Karen Braverman and her husband Barry had a trying experience shopping for their Scotts Valley home last summer when the California real estate market was swinging strongly back toward a seller''s market after several years of slow going. "There were always other people bidding on the same houses we were bidding on, and what the real estate agent told us to do was even if we weren''t sure if it was the right house, make an offer anyway and we could always back out through the inspection process," says Braverman. "If you even waited one day the house was gone and it was always when it was gone that you were sure it was the right one."

Stories like those told by the Bravermans might make prospective buyers uneasy, despite a generally rosy local real estate market. Locally, prices have continued to rise since the couple bought their home and the National Association of Realtors announced earlier this month that home prices were up over 16 percent nationally last year, more than three times the rate of inflation.

"We are now in what we call a seller''s market," agrees Dick Schofield, an agent with Buyer''s Broker in Carmel. "There are fewer homes for sale and more buyers, therefore home prices are being driven up because of supply and demand."

But, says Schofield, while it is a seller''s market for property, it could be called a borrower''s market for financing. "Interest rates are now quite low and there is a lot of money out there to be loaned," he says. "We''ve seen times when there were practically no loans available and interest rates were 14, 15, even 16 percent." At around 7 percent for a conventional home loan, interest rates are the lowest they have been in years, analysts report. "It may not continue that way," says Schofield "and prices keep going up and up and up, so if someone is in the market I suggest they buy now because I don''t anticipate [prices] are going to come down, and when you do buy, Uncle Sam becomes your partner, you get credit against your taxes. And the way the rental market is here, you can probably buy and pay less per month."

"I think it''s a very good time to buy," agrees Tim Corliss, president of the California Association of Realtors, "but you have to have the patience to look for what you want." And you have to know how to go about it.

Huge and Complex

Buying a home is a huge and complex transaction even if you are a seasoned buyer. For a first-timer, it can be overwhelming. Each step in the process brings a whole new set of questions and concerns. Is it a buyer''s market or a seller''s market? How can you be sure your realtor is on your side? Will the property hold its value? Are there any hidden costs or problems? The mortgage shopping experience can be a dizzying maze of points and fees and a muddle of differing terms. Fortunately, all the experts seem to agree on some basic principles and procedures that can help you get through it all unscathed, make a sound purchase and move into a home that''s right for you. But none of them say it will be easy.

"We say it''s not a case of buyer beware, but buyer be aware," says Schofield, who has worked in real estate locally since 1979. His advice echoes that of many others in the field, who all seem to agree on two fundamental tenets for home buyers, whether novice or practiced: Take your time and do your homework.

"I would suggest people do research in the library first," says Dan Garrett of the California Department of Real Estate, the state''s licensing authority. "Try to educate yourself," he says. "There is a lot of resource material available and [buying a house] is a huge step for most people."

As Garrett suggests, there is a wealth of information available to those willing to take the time to research and plan the process in advance. And that''s definitely preferable to striking out on a Saturday morning with the open house listings, a checkbook and little more than a vague idea of what you want and can afford.

Start with some good resources. Nolo Press publishes an excellent guide called How to Buy a House in California, available at several local libraries and through Nolo. The US Department of Housing and Urban Development (HUD) publishes a variety of detailed information pamphlets for home buyers, on everything from environmental hazards to mortgage insurance to loans for veterans. HUD''s pamphlet, "Settlement Costs" includes an overview of the entire home-buying process and consumer protection laws, in addition to very specific loan-related information, and should be available at any savings and loan since all lenders are required by law to provide loan applicants with a copy. (See below for more resources.)

Armed with a basic understanding of the process, make an informed, objective search, advises Garrett. Don''t let yourself get dreamy-eyed over the first pretty homestead you see and lose your cool. "It''s like every other consumer good," he says. "People fall in love with the product and overlook some aspects and regret it later." Garrett says it is also advisable to investigate lending resources "before you get knee-deep in it and then you don''t know where to turn."

Having a clear idea of how much you can afford before you start looking is a good way to help keep things in perspective. "Buyers should maybe go to the point of being pre-approved" for a loan, says Corliss. "The value of that is that you can make the cleanest offer in the world," he says. "That''s a lot of ammunition in your pocket when you go to make an offer." If you have a pre-approved loan, the seller can be assured the deal will not fall through in the loan application process. (See below for a comparison of pre-approval vs. pre-qualification.)

