‘I Learned Quickly and You Can Too’

From one first-time home buyer to another: Be careful what you wish for; you may get it.

It started off innocently enough. My fiance and I, dreaming of owning our own piece of the San Fernando Valley someday, opened a special savings account at our local bank.

Each week we’d deposit a specific amount, thinking that a year or so down the road we’d have enough to start seriously looking. Our dream house had other ideas.

A month and a half later we found ourselves in the throes of escrow, packing boxes and madly pasting change-of-address stickers over our beautifully engraved wedding invitations.

We’d stumbled onto the house that, for us, had everything: a quaint 1940s traditional style frozen in time, character intact, in the middle of a great neighborhood; a huge, beautiful lot ripe for future additions (an office! walk-in closets!); those classic California backyard staples, a lemon and avocado tree; a detached garage (my fiance’s workshop-domain), all for a monthly mortgage payment in the three digits.

Just luck? Partly. We stumbled onto a great real estate agent and mortgage broker, and the current interest rates are low.

I knew less than nothing about the wheelings and dealings of real estate when all this began, but I learned quickly, and you can too.

* Focus on the agent. Find a real estate agent who cares, who is accessible and will return calls and faxes and who will take the time to explain things to the neophyte buyer. Also find someone who thoroughly knows the area you’re interested in.

* Don’t be a lazy looker. Make sure you have a hard-working agent, but do your own research, too. I actually found our house, and my Realtor negotiated the rest.

* Credit check. If you’re seriously thinking about looking for a house, get a copy of your credit report or reports (for couples) now.

When it comes time for the lender to do a credit check, you don’t want any surprises. There could be errors or bad marks on your record that may take a little time to clear up but are fixable.

Good credit was a big factor for us in getting such a good rate.

* There is a lender for you. There are more lenders out there than the obvious few who spring to mind. We used a mortgage broker who found us the best lender for our situation. Be very selective about whom you interview with. You don’t want to be turned down by several lenders.

* Get prequalified by the lender. This will give you an idea of the size of loan you could be eligible for, thus setting a realistic price range. Don’t waste your time looking at $300,000 homes when you qualify for only a $180,000 loan.

* Timing may not be everything, but it is important. We found our house and negotiated during the Thanksgiving-Christmas holiday time, when everyone else had turkey on the brain and, as a result, had no competition.

To find and get a good deal, you’ll need some special circumstances (i.e. motivated seller, seasonal slowdown, etc.) on your side. Be diligent.

* Assess your liquid assets. It’s true you can get a home with only 3% down, but don’t forget closing costs, moving expenses, essential home improvements and necessary purchases.

Also, some lenders may want you to pay off some or all credit card debts to get a really good rate, which is what happened with us.

In addition, you may have to show at least two months’ worth of reserves in the bank, in other words the amount of what your final mortgage payment would be for two months, which for most first-timers is from $2,000 to $3,000.

Think about realistic options for getting quick cash if you need it (relatives’ gifts, sales of assets or stocks, garage sales, etc.).

* Be realistic about what you can afford but concentrate on your dream neighborhood first and then work down. Don’t assume you can’t live there. We were renting in a pricey celebrity-studded part of town and loved it but never considered the possibility that we would find an affordable home there.

We ended up moving half a mile down the street to a wonderful pocket community that we love, and we didn’t even have to change our phone number or ZIP Code.

* Consider a fixer-upper. Look past the facade, the orange walls and hideous carpet. Are the basics there? Is it sturdy and does it have a good floor plan? Is there room to expand? A bad paint job is no reason not to buy. Termite infestation is. Be realistic about what can and cannot be fixed.

* Make sure you really want to do this. If you’re single, think about the responsibility and lifestyle changes owning a home can bring. If you’re a couple, discuss it together.

* In general, be realistic and flexible. There’s always more than one way to skin the proverbial cat and get the house you want, even if you’re just starting out. Our first-time-buyer story had a happy ending. Yours can too.

