A pleasure, gerri. Gerri why do you do this study . Most people dont do the study this way. This is the question i have. If i buy a house with these basic parameters what will it cost you market by market . Why do you do the study . Weve done it many years. As you suggested it is all location. But we hear so much on National Level on averages and median prices but as we move through the housing recovery we find real estate becomes local and hyperlocal. At end of the day people want to know what will it cost me to buy a home in one location versus the other. We look in over 2000 markets and zeroed in on a four bedroom, two bath home. It is aspiration hal home an comparing to your point, apples apples across the country. Gerri when you dig into the numbers it es super interesting. California is a real rock star on this list and Silicon Valley really. No question. California has always been high on the list. This year nine out of top 10 most expensive markets. But to your point it shifted from Southern California over the years north to northern california. Silicon valley, tech boom is where so much wealth is being created. Gerri los altos, newport beach, saratoga, redwood city, woodside. Los gatos. 1. 9 million to typical four bedroom, two bath home. Gerri flip side, most affordable what are we looking at . Most affordable, second year in a row, cleveland ohio. You can go into the suburbs and find Beautiful Homes upward in the millions. Clearly one of most affordable markets and going through somewhat of a revival. Riverdale, georgia, park forest, illinois, lake wales, florida. All over the map. More diverse. Gerri interesting full screen how much would the los altos house by buy you somewhere else. The house was 1. 9 million. 1. 96 million. Give you indication you could buy 30 homes in cleveland for one home in the Silicon Valley. Gerri one of my Favorite Places charlotte, North Carolina, you could get nine. Chicago eight, miami, five. That is interesting a difference i wouldnt have expected. Seattle as well here. I was asking during the break. You see this firsthand. Were following the Real Estate Market so closely. Not because people as to own their own home and also it means so much for the broader economist. How is the Housing Market right now . Is it improving . The Housing Market is doing well. Were in the third year of recovery. The last two years we had both rapid growth in unit sales and prices because we were moving from overcorrection. Were coming back at rapid pace. Weve seen prices started to trend. Theyre going up but at slower pace and argue more healthy and sustainable pace. This is where were moving back towards the Traditional Market where exactly we need to be for the future. Gerri story this week saying that zero mortgage rules, stablizing mortgage rates, giving like a little boost to the Housing Market. Do you see that . We aim for firsttime buyers. A lot of uncertainty in terms of lending environment, particularly comes to regulations on qualified mortgages. Qualified Residential Mortgages and so we just had some important decisions. Down payment within the last, probably two to three weeks, no longer is it 20 . It is backs down to more manageable level. This is exactly the kind of Common Sense Solutions that we need in order to get us going, even further in the future. Gerri housing will help. Retailers, it will help people that make furniture carpet. It reverberates, goes through the economy. Such a big kick, once house something going. It will be interesting to see if it takes off to get beyond originally what we saw investors getting in. That only went so far. Investors moving out. We have traditional buyers moving back where we need to go into the future. Gerri yate to see you. Great to see you, thank you. Gerri for an update to a story we brought you in october, more americans will soon be able to to buy a home with just a 3 down payment. The new lending standards are being put in place by fannie mae and freddie mac. Theyre designed to help more lowincome an firsttime buyers afford homes in the wake of the 2008 financial crisis. Borrowers still must have enough income to repay loans on a monthly basis. But this could be the start of the same problem we had leading into the recession. People buying homes they cant afford. Well see. Still a lot more to come during this special hour. Tips on winterizing your home before the end of the year. There is a dangerous compac in the housing industry. Inflated home appraisals are back and they worry regulators. What you need to look for coming up. They are a glowing example of what it means to be the best. And at this special time of year, they shine even brighter. Come to the winter event and get the mercedesbenz youve always wished for, now for an exceptional price. [ho, ho, ho, ho] lease the 2014 cla 250 for 329 a month at your local mercedesbenz dealer. Gerri welcome back to the willis report, our hour of housing help. What is going on with appraisers . You know part of the process is getting appraisal of home and finding out how much it should be worth. Were seeing old ghost from previous days, appraisers overvaluing houses. I sat down with vera gibson and i asked her why. Sales are down. Price appreciation is slowing. Were not seeing baines over past couple years. So everybody need to make money. Loan originations are down. Average number of mortgages are down. Lenders need to make money. Appraisers need to make money. Brokers need to make money. Everyone is feeling heat. Gerri this greased the wheels of industry. Appraisers have it in their