The pre-approval process also helps prospective buyers be realistic about what they can afford and what they want to pay. Wowed by the first beautiful house they see, many buyers may be tempted to max out their budgets without considering the effect on their disposable income. First-time buyers should also keep in mind the new costs that come with their new digs: property taxes, homeowner''s insurance and, in some cases, homeowner''s association dues. Loan closing costs can amount to as much as 3 percent of the total amount of a home loan, so if you don''t have cash over and above the down payment for closing costs, keep in mind that your loan amount, and your monthly payment, will be increased by the closing costs. (See below for a summary of costs and monthly payment schedule.)

Choose Your Agent

Looking for a good agent can be as confusing as shopping for the house itself. "You need the right professional who can sit down with you and explain the whole process," says Sandy Haney, chief executive officer of the Monterey County Association of Realtors. "I suggest people interview three agents," she says, "and I always stress that people should look for someone they''re really comfortable with."

After working with an agent for two weeks, Braverman and her husband found they weren''t at all comfortable with him and decided to sever the relationship. "We told him we couldn''t work with him anymore because he had taken us out two Saturdays and we had seen 20 homes, and it was obvious he didn''t have a clear picture of what we were looking for," says Braverman. "It was clear that his own personal taste was getting in the way. He would say the houses we liked were sterile, but the homes he said had ''character'' were not homes we liked." When, on top of that, the couple didn''t hear from the agent for a few days, they looked for a new agent and soon found one who was right for them. "She was very professional," says Braverman. "She showed us a lot of houses in the areas we liked and she never interjected her own opinions. She was also always looking for things and would point out cracks and possible water stains, so we didn''t feel she was being dishonest in any way, and we felt she negotiated well for us." Braverman believes it "was because of our agent''s understanding of what we liked and her networking that we got this house."

A good rapport with your agent is important, but there are other concerns as well, says Garrett. "People should be aware that in the typical transaction, both the listing broker and the broker who brings the buyer are agents of the seller, unless there is a written agreement that your agent is acting as a buyer''s broker," he says. "They both owe a duty of honesty, but they are both agents of the seller, working in the seller''s interests."

This situation has given rise, in recent years, to an increasing number of "buyer-only" brokers, Schofield among them. "It''s the buyer who brings the money to the table," says Schofield. "Why shouldn''t he be represented as strongly or more so than the seller?" In addition to representing the buyer''s interests exclusively, buyer brokers "are not limited to houses listed for sale," says Schofield. "We can offer houses for sale by owner, bank-owned properties, properties in default or in probate. The world is our oyster, because we''re out there to meet the needs of the buyer," rather than trying to sell their own listings. Agencies like Schofield''s don''t take listings or in any way represent sellers.

When you find an agent you''re comfortable with, you might want to go the extra step and check the status of their license with the Department of Real Estate. "We spend most of our resources auditing and investigating consumer complaints against brokers," says Garrett. The department receives approximately 10,000 complaints per year and revokes over 600 licenses in a typical year, he says.

The Monterey County Association of Realtors also receives a lot of complaints, says Haney. The number of complaints has increased "over the years as people become more aware," she says. Realtors who belong to the association, which has 875 members locally, must subscribe to a code of ethics, says Haney, "and we have enforcement of that."

Buyers Beware

Shopping for the home itself is only one part of the process, but it is perhaps the most important one. "I tell buyers to sit down and make up a dream list," says Corliss. "Put down everything you could possibly imagine you would want in a home, and then start drawing lines through things that are really unimportant, that you can do without, until you have a list of the basic core issues, the things you have to have."

Braverman and her husband did just that. "We made a list of all the features we wanted," she says. "How many bedrooms, a nice yard, it was important to us to have a good size family room for the kids to play in. We had to have at least four bedrooms because Barry works out of the house. We also had a nice master bedroom on the list, but that became less of a priority." Braverman says the list helped her and her husband think about what features were really essential to them. "If we had waited to find everything we wanted," she says, "we''d still be looking."

If it''s important that your agent passes muster, it''s even more important the house does. The agent is out of the picture after the deal is completed. It''s you, the buyer, who will live with the purchase every day. Fortunately, there are a number of resources buyers can use to scrutinize their prospective pad before they close a deal.