LAURA ROHRER

MICHAEL CHARELIAN

West Toluca Lake

Sellers Had Moved and ‘We Were Out of Luck’

A one-bedroom apartment in Los Feliz had been our home for 15 years, and we loved it, but in January 1997, my aunt died and left us the down payment, and we began the search for our dream house.

We looked at several homes over the next few months. When our agent took us to The House, we were not impressed. I thought there was too much gingerbread. Our agent convinced us to take a look inside. We were hooked.

French doors all along the back of the house looked out to the pool and Jacuzzi, with a beautiful weeping willow. There were three fireplaces, including one in the master bedroom. We bought it.

On our agent’s recommendation, we hired a big-name home inspection company. We went to the house with our agent, the sellers and their agent the day of the inspection. The inspector poked and prodded and peeked into dark corners, all the time making notes on his clipboard.

His recommendations were few--a broken window sash, a nonoperative smoke alarm and a couple of other minor things, which the seller repaired. Escrow closed without a hitch.

Before we moved in, I got a call from the pool man, who asked, “Didn’t they tell you about the gas leak? What about the problems with the pool?”

Gas leak? He explained that the line going to the pool heater had ruptured and had been leaking for months. Estimate to repair: $1,500.

Pool problems? He said the pool is painted, not plastered, and algae grows like silly under the paint. Estimate to repair: $4,000.

Phone calls, accusations and denials flew back and forth. The sellers had moved to Canada. We were out of luck. The day before we moved, I went to the house to get things organized. I looked out my beautiful French doors, expecting to see my beautiful-if-you-don’t-look-too-close pool. Instead, I saw my now-not-so-beautiful weeping willow, dead, in the pool.

The wind had uprooted the tree, which had to be 40 years old, and deposited it in the pool. Cost of removal: $650.

Tree guy said: “Hope you didn’t buy the house because of the tree.” Well, yeah, I kinda did, so what?

We moved in. Stove burners didn’t work. Outlets in the living room didn’t work. The Jacuzzi was inoperable. Everyone asked, “Didn’t you get an inspection?” “Yeah, I had an inspection! He had a clipboard! I got a spiffy binder that shows the results.”

Because we had no experience as home buyers, we relied on the recommendation of our agent and his broker about which inspection company to hire. It ended up being the biggest waste of money in the entire process.

If we had it to do over again, here is what we would do:

* Forget the inspector. Instead of an inspection company, we would hire an electrician, a plumber, a roofer, a pool expert and anyone else I could think of to inspect the property. The cost would be higher, but it would be well worth it.

To have had a specialist in each field just look at his or her area of expertise would have uncovered a lot of problems that were missed.

* No matter the cost, buy the warranty policy. Fortunately, the sellers paid for most of this, and we paid for additional coverage for the pool and Jacuzzi. But our agent decided it was unnecessary for us to purchase roof coverage, as the roof was less than 3 years old. Surprise! The roof leaked, and I had no guarantee or warranty on the roof. Fortunately, it was a very minor leak.

The tip is, buy the entire coverage package, if you can’t get the sellers to buy it for you.

We still love the house. We have already had several parties and have discovered that we love to entertain, which is one thing we couldn’t do in a small apartment.

We work in the garden and dream of a day when we can sit on the patio, sipping cocktails by the pool, watching the summer sun set.

I wonder if the air-conditioning works.

CHRISTY EDWARDS

Woodland Hills

Inspector Missed Perilous $6,000 Flaw

We have owned other houses, but shopping in California was new to us. Our real estate agent was invaluable in guiding us through the legion of rules, checks and requirements that seem based on the assumption that all people lie and cheat.

So when he told us we should get our home inspected by a licensed contractor for only a few hundred dollars more, we decided that the level of comfort was worth it.

The man came with an assistant dressed in zippy coveralls. They spent two hours in and under the house and found everything in order. We bought.

On our first day, the gas company red-tagged the heating system. It seems our inspector had overlooked two little problems that wound up costing us $6,000.

First problem: The furnace was venting its exhaust gases into the crawl space.

Second problem: The return air vent was not connected to the furnace; it was only an opening into the crawl space.