hand. If, what happens if they appraise too high, right . Gerri right. I was going to say, between 2011 and 2014, one in seven appraisals were inflated by at least 20 . Now this helps the seller but for the buyer, vera, what does it mean . Yeah. I mean the buyer need to do your own homework. Not uncommon to actually present the appraiser with your own comps. Run the numbers and check what is going on. Use a site like zillow which i blog for. Present them with your own information. Some of these apracers are not all that great actually. Weve seen decline in number of appraisers going into the industry ever since the Appraisal Management Companies took over. It is a whole new landscape. These are not as skilled as necessarily they have been in the past. Some really good guys, residential appraisers left the industry all together or moved into more lucrative fields in the industry. The industry has definitely changed. Gerri important thing for consumers to know about. Veer remarks thanks for coming on the show. Thanks, gerri. Gerri later on the show, advice what you need to do if youre living in an overvalued Housing Market and how to make money off the expensive areas. Were fully into the Christmas Season and temperatures are dropping. Well tell you how to properly winterize your home. Im angela, and i quit smoking with chantix. People who know me, they say i never thought you would quit. but chantix helped me do it. Along with support, Chantix Varenicline is proven to help people quit smoking. It gave me the power to overcome the urge to smoke. Some people had changes in behavior, thinking or mood, hostility, agitation, depressed mood and suicidal thoughts or actions while taking or after stopping chantix. Some people had seizures while taking chantix. If you have any of these, stop chantix and call your doctor right away. Tell your doctor about any history of Mental Health problems, which could get rse while taking chantix or story of seizures. 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Gerri low temperatures bring hightech new technology to your house making it easier to keep your house warm but the energy bills low. We have tom host of the money pit. Great to have you hire. Look, i have to tell you i spent ten years on our house, not that long, trying to winter proof it, weatherize it and you can really save a lot of money. Yeah. Gerri give people an idea how much they can save by closings that house in . Well you say close it in, there are always places can tighten it up. There are different components to take meaningful action. For example, the thermostat, for years get a programmable thermostat. Set two temperatures when youre home and one not at home. We stepped it up with the wifi thermostats. They have capability gerri like nest. Like nest. Gerri we had problems with nest. I had problems with nest 2 1 2 years. I absolutely love it. I love of the fact it knows when were home and knows when were gone. It does a scan. When were not home brings the heat down. Were not on nine to five schedules. Gerri that is true. That is huge capability. Gerri we had trouble working it in our house. Aging systems can be difficult. What about ducks. Most ducts have 4 leakage. Gerri 40, four, zero . Yes. How do we seal ducts with duct tape. Duct tape was not designed for ducts. Never will be. The adhesive heats up and dries out there. Is better system called arrow seal. You play a polymer inside of ducts and finds holes and seals them up to 3 8 of an inch gap. Gerri can do it yourself. Noings that has to be done by a professional. Gerri talk about insuelation. Yeah. Gerri that oldfashioned pink thing you roll out. You dont have to do that. No, you dont. Best insulation is spray form insulation. When you spray it can expand. It expands 100 times its thickness. Space it and fills up and insulates an seals at the same time. That is huge. We did that in our house this past spring. My airconditioning bill was 50 what it was the year before. 50 . Gerri half off. Not to mention increase in comfort. Really good stuff. Gerri weve done the same thing. Made a huge difference. Keep doing that. The walls, floors. You have to have the opportunity n our case the house was put a new roof on. The attic was accessible. You cant tear walls down but do it a little at a time. Gerri windows are leak culprit. Winterizing your windows is very straightforward thing. I use latex caulk, acrylic latex caulk and out side of and inside. A lot of folks skip inside winterization. If you caulk the molding between window and wall, you cut down on drafts. You can use a weather stripping caulk looks like clear silicone caulk. Except in the spring you can peel it off to open your window again. Gerri talked to us about nest. You will have passive solar panels put on your house. Are you optimistic you can go off the grid . I was talking about perhaps adding active solar panels to the roof. I think yes, there are systems today where you can generate so much electricity your bills go down. Gerri even in the northeast here. Yes, absolutely. It is entirely possible. It is happening now. You mentioned passive solar energy. A Company Called inertia is constructing homes using almost zero additional amount of heat. Double shell design. Kind of like a physical heat pump where the heat circulates through the house of the goes back to the either to be reheated or recooled and continues cycle. Gerri wow, that is interesting. Thanks for coming on the show. Great to see you, thank you. My pleasure. Gerri coming up next, is buying a rental property a good investment . Well, depend where youre looking. Well explain. Is housing on the way to becoming a bubble . Prices are skyrocketing but my next guest says there are some areas that are overvalued. Details coming after the break. John investing in real estate is not for faint of heart. Fox businesss Cheryl Casone has markets you should be buying. She has great insight into this because she has done it herself. I didnt quite do it myself. I found data and i will relay it to you. This comes from realtytrac. Third quarter, rental Property Income report. So what they do, do it every quarter. Kind of cool. Take average amount of prices out there,1 of the population, that they cover, basically with all these, more than 500 counties. They compare that to the prices. What they found over the last year, is that prices actually, for like a three bedroom home, they compare, prices actually went up 7 yearoveryear. What does this mean . It is bad if youre wanting to buy a house to be a landlord or to rent. Now there is some good news in all of this. I want to press everybody. There are good markets where you can make doubledigit returns. First take a look at this. Rocky mountain, North Carolina. Gerri yeah, North Carolina. I was in North Carolina over the weekend. Beautiful state. Guess what . Buy property in the state. Parts of it. 41 Annualized Rental income returns. That is after you buy the house you make 41 returns on the house. Gerri can i ask you a question. Rocky mountain is far away from here in new york city. Would you buy property far away to invest in . Is that a good thing to do . Well i personally believe that to be out of town landlord has to be tricky business. You have to hire a property manage mare. You have to know an area. I wouldnt tell anybody to go into area they dont know to buy a property to use as rental income. Vacation home is another story. The other areas, like Atlanta Metro area is great place. Kokomo, indiana. Palatka, florida, 22 . Detroit, michigan, 20 . Also, tampa st. Pete came in top 10. I was there a couple weeks ago representing our wonderful network. Tough say that it depend where you look. Think about this though, detroit. Think of all those canadians that went down into detroit, instead of buying up hopes especially in the middle of the housing security . Burst. They are laughing all the way to bank. Canadians in particular. Look at cash money that came into this country over last five years, the canadians led the list. Gerri theyre smart. Theyre smart those canadians. Yeah. Gerri are there places you should not go or avoid . Absolutely. Look at heat map, comes from rael at this track, across the country, red, bad, no, do not try to buy a home right now. Gerri california, uhuh. Mostly look along the coast of california. You see the lovely new york, boston. Think of boston, philadelphia, parts of texas are rough right now. That is the hill country in texas as you can see on the map. Even as you go up towards canada, on the western side you can see some rough spots. Really have to know the numbers and crunch the numbers. All about price, versus what you can think of, what you think you will get for rent in that city. Funny, david asman said earlier, oh, new york city. I said absolutely not new york city. That is the worst place to try to buy a rental property to make a little cash. I got friend trying to buy stuff in brooklyn. Forget it. They cant touch what they want to buy to rent. Gerri another way new york is different. Cheryl, good to see. You bet, thank you, gerri. Gerri if you want to go from renter to buyer watch out. A new report is reporting that some Housing Markets are way, way overvalued. Are we heading toward another bubble . What should you do if youre in the overvalued areas. We have chief economist for trulia. What are the markets so overvalued . There are some markets across the country that look 10 or more overvalued. When we say overvalued, this is compared to fundamentals, compared to where we would expect prices to be based on things like incomes and rent. They tend to be in texas and in california. Austin, los angeles, some of the overvalued markets. Gerri l. A. , orange county, San Francisco, riverside, san bernardino. What happened to these markets . These did pretty well during the bubble, right, when prices were going up. Do they fall so dramatically that investors came back in again. The most overvalued markets are including two very different kind of Housing Markets. On one hand you have the california markets. Huge housing bubble, big bust. Now a pretty strong recovery. A bounceback in prices outpaced increases in incomes. The texas markets are very different story. Texas had a very mild housing bubble and very mild bust. Their bigs ups and downs were back in the 80s. Price increases in texas are not prices that fell much after the bubble burst. Gerri they are on fire for some time. Im seen that myself. So, you lived there, the prices are going up, up, up. Maybe youre locked into a house and you would like to trade up. What is the best thing to do . First is, not to panic. This is not 2006 all over again. In 2006 prices nationally looked more than 30 overvalued and more than 5 in many markets. So today, even 10 or 15 overvalued is not 2006 all over again. But it is a reminder that housing prices go up but they can also go down in places that are overvalued are at greater risk for a correction. So, in these overvalued markets you cant count on housing being a great investment by itself. You have to really want to live in the place that youre going to buy. Gerri got to tell you. We