"Under the civil code, sellers have to provide a transfer disclosure statement," says Garrett, "which includes whether there is anything that the seller knows of that might affect the desirability of the property." The document is a straight forward, detailed description of all known problems in the house and on the property, including environmental information, such as flood danger or existing or planned hazardous waste sites. It is one of the best tools for buyer protection, if buyers make full use of it. "Sometimes what happens," he says, "is that this document is given to the buyer with a bunch of other papers, and the buyer doesn''t pay attention to it. You really should get it as early as possible, read it completely and ask questions of the seller and the agent." The seller is required by law to provide complete, accurate information and may be subject to civil liability for failure to do so.

The other protection buyers should make use of is home inspections. Inspections may cost the buyer several hundred dollars, but are well worth it, says Corliss. "If there''s anywhere you get what you pay for, it would be there," he says. "It''s a few dollars very well spent." But buyers shouldn''t just sit back and rely on the inspector. Ask questions of the home inspector, he says, and be present at the time of inspection if at all possible.

Karen Braverman spent hundreds of dollars on inspections, and though she''s glad she did, she regrets not having been more involved in the inspections herself. "We had everything inspected," says Braverman. "It was a very lengthy process, and a very expensive process. We had the sewer inspected, the pool, the roof, we had a geological inspection."

But Braverman found out the hard way you can''t always rely on the inspectors to find everything. The pool inspector she and her husband hired missed a hole in their above-ground pool and now says he is not at fault because the hole was not visible. "I assumed the guy would be thorough," says Braverman. "You could see that there was a dent in the side and I almost pointed it out to him. Then I thought, ''don''t insult the man, it''s obvious there''s a dent there.''" The problem was discovered by the pool cleaner during their first cleaning less than a month after moving in to their new house.

To solve it, the couple had to pump all the water out of the pool or it would soon have burst, flooding their neighbors'' yard and washing away much of their own yard. They now face an additional expense of between $4,500 and $8,000 to fix or replace the pool, and neither the former owner nor the inspector will accept any responsibility. Karen Braverman and her husband are preparing to take the matter to small claims court, but it all could have been avoided, says Braverman, "if I had just asked a question." She still thinks inspections are a good idea, "but next time I would walk along with the inspector and ask a lot of questions, and I would point out anything I saw rather than assuming the inspectors will catch everything," she says.

Unfortunately, there are no mortgage inspectors to point out the problems and risks involved in your home loan, but there are mortgage brokers, whose job, says Donna Bomarito, senior vice president of Monterey Coast Mortgage Corporation, "is to find the best rate and conditions for each person." Bomarito receives hundreds of rate sheets each day from all types of lenders. She then sorts through them all to find the best deal for each individual buyer. Mortgage brokers are paid by the lender, so there is no additional cost to the buyer for this customized loan search service. Brokers can help you determine if you qualify for any special loan terms, such as low-income, veterans, or first-time buyer''s programs. They can also help prospective buyers evaluate their debt carrying capacity and can advise those who should fix credit problems or save for a bigger down payment before getting into a loan.

A Few Final Tips

Before you begin your search in earnest, there are a few pointers you might want to consider.

Get a certified market analysis (CMA) for the area or areas you are considering for your purchase. A CMA will tell you what properties have been on the market recently in the area, the asking price and selling price if sold. CMAs are very useful for evaluating neighborhood market trends and for determining whether or not the property you''re looking at is offered at a fair price.

If you are looking to buy anywhere on the Monterey Peninsula, make sure you understand water credits and their implications for your home. If your water credits are maxed out, you may not ever be able to add another bathroom, or anything else that uses water, without taking out some water-consuming device somewhere else in the house.

When shopping for a loan, consider all the options. There are a lot of special programs available for low income and first time buyers. Don''t assume you don''t qualify. If you haven''t owned a home in the last three years, for example, you qualify as a first time buyer.

If any part of the process has you particularly mystified, and especially if a realtor''s actions seem suspicious to you, call the Monterey County Association of Realtors or the California Department of Real Estate, and ask.

Finally, while you can''t ever be too well informed about the buying process, you can''t ever know everything either. Take the advice of the experts: Do your homework and take your time, but don''t take forever. At some point you have to take the plunge. There''s never any guarantee, but if you follow these suggestions, you can at least maximize your chances of landing on your feet. cw

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