Buyers and Tellers: GIVE SOMETHING BACK

Before I bought my house in March 1998, I read the Real Estate section religiously. The “Tales From the Trenches” articles were very helpful, and now I want to give something back. Here are some suggestions:

* Get pre-approved for a home loan. It will make the escrow process much faster. Also, educate yourself about different loan products. Compare fees and interest rates.

* Avoid impound accounts. If you have financial self-discipline, don’t let your lender create impound accounts for insurance and property taxes.

Impound accounts collect money up front in monthly installments and once a year will pay your insurance premium and property taxes. Instead, you should put your money in a savings account, pay the fees yourself at year’s end and keep the interest.

* Decide on the maximum you want to spend and don’t budge. It’s very easy to spend more money than you should on a house. Also, remember that you still need to spend a lot of money afterward on things such as furniture and landscaping.

* Use the Internet. My favorite site is https://www.listinglink.com. This will educate you on the architecture, age and prices of homes in the city you want to live in.

* Shop around. A lot of first-time buyers have a couple of different cities that they can live in. To find a final city, buyers should attend open houses. This will give them a chance to look at homes without a lot of pressure.

* Interview all prospective real estate brokers. Ask for references. Ask them questions such as: Describe a recent negotiating situation and how you handled it; why is your service better than another broker’s service; how do you handle deadlocked purchasing situations, etc.

* Talk to neighbors before you make an offer. After we made an offer on our house, we decided to talk to the neighbors. They had a wealth of information for us.

As a buyer, it is easy to feel shy and believe that you are disturbing other people. However, neighbors don’t mind if you ask questions. They want friendly, sociable people to live on their street. They want to check out new buyers as much as new buyers want to check out a prospective house. So ask away.

* Ask your real estate agent to give you all the paperwork ahead of time. When you are ready to make an offer, you will be presented with a pile of paperwork to sign. You can’t possibly understand the ramifications of everything you sign. So ask for and read all the information beforehand.

* Find an independent home inspector. Don’t use the one your real estate agent suggests. There is a conflict of interest when you use the referrals that your agent provides. The inspector gets work from the real estate agent, so he or she will most likely try to submit a report that pleases the real estate agent.

* Research how you will hold title. Make decisions about who you will leave the property to if you (and your spouse) pass away.

NGA NGUYEN

Glendale

Ignoring a Red Flag Has Proved Costly

In November, my husband and I purchased our first home. The sellers wanted to amend the purchase agreement to limit plumbing repairs to $250. Anxious to have our offer accepted, we agreed to their stipulation.

Later, our home inspector located problems with the plumbing in one of the bathrooms. This should have tipped us off that there was a serious problem.

Still anxious to buy this house, we asked the sellers to have the repair work completed and they agreed. Much to our dismay, on the final walk-through, we were told that the work was only partially done.

To keep us happy, though, the sellers had some additional work completed that had not been discussed.

We went on with the purchase, only to find out that repairs to the plumbing will be expensive--much more than the $250 limit that the sellers placed on the original agreement.

In hindsight, we realize that the sellers provided us with our red flag and we ignored it. Now we are faced with nearly $1,000 worth of necessary repairs to completely repair our bathroom plumbing.

ROSA and DARYL EDWARDS

Inglewood

No Stairs and No Place to Go but Up

My husband and I bought our first house this summer, a great little fixer-upper just 2 1/2 blocks from the beach.

It was an old house, and we expected it to have problems--and for the most part, we figured fixing them would be part of the fun.

The seller agreed to do a few things before we moved in, including repairs on the termite-damaged wood stairs that led to the main entrance above the garage.

But as escrow drew to a close, problems with the city of Hermosa Beach put a temporary halt on the repair work, leaving the house stair-less.

With notice given to our landlady and movers scheduled, we succumbed to the pressure and signed the papers to assume ownership of the house.

Big mistake. Once escrow closed, everybody got their money and we got the house and its problems. Sure, the seller was still responsible for putting the stairs in, but now that it was a done deal, she wasn’t too worried about pleasing us.

And the stair problem only got worse. To build the stairs the way the city wanted them done cost nearly six times the original bid.

In the end, it took six months for us to get those stairs. And even though the seller paid for most of it, we still had to kick in some money at the end for unforeseen costs, just to ensure it didn’t take another six months.

If we learned one lesson from the experience, it is that we shouldn’t have taken ownership of the house until every last detail was taken care of.

LYNN LIPINSKI

MICHAEL SHOEMAKER

Hermosa Beach

The Pleasures--and Price--of a New Home

My husband and I moved into our first home in May 1998. We moved to Santa Clarita, where we bought a newly built home from Pacific Bay Homes.

We love our new home and are really happy with our choice. Throughout the first year, we have needed repairs from our builder, and they were always completed in a timely manner.

Here are a few tips:

* Stretch your budget.

We bought Plan 4, with the largest plan being 4X. The difference was a bonus room for an added $8,000.

We could have easily afforded the larger home, but we were so scared about the big mortgage that we frightened ourselves into thinking we couldn’t afford any more.

