But, if you like the way it looks, if it fits in with your other fixtures, you can hang on to it, just by a universal repair kit for about 20 bucks at the home store and it will bring down your water usage.

But if you have a dated, sort of not good dated toilet -- kind of a -- and it's not matching everything else or if the bowl is cracked or if the tank is cracked, you definitely have to replace it, a couple hundred bucks or more. You can also check with your local water utility, some of them offer rebates for buying a more high efficiency toilet that uses less water.

WILLIS: We also talked about water heaters, which I think is so important, because you really can save a lot of money by upgrading your water heater, but it's not cheap.

SNOONIAN: Definitely. A new water heater's going to run you about $1,000, about $2,500 actually for a tankless model, but in fact, if your water heater is more than 10 years old, replacing it will pay yourself back really quickly. So, that's what we recommend that you do, unless you can repair it if it's a fix you can make yourself or if it's still under warranty.

And, you can make an old water heater more efficient by wrapping it in an insulating blanket. An here's where another -- more tax credits available here thought the stimulus package. So, that's something that you can get money back and saving money in the long-run by replacing.

WILLIS: You know, one thing I never think about is rain gutters. And they do kind of wear down over time.

SNOONIAN: They do, they get rusty, they look a little dingy. If you happen to be lucky enough to have copper gutters, they look fantastic, you can patch and repair those yourself, and you should do that because they can last about 70 years.

But, if you have steel gutters with a lot of holes in them, we really recommend replacing them. It's going to cost on average for the average house about $750, but here's what it will prevent, a flood in your house. If you have corroded gutters, the water pools around the foundation, it's going to get inside -- $750 to replace that is a lot less expensive than fixing that nasty flood that is, you know, a very unpleasant experience and I do speak from experience on this one.

WILLIS: Uh-oh, that's one you know personally. OK.

SNOONIAN: Yeah, we won't talk about that here.

WILLIS: Well, you know, we've all had our experiences but this has been very helpful information for people out there who want to know how much to spend and how get it fixed. Deb Snoonian, thank you so much.

SNOONIAN: Thank you.


HARLOW: Those are great tips.

Well, thank you, folks, for spending part of your Saturday with us. Gerri Willis will be back here next week on CNN, you can catch her on HLN every Saturday and Sunday at 3:30 p.m. Eastern Time and you can hear much more about the impact of this week's news on your finances on your finances on "YOUR MONEY" with Christine Romans and Ali Velshi, that's Saturdays at 1:00 p.m. Eastern and Sundays at 3:00 p.m., right here on CNN.

Don't go anywhere, your top stories are next in the CNN NEWSROOM. Have a great weekend.