all learned that the hard way, right . Say you want to be buyer in overvalued market, what would you recommend people do right now . The first thing if youre buying in overvalued market, have a long time horizon. For someone looking to buy, only for a short period of time, theyre at greater risk if prices turn down. Over a longer period of time, places tend to recover. And the ups are more likely to balance out the downs over the long term if youre looking to move to one of the overvalued markets for a time, renting might be a smart. Gerri undervalueded markets where do we find those . Most markets are undervalued. Nationally, prices are 3 undervalued. Most of all in the midwest and some new england metros. Interesting you say. That we were talking about detroit. There it is on this list. Some markets, jed, i dot to think, are they ever really growing to come back that strong . They have lower employment bases, lots of economic problems. What do you think . Well, some of these undervalued markets look undervalued even relative to themselves a few years ago. So these undervalued markets in the midwest had economic challenges for a long time. But even compared to just the past 10 or 20 years. Prices in the markets look lower. Im not saying prices will get up to boston, new york, San Francisco levels. Prices in detroit look low. Relative to what is normal for detroit. Gerri thank you. Great stuff. Thanks, gerry. Well, selfemployed always face challenges getting a mortgage but according to a new report from zillow, this Broking Group of borrowers face an uphill battle just getting a loan quote. Here with what you need to know, rick sharga, Senior Vice President of option. Com. Rick, good to see you. Why are these folks having such a hard time even getting a loan quote . The lending industry is haunted by bad loans from christmases past. They had liar loans and ninja loans, no job, no income and no assets. People falsified their financias where with all in order to get loans they shouldnt have qualified for. Gerri rick, are some people being cut off when they shouldnt be . Ohs absolutely. Were seeing that with conventional loans, gerri. You and i talked about that before. With stated income i borrower tt is much more difficult because theyre starting from a position of disadvantage that they have a hard time documenting and making, making it very obvious what their income really is. Gerri did reforms like doddfrank and other reforms make it even more difficult for these folks to get loans . Absolutely. Great point. The National Association of realtors just put out a report that showed less than 5 of the loans made in the last quarter were nonqm loans. Kind of loans that doddfrank really institutionalized. The abilityso to repay rule whih all the lenders really need to adhere too requires a certain little of documentation. That puts selfemployed, stated income borrowers at very significant disadvantage when it comes to even getting a loan quote. Gerri all right. One of the things i think that a is interesting about this the fact that they have difficulty the showing an employer but tel us about that . A lot of this simply comes down to documentation. You need to be able to prove definitely that the borrower has financial wherewithal to make payments on a loan. Absence of documentation is big issue. Sometimes there are also job related issues. Hard for selfemployed people to sometimes credibly prove they have been in a profession. They have been steadily employed for a significant. Selfemployed tend to have lower credit scores. For. Probably for businessrelated reasons. Gerri theyre putting their personal money and Company Money together, right . Yes. Gerri that creates a lot of issues. What is the advice to people that want a loan, need a loan but cant get it . T. There are two basic concepts. You have to prove youre a low risk borrower so that the lender is not afraid to get loan pushed back to them if things go wrong. The other this is good place to get a little bit of help. On first of those, make sure the fico score is as good as you can get it. Make sure the credit score lookt good. Point to assets as that you put together with the loan. That mitigates risk for lender. On getting help, this is good ways to work with local Mortgage Broker. A lot of traditional banks are not making these loans. A lot come from nonbank lenders a good Mortgage Broker is knowing who will make those types of loans and which ones you will most likely qualify yor for. The other if youre doing business for yourself, youre doing business with a bank. Talk to the bank. Theyre a Current Customer they are more apartment to consider loan youre look looking for. Gerri because they see all the finances you have. Thats a great idea, rick. S, 30 30 year fixedrate 3. 