We forgot our income would go up with raises, promotions, etc., and thought only about the present.

We love our home and as of yet don’t need the extra room, but in 10 years, when we have children, we really could take advantage of it.

Our home is a four-bedroom, three-bath model with 2,200 square feet. It’s large and comfortable, but an extra bedroom would have been nice.

* Watch out for the salesperson in the new home office.

Our salesperson was pushy and demanded that we use his lender. When we didn’t and used instead the lender our Realtor recommended, this salesperson tried to scare us that we were getting ripped off and that the loan package we were getting was too good to be true.

Our Realtor stepped in and helped us, but this salesperson caused us unneeded stress.

* Use a Realtor even when buying a new home.

It doesn’t cost you anything, and the advice and help are great.

* When buying a new home, take advantage of flooring upgrades.

You will be much happier if you put in the flooring you want instead of skimping and then having to change your flooring years later. We invested in hardwood and high-quality carpet, and we love it.

* Expenses with a new home are costly.

For some reason we thought we wouldn’t have that many expenses, not realizing how expensive window coverings and backyard landscaping are.

SUSAN and CRAIG WOOD

Canyon Country

Try to See Past Cosmetic Problems

When we bought last year, we wanted to stay in our neighborhood because we liked the area, but we knew many of the homes were more expensive than we could afford.

We found our house with the help of a great agent. The house needed work, mostly cosmetic, but the buyers wanted to sell as soon as possible. The price was about $50,000 less than homes on the same block.

When looking at houses, take along your imagination. Our house looked terrible when we toured it: brown, smelly carpets, old cabinetry, ugly yellow paint and old fixtures.

There were three other prospects looking at the house when we saw it, but many people don’t want to work to fix a property up. We were willing and, just to enhance our chances, bid $1,000 over the asking price.

Mostly it was elbow grease and a whole lot of paint. It helps to either know a handyman or be handy with small jobs yourselves.

We financed the small down payment using a loan from my husband’s 401(k) plan at work, which we are paying back monthly. We borrowed enough, we thought, to redo the kitchen and replace the roof.

We thought we had all the finances worked out, with an estimate from the lender of closing costs. We were shocked when we got to the escrow company and found out the closing costs were $5,000 more than we expected.

By this time it was too late to do anything about it but be angry. Most of it was ridiculous “junk” fees that could have been avoided if we had known it was going to happen.

We strongly recommend finding out the exact closing costs, not an “estimate,” before finalizing the loan process. That way, you’ll have no hidden surprises.

BJ and SCOTT KILLEEN

Sherman Oaks

Realty Experience Didn’t Prevent Some Mistakes

I recently purchased a two-bedroom townhouse near UC Irvine. At the time, I was working as an assistant to a top-producing high-end Realtor, and I am a licensed real estate broker myself.

I thought that, with our knowledge, we would be able to negotiate a good deal for the property and for the loan.

I was dead wrong. Not only did I end up paying over market value for the unit, I spent close to $6,000 on loan fees for a conventional loan. In other words, I got ripped off.

My advice for first-time buyers:

* Get pre-qualified for a home loan, using an online mortgage broker.

Brokers can shop around for the best loans for your particular situation. They usually have a choice of more than 100 lenders.

If you use a standard mortgage broker, not online, your costs will be about four times higher. Standard mortgage brokers have a tendency to charge you for fees that aren’t representative of the work that they performed.

With the Internet, all of the fees are laid out for you in an easy-to-read and simple format so you can make the decision yourself with a lot less pressure.

* Make sure you are buying in the right community.

Don’t get suckered into buying an overpriced property because your emotions are high.

When you’ve decided where you want to live, choose a home that has good investment potential, in addition to all of the feelings you think the house will give you.

CORBIN SCOTT THOMAS

Newport Beach

Do Your Homework, and Don’t Rush It

I recently closed on my first home, and here is the advice that I would give.

* Credit check. Before going to an agent, get copies of your credit report from all three companies--TransUnion, Equifax and Experian. Do as much as you can to fix any negative items on your report.

* Get an agent you like and respect. Do some fact-finding and ask the agent if he or she can give you names of people who can provide references on their performance.

* Ensure you have the dollars. Closing costs can be a major factor in buying your home.

* Let your agent know exactly what you want to buy--single family, condo, townhouse. If your agent tries to sell you something other than what you said you wanted, this is a sign that he or she just wants a sale; dump the agent.

* Take the time to look. Most first-timers see a home and want it right away; don’t do that. Remember, there are a lot of homes for sale in the area that you want to buy.

TERRY P. FREEMAN

Torrance

A Great Home and a Great Experience

Last September, my wife and I realized we had outgrown our two-bedroom apartment and started thinking about moving.

For what we wanted, our rent was going to be $1,000 a month, and we decided to see if we could find a house we could afford.

Enter Steve Shrager, an agent with Gibson & Associates in Studio City and the partner of an agent we had met at an open house.