So the heating system was drawing source air from under the house, mixing it with carbon monoxide from the exhaust, then circulating it through the house.

Not only were we being poisoned, but the warmest place is the house was the crawl space.

We confronted the inspection company, which denied all liability, referring us to a legal disclaimer on the written report we received a week after they performed (and we paid for) the inspection.

Our real estate company was shocked to learn that the inspection company had made such a large mistake, but it would assume no liability. At least the company did take the inspector off its referral list.

We explored taking the inspector to Small Claims Court, but we simply didn’t want the aggravation. We ate the $6,000 at a time when we could least afford it.

I realize now that I should have gone with the guy in the zippy overalls as he crawled around under the house doing the inspection. Instead, I sat in the house chatting with his boss.

If I’d been down there in the dust, I would have been asking a lot of questions, generally bugging the guy, and I think I would have stumbled on the heating problems myself.

TIMOTHY BOND

Hollywood

‘It Is a Journey; Enjoy the Trip’

Even though my first-time home-buying experience occurred more than 20 years ago, the principles I employed then are just as applicable today.

* Don’t be distracted by lifestyle. My wife and I had been married six months when we made our offer on our first house. We were intimidated, but we realized that with the combining of our incomes, we were in a unique position to invest in a house.

We could have inflated our lifestyle with a couple of new cars, etc., but instead we sold one car and rolled the money into the down payment.

* Don’t be afraid of a little “sweat equity.”

Our first house was almost a disaster. We got some expert opinions on the serious stuff, i.e. structural condition, plumbing, roofing, electrical, etc., but we realized that we could add a lot of value by just taking our fixer-upper and working on it as we had time and money.

A lot of evenings and weekends were spent stripping paint and wallpaper and digging up trees in the backyard.

* Be prepared for the unexpected. No matter how well you plan or whom you consult, there will always be something you overlooked. Don’t beat yourself up over it. Deal with it and move on.

I remember the first time it rained after we moved in. In the middle of the night, I thought I heard water running inside the house. I got out of bed to investigate and found that a “waterfall” was running down the front of the fireplace.

A crack had developed between the roof and the chimney, and the water was just rolling off the roof down the front of the chimney. It was a mess that first night, but no permanent damage was done.

* Don’t be afraid to ask for help. There is more expertise out there now than there was 25 years ago. The proliferation of home improvement centers has provided a great source of free information on how to work on home projects.

You may have to make a couple of unexpected trips back to the store, but with patience you should be able to get the job done to your satisfaction.

* Keep the big picture in mind. A house will probably be the largest purchase you will ever make, and you will probably have it for a long time. Because of this, plan accordingly. In our microwave society, we have a tendency to want everything instantly. Economical homeownership doesn’t come that way. It takes planning, shopping and a lot of hard work. It is a journey; enjoy the trip.

THOM WILLIAMSON

Torrance

1. Save, 2. Look and 3. Purchase

I purchased my first home in November 1997. My experience was surprisingly pleasant. Here are some things that helped me immensely:

* I kept credit card balances under 30 days. This is very important when the credit report is done.

* I started saving early on and invested in stocks, bonds and money market funds.

When I was financially prepared to purchase my first home, I did the following.

* Went to many open houses and narrowed the desired location.

* Found a knowledgeable local broker who knew every criterion I desired in a home (i.e. view, pool, fireplace).

* Got pre-approved for a mortgage.

* Set aside the down payment in a money market account. This was important because in October 1997 the stock market crashed one week after I opened escrow.

I made an offer on my house the first day it was listed and was able to close escrow 30 days later for less than the asking price.

JEFFREY W. JOE

Glendale

Despite 2-Year Saga, ‘I Love My House’

It all started with a dog.

A second dog, actually. I had been recommended to a breeder as someone who would provide a good home for a retiring show dog. I flew east to meet Sophia, we fell in love and I had to find a home with a fenced yard that would accommodate my new two-dog family. Thus began a nightmare that has yet to end.