89 . That below 4 . Rea that is luscious. I love real estate. Now is a good time. Its a great time. Thanks for coming on the show. Anytime, gerri. When we come back, advice to the selfemployed. Well tell you the best ways to go about getting a mortgage despite not having paperwork banks may be looking for. Stay with us. Its more than the driver. Its more than the car. For lotus f1 team, the Competitive Edge is the cloud. Powered by microsoft dynamics, azure, and office 365, the team can gain Real Time Insights and instantly share information around the globe. When every millisecond counts, staying competitive begins with the cloud. This is the microsoft cloud. Gerri from the selfemployed to the retired at one point or another many retirees consider downsizing relocating or renovating their home but these real estate decisions, well they open you up to big mistakes. Here with how to avoid making one, larry luxembourg, a partner at lexington Avenue Capital management. Welcome to the show, so good to have you here. What do you think is the most common mistake that folks who once had ideal second home make as theyre retiring . I think one the biggest things, people get too emotional and they dont look at the big picture. They dont look at their total life in retirement. They also dont consider the financial aspects. It is part of their overall financial situation. Gerri i think one people dont do, think about the carrying cost of second home. They are sure priced even though they have a first home. People forget the travel to the house. Up keep when youre not there. It can be more expensive taking care of a second home than the first home. Everything about a house coulds more than you expect. That is something people often forget. Gerri lets talk about snowbird, picking and choosing, trying todownsize. If youre trying to get a smaller home, what do you want to avoid . What are the mistakes you want to make sure you doesnt make . One of the big things, mistakes snowbird make, particularly somebody from the new york area or maybe northern california, theyre selling an expensive house and they have a lot of money extra after they buy a house in retirement area. They have to invest that money carefully. Or it can vanish very quickly with no trace. Gerri yeah, if you get a little pot of cash and you dont take care of it right away, no doubt it will go to things you dont intend it to. Even bigger problem for people right now, about a third of homeowners 65 and older, they have a mortgage. Thats is up from 22 in 2001. This is not the ideal situation to be in. What should you do if youre at that age and youre still paying off your house . Well you want to pay the mortgage down fast, if you can. And you may have to consider relocating. Downsidessing sooner, anything you can do. You definitely dont want to carry that debt into retirement. Gerri dont want to carry the debt into retirement but happening more and more people. Especially because of what happened in 2007, 2008, 2009, people were forced to sort of stay in houses maybe they didnt want to. Give us an idea because youre an expert in this, you know all about this Real Estate Market. What are the trend that people who are retiring and trying to go to an area that might be more attractive, what do they need to know about . Well they need to think about their situation because once you do sell your house and buy another house youre really locked in. You want to be careful. You dont want to be panicked. Dont want to be too emotional. Do your research. Make sure you really want to go into the area. Make sure it has all the services you want. Try it out and then only then, jump in and make a purchase. Larry, thank you so much for coming on the show tonight. A pleasure to be have you here. Thanks so much. Gerri still to come, the willis report hour of housing help continues with a look at buying a second home. What you need to know about lenders and mortgage rates. Well have advice from keeping your property insurance from skyrocketing after a simple claim. Moneysaving tips coming up. Heres a question for you when electricity is generated with natural gas instead of todays most used source, how much are co2 emissions reduced . Up to 30 . 45 . 60 . The answer is. Up to 60 less. And thats a big reason why the u. S. Is a world leader in reducing co2 emissions. Take the energy quiz round 2. Energy lives here. Gerri if youre a homeowner youre going to want to do some serious thinking before filing any Insurance Claim at the end of the day it could cost you a whole lot more down the road. Here to explain is insurance quotes. Com Senior Analyst laura adams. Welcome. Most homeowners know if you make a claim on your Homeowner Insurance they will raise your premiums at some point but you have some interesting detail how it doesnt really matter what youre making the claim for, you will pay at any rate. Tell us what you found in your survey . Yes, the recent insurance quotes. Com survey found really interesting information. Were seeing rates increase on average across the United States 9 . But this really scaries depending where you live. States like wyoming where rates are increasing over 30 for just one claim. All right. So what were talking about on average is 9 increase in monthly premiums for any kind of filing. And yet youve got even more detail on this you can break it down in terms of the type of claim, the ones that really hurt. Explain. Right. So liability claims are costing the most. On average theyre costing about 14 and this is because we typically have a lot of liability coverage. Below that were seeing fire claims. Gerri let me stop you there. Let me stop you there because i just want to explain liability. Lets say somebodies hut on your property they want money from you and they file a liability claim and that is what that means. Exactly. So youre involved in a lawsuit. Gerri right, thank you. So you say fire is the next biggest, right . Fire is a very expensive claim. So we are seeing that really costing consumers. Were seeing things like theft, vandalism. Those are all really expensive claims to be making. There is also water and hail. People making claims for lots of different kind of things. What is your advice to consumers out there . I mean youre buying insurance for a reason because you want to use it, right . Thats right. And in a Perfect World