After a meeting with our lender to figure our maximum purchase price, we came up with a figure of $157,300.

Shrager pledged to put us into our first home.

He called within two weeks. He had found a house we had to look at right away. We were the first people to see it. The sign hadn’t even gone up yet.

Becky and I had seen lots of houses by then and knew it didn’t get much better than this--$150,000 for 1,100 square feet, three bedrooms, one bath, all appliances included, perfect neighborhood. We faxed an offer that evening.

We are still on a cloud. Ten years ago I was virtually homeless, house-sitting for friends, staying with relatives. Now here we are in our own home.

AL SALTOON

Van Nuys

Skillful Agent Kept Transaction Running

My girlfriend and I recently purchased a home in the gated community of Los Robles in Thousand Oaks.

The best advice I can offer is to partner with a real estate agent who is extremely seasoned.

Due to our busy schedules, our agent managed to assure that everything proceeded on time. Inspector visits, termite inspection, city permits, paperwork, etc., have all been completed with exceptional precision and timeliness.

In addition, our agent has exceptional diplomacy skills, which have allowed for contact between us and the sellers to proceed ever so smoothly. Whenever an issue arises, our agent manages to understand the thought process of each side and couch each request from either party accordingly.

JOHN REILLY

Thousand Oaks

Looking Outside the City Paid Off

I bought my first home last year at age 52. Here is my story:

On a Saturday in April, my agent, Beverly, and I set off to look at houses in the high desert.

The more we looked the more I realized I could afford the monthly payments (buying in an area where prices are low was a big help), but I didn’t have the down payment.

I started thinking about my options and I made a mental note of my 401(k) from work, which I had contributed to for more than 15 years.

Nothing we saw appealed to me, and as our house-hunting day was ending, Beverly mentioned a new house in a small tract that had just been listed that morning.

I went into a mild state of panic. No way could I afford a brand-new home. Beverly said, “Well, let’s go look at it and see what it’s like.”

I fell in love. The house had everything I ever wanted--tile roof, sliding glass doors off both living room and master bedroom onto a patio, a delightful fireplace and sun, sun, sun.

Next day I called my plan manager and arranged to have funds transferred into my local bank account.

On June 19, 1998, I became the proudest homeowner you could ever meet.

Here is my advice to first-timers:

* A good real estate agent makes a world of difference.

It took me only two months from the time I decided to buy to the time I moved in, thanks to an excellent agent who made everything go smoothly.

* If you really want an affordable home, be prepared to look a little farther afield.

The high desert has some excellent home prices and is a nice place to live. I’m only five minutes from my work--no freeway driving.

* Check out the neighborhood.

A park down at the end of the street was too noisy on weekends with soccer and baseball so I chose a house farther down the street, away from noise, lights and parked cars in front of the house.

* Make sure any defects are taken care of before move-in date.

Once you move in it takes forever for the workmen to fix problems, especially if they are under time pressure to complete other homes in the tract.

* Get to know the workmen.

I learned which ones liked beer and which did not (they would get a plate of cookies) after the specified work was completed. Even cold water on very hot days was appreciated. They did a lot of little extras for me.

* Get the phone numbers of the builder, construction foreman and contractor.

This saves a lot of time later on if problems arise. And keep calling. Sometimes the foreman gets too busy and forgets about your inquiry.

YVONNE NEWTON

Victorville

Ask Questions and Drive by House Often

My advice is to ask every imaginable question. The people who orchestrate a home purchase will not be around when the ink dries. They are there for a reason: to ensure you make your home purchase.

Also, check the neighborhood before you buy. Generally, buyers fixate on the house and overlook the neighborhood. Drive by during the week and on weekends, at night and during the day.

It’s your only time to be invisible to neighbors. You can observe the natural habitat of what you might be buying into, including traffic patterns and noise levels.

GREGORY HUDGINS

Sunland

Agent Didn’t Have Their Best Interest at Heart

My husband and I bought our first home in the fall of 1997. If we had to do it again, we would be a lot more selective when it came to our real estate agent.

Though we liked her at the beginning, what we needed was someone to be on our side. In retrospect, we doubt we had that. Instead, we had someone who wanted her commission.

For example, when we went to look at the house for the second time, I mentioned to her that the windows, sills and blinds were filthy and we’d definitely want to have those cleaned before moving in. “Oh, that’s pretty standard practice. They’ll do that,” was her response.

As a result, we never made the request in writing, and I doubt she ever mentioned it directly to their agent. On move-in day nothing had been cleaned, carpets were stained and we had to hire people to come in and do it.

She also recommended a home inspector who she claimed was “really good.” So we used him and, soon after we moved in, began to notice things he had missed--such as a leak in the master bathroom and two cracked windows in the bonus room--that would not be inexpensive to fix.

So select your agent carefully and don’t feel obligated to stay with someone just because he or she has already invested time by showing you properties.

Similarly, don’t feel obligated to use the people or companies recommended by the agent. A better call may be to use those recommended by friends and family in the area.

ROMINA SHANE

Brea