After many months of searching, I finally found what I was looking for: a charming 1929 English cottage. The kitchen had been remodeled in 1987, and the sellers, who had been in the house about a year, had repainted the interior, refinished the hardwood floors and re-tiled the bathroom.

I made an offer, which was accepted, and the sellers signed a disclosure statement indicating, among other things, that there were no significant defects in the roof and heating of the house.

A week later, I had the home inspected. Because of the house’s age, I was particularly concerned about the plumbing, heating, wiring and the roof, which showed signs of aging.

The inspection report passed the two floor furnaces and the wiring, while calling for a plumbing repair in the bathroom and “maintenance efforts” at the front and right side of the roof, where materials were either damaged or missing. Great news, I thought; there were only minor repairs to be made.

Lesson No. 1: Never trust the inspection company.

The sellers’ Realtor was told about the needed repairs, and we were assured they would be made.

During the final walk-through, my Realtor and I were told that the plumbing repairs had been made. We asked about the roof, which still showed signs of needing repair. The seller and his Realtor said that their roofer had said the roof was fine and didn’t need repairs. The problem was merely cosmetic.

Lesson No. 2: Never trust the sellers, their Realtor, their plumber or their roofer.

The escrow closed.

Lesson No. 3: Never allow the deal to close if you have the slightest doubt something is wrong, no matter how much pressure there is to do so.

The night I moved in, I tried to take a shower and discovered eight to 10 inches of standing water in a bathtub that wasn’t draining properly.

During that first week, I began to pick up rotting roofing shingles from the driveway and backyard. Friends commented on the smell of gas in the living room.

Lesson No. 4: When you think disaster is on the horizon, you’re probably right.

As I began to get roofing estimates, I learned the ugly truth. There was one layer of composition shingles over two wood roofs. This is illegal where I live.

Estimates for a new roof from five roofing companies ranged from $5,000 to $14,000.

I called the Gas Co. in to inspect the furnace. The inspector said the living room floor furnace had a cracked firebox and shut it off.

A parade of heating contractors all bore the same bad news: The house needed a new heating system.

Cost? Anywhere from $3,500 to $7,000. The home warranty plan would cover only $630, the cost of two wall heaters.

Lesson No. 5: Don’t take too much comfort in your home warranty plan.

When I contacted the home inspection company about the roofing and heating problems, they said they were not responsible.

I hired a lawyer, who tried to notify the sellers that I wanted reimbursement for what were now significant costs. They had moved and left no forwarding address.

Lesson No. 6: In real estate transactions, no one except the buyer is responsible for anything.

In October, temperatures in the house were hovering around 35 degrees at night, and rain was coming. I needed a new roof and a heating system. The bill for the roof was $7,400; for the new heating system, $4,600.

I filed a complaint against the sellers’ Realtor with her board of Realtors, citing misrepresentations in sales disclosure statements about the property. The board dismissed my complaint.

Lesson No. 7: Do not believe that a board of Realtors will do anything other than protect its own.

I took the sellers to Small Claims Court, for misrepresenting the condition of the house in the disclosure statement. I thought things looked pretty bad for them.

Lesson No. 8: It doesn’t matter what you think.

I went to court asking for the maximum allowed--$5,000 against almost $12,000 in expenses. I had exhaustive documentation, including photos and videotape of the old roof.

The judge complimented me on my documentation and preparation. He just couldn’t believe that the sellers knew about the problems I was experiencing.

I lost the case.

Lesson No. 9: There is no justice.

The judge said the inspection report had been extremely poor. I spent months trying to get the home inspection company to agree to mediation. When we finally sat down, they agreed to pay me $1,000, against almost $12,000 in expenses. And they will pay the money over four months!

Lesson No. 10: Don’t hope for success.

Regardless of the nightmare of the last 20 months, I love my house. The dogs are happy. Life is good.

Lesson No. 11: When you’re in love, what are you gonna do?

Will I ever buy another house? Not before an army of roofers, heating contractors, electricians, plumbers and termite inspectors have gone over every single inch of the property with the proverbial fine-tooth comb.

A.D. READ

Long Beach