every claim would be something we would recommend thaw file but actually consumers need to really be careful. You heard the saying, dont sweat the small stuff . My advice is, dont claim the small stuff. Really be careful about what youre claiming. For consumers to save money we want to that about raising your deductible. Having a larger deductible means you pay more outofpocket but that could help you from filing small claims that could cost you in the long run. Gerri one thank you said is really smart, dont use Homeowners Insurance as maintenance tool. Some people do. That they dont want to pay for up keep. You say dont do that. Also say shop around. So get other quotes from other companies . Absolutely. If consumers are knot looking at market on at least an annual basis to find out what is going on with rates, theyre really leaving money on the table. Rates are changing all the tie. So savvy consumers will be shopping on a regular basis. Use a site like insurance quotes. Com. Get free quotes. Look at everything that is available to you. Then you can make a wise decision, based on what youre finding, see if youre overpaying or underpaying. If there are other Better Options out there for you. Gerri some of those Insurance Agents represent Many Companies and can give you lots of quotes too. Laura, thanks for coming on tonight. Thanks for having me. Gerri up next we wrap up the willis report hour of housing help with advice on buying a second home. Well look at the overall Housing Market and if now is the right time to buy. trader vo i search. 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This is so ridiculous. Were going to manage your entire repair process from paperwork to pickup, okay, little tiny baby . Your car is ready, and your repairs are guaranteed for as long as you own it. The Progressive Service center a real place, where we really manage your claim from start to finish. Really. Easy as easy can be bye gerri pay cash, use a mortgage or get a home equity line of credit. When it comes to a second home how should you pay for it . Here to talk how you should pay for your Vacation Home, mike aubry. He has sold more than 225 million in real estate. Also the host of hgtvs show, the power broker. He is a friend of show. Good to see you. Wonderful to see you. Gerri a lot of people made money in the stock market. They see the Real Estate Market and see the house i will ultimately retire to. Maybe i dont have money they need. What are the Financing Options out there . Always go with a loan. Option number one stay where youve been on your show so far. If you buy into alibaba tomorrow and it goes to 100 before the close you will buy it in cash. There you go. But i think if youre talking about doing a loan for a house, then you can go get a second home with a mortgage, but remember there are some rules that go with that. Gerri right. One of the things they will take into account debttoincome ratio both between your current and principal residence and property youre going to buy. That debttoincome ratio can not go over 41 between what you owe on both mortgages. Makes sense to go somewhere online like zillow dotcom and use their debttoincome ratio calculator if you meet that. You will not be able to put 20 down you cant do a fha loan on second house. Gerri steps are all the same as buying a first house. Give them all the information and w2s and all the information from the brokerage accounts, et cetera, when it gets down to the loan itself things change of the you have to put down a bigger down payment, 20 , or more, who knows. Depend on lender. Interest rate will not be good as it would be for primary home. Tell us why that is. A lot of people dont understand the way lenders come to this business. You know i think is a matter of risk. We went from sort of pendulum swung from 2005 if you could fog up a mirror somebody would give you money all the way to where were at now. This is about risk aversion. Lenders worry about how much risk they want to accept. If buyer buys a second properties easy to walk away and make a short sale or foreclosure around the lender gets holding the bag. That is why they want you to have more skin in the game than you would with a principal residence. Gerri is it always better to pay cash . Different schools of thought. Some people tell you better to pay cash. Back to that financial risk aversion that puts you in a position of less exposure. I dont belong to that group. I think that, as cheap as money is right now, it is a good idea for to you take a loan on that, remember at that, you will have consequences being able to have a tax shelter from that as long as mortgage debt tweep the primary residence and secondary home is not more than a million bucks. I think you can take that cash and put it somewhere like alibaba tomorrow and make a bunch of money. Gerri do you like taking out a second on your primary to finance that new house . I think in fact that is what most people do. Most people who are in equity position on principle residence do a heloc or home equity line of credit. Those are based on the treasury index right now and remain historically very low, in order to take some equity out and use it in a place where it will actually grow more money because hopefully real estate, although it waxes and wanes over time will make you money over time. Gerri that is exactly what i was going to ask you. Weve all been through what happened over the last several years in real estate. Is now a good tile to buy a second home . I got to be honest with you. If youre in a financial position to be able to do it, i think its a great time to buy a second home right now. When you start looking at these resort communities, they have not recovered with what weve seen other residential spaces do, say last spring. I think right now, if you wait until about december i think you could go to resort type community, maybe not park city, utah, but certainly talking about coastal areas and i think you could knock it over the fence. Gerri i love that. Great stuff. Mike, thanks for being on the show tonight. Great to see you. Always a pleasure. Lower cost of living and a Better Climate are two of the reasons people consider buying a Vacation Home in another country. So should you be looking outside of the u. S. For that second home . Cheryl casone recently sat down with dan pressure and suzanne haskins. They are coauthors of the titernational guide to retiringe overseas on a budget. This is it. Talk to me first about the decision to by a retirement home overseas. Faint ofot for the heart, correct . Well it is not. You have to be kind of committed to wanting to go overseas but there is also nothing to fear ie you do your homework. Gerri what does that homework mean, dan . It could be intimidating. If youve been to another country you like, for instance, panama, that is a good thing but what about those who cant afford to retire at a beach in the mountains in the unitedac states and want to go overseas, what would you tell them . What is the first place they should start to research . T the first thing they should do is spend as much time on thed ground in the place they think they want to be as they possibly can before they make a buying decision. Big difference between being a tourist in a spot and being on vacation there and residentas there during the low season. Spend as much time as you possibly can. Then when you make a buying decision, get qualified, local l legal help. In many of these places it is not considered a conflict of interest for the lawyer to work for you and the seller. Dont do that. Get somebody who works for you and you alone. Suzanne . Su i agree. I totally agree with what dan just said. There are steps you can take tot insure that youre making a good decision and he just outlinedhe e,e steps that you need to takek for sure. All right. So, dan, let me ask you this. You know, one of the things if you will retire overseas, what about health care . We have an Amazing Health care system in this country but what about other countries inhe particular, especially where its ispe cheaper for many americans, rintral america, south america,e parts of eastern europe, whatwh would you say to those that might be thinking what if my doctor is not up to speed wherew im at when im retired and i get sick . Yeah. Susan and i lived in several different places in four latin american countries over the past 13 years and in everyone of them, in every major metropolitan area there is health care the equal or better than what you find in the United States. At half or a third of the cost. That is just the nature of health care outside of the United States. A lot of people who have never been outside of the United States and are not Health Care Consumers in other countries dont realize this but there is, excellent World Class Health care out there. Suzanne, how do we handle taxes if we consider doingg Something Like this. The best thing to find a tax advisor who understand what your obligations are if you ownte International Property but remember that if you are a u. S. Citizen you have to file your taxes every year no matter where you live, no matter if you have residence in another country or even have a second passport. So you still have the same obligations of your u. S. Citizenship no matter where you mightou live. Okay. So, dan, to you first, where are you living right now . I am talking to you from ecuador, up in the northern and december of ecuador. Pretty good connection via skype. Not bad. L susan, what about you . U . I also live in codacchi. Dand and i are married. Im in the states, in hot springs, arkansas, visiting friend and family. You could be married andmi living separately. I have no idea. Really an interesting idea. I like to say i know a couple that retired in colombia. They were a little bit surprised by the slowness of construction in colombia. I mean, just a warning sign. Right, susan. The manana is alive and well. They say manana doesnt just mean tomorrow, it means sometime in the future. You dont necessarily know when that may be. There are little cultural differences you have to be aware of. They call it island time. Dan, suzanne, thank you very much. Glad to have you both on the show. Coming up tomorrow, it is another special edition of the willis report. Were devoting the entire hour to an issue that impacts each and everyone of us, retired. It is an issue that need to be talked about because according to a recent survey, 80 of the americans between ages of 60 and 75 failed Retirement Income literacy test. Well have advice on classic 4 rule to ways to double your nest egg. That is it for tonights willis report. Dont forget to dvr the show if you cant catch us live. Have a great night. Charles i am charles payne. Tonight i will be your teacher and the class is investing 101. If you want to learn how to make money in the stock market get a pen and paper and take some notes. High, am charles payne. We are making money with investing 101. Give you the tools to get control around your money and future. Combine them with questions on facebook and twitter for an hourlong indepth lesson on how to invest in t