Buying a house in Los Angeles

Part 8 - - North Hollywood isn't that bad, is it?

2009-10-01T09:42:00.000-07:00

For those of you in other parts of the country, the LA area is quite unique. Whereas in Boston and NYC the "bad sections" are pretty well defined and you have to try to find them, in LA, their randomly scattered here and there like confetti on a windy day. If you're in Sherman Oaks, for instance, you're nestled in a safe, yet overpriced little hamlet and then you drive east towards Burbank, another very cute, safe area, you pass through the glamorously named North Hollywood. NoHo, as the marketing / PR people have named it, was called Lankershim until recently, but that name didn't have the pizzazz they were looking for so they changed it. (Well, as anyone of you that have actually been to Hollywood knows, NoHo's namesake, itself, is FAR from glamorous. In fact, it’s pretty damn seedy. )

Anyway, as you drive through Sherman Oaks the roads are clean, the trees overhang the streets and kids swing on rainbows as the sunlight falls on flowers of a thousand colors. Then, (queue the dramatic music) duh duh daaaah, you cross into North Hollywood. Suddenly, a wind blows, seemingly from the depths of hell and the streets are dirty and cracked and demon dogs and Ravens have ripped the leaves from the trees and only the wood skeletons of the trunks remain. Gangs roam the streets as you swerve to avoid the victims of drive-bys on Magnolia Blvd. Ok, maybe it’s not quite that bad, but there is a palpable change that’s immediate as you cross the border. The roads are dirtier and cracked and there are less pretty trees and the businesses do seem to have a significant amount of graffiti when compared to Sherman Oaks. Also, there’s apparently more crime, too.

Despite this, we actually looked online at a couple of sweet little places, but were thrown off when we drove by and saw that all the neighbors seemed to all have 7 or 9 cars per house. That’s a lot of people for a two bedroom. Our North Hollywood hunt really took a turn for the worse when we actually set up a go-see. The day before we were scheduled to go Renata took a last look at the listing on the Redfin.com site and here is exactly how it read;

“All showings are cancelled due to the property becoming a crime scene. There was a shooting. check for updates later.”

As you can guess, we never “checked for updates later.” Yikes.

Part 7: "Why didn't we figure this out earlier?"

2009-09-25T11:48:00.000-07:00

After our revelation on Santa Clarita we kept our search closer to home. We actually ended up revisiting a house on Kimlin Ave in Glendale that we originally had refused. By this point in our search pretty much all out illusions, perhaps "delusions" is a more accurate descriptive, had run down the drain of LA real estate reality and we were ready to go with a less than "move in ready" house. As I said, we had seen this property on Kimlin Ave previously. It was actually the third place we had seen and it was in ok shape, but quite outdated, but it did have a big garage and a decent living room. When I asked Renata if she thought we should look at it again she came up with her most brilliant revelation yet; "Why see it? Why not just put in an offer and if it's accepted we still have 17 days to accept or reject. But at least we won't be wasting our time in the event we're outbid. And, she added, we won't get our hopes up and won't be so crushed if we get rejected."

The clouds parted and the sun filtered down from the heavens. Halleluiah! And that’s just what we did. We saw a property, we sent an offer. We saw a property, we sent an offer. Of course, the LA market being what it is, we were obviously rejected time and time again.

Would we ever get a bite? This is exactly why I hated fishing with my brother when I was little. I just didn’t have the patience to sit there casting and recasting and baiting and waiting for the off chance I might get a nibble. But wait! What’s that cute little yellow house on Bend Drive in LA? That looks nice in the photos…and only $314,900! We saw a property, we sent an offer. A day or two later Gayle’s caller ID appeared on my ringing phone. Hmm? “Hello?”

Holy crap! They kind of accepted our offer. Well, they countered, but for just $324,000. What the hell. Let’s do it.

We set up a time to meet with Gayle to actually see the property and drove up the hill. We got there a few moments early and took a peak in the window. Hmm, where was the kitchen? Hmm, where was the floor? Hmm, why’s there a big gap between that door and the house? Hmm, what’s that smell?

Gayle arrived and apologized for being a bit late and opened the lock box. No key. Ok, that’s incorrect. There was half a key. Someone had apparently broken the key off in the lock and although they didn’t tell the listing agent they did have the class to secure the broken end in the lock box. Awesome.

Fast forward twenty four hours later. We arrived, but this time Gayle got stuck in the infamous 101 traffic so David met us and opened the door. Lovely. Not quite as pungent as the urine house on Division street, but this place had a nice piquant mildew aroma reminiscent of a truck stop shower stall. The floors looked pretty good, a nice oak hardwood, but the two bathrooms on the main level were decorated in an early American slaughterhouse style. Downstairs, where another bathroom and the largest bedroom resided was the epicenter of the mildew smell. The floors were concrete, all but one and that floor was a gorgeous green, light green and black carpet that was accented with specks of unknown origin and had an audible “squish” when you traversed it.

Much like the Division Street house Renata didn’t even bother saying a word, I just got “the look” that said it all. When we came back upstairs David seemed to be just about to ask what we thought, but once he saw the look on our faces he already knew the answer.

When Gayle texted me later that evening and asked, “What did you think?” I replied with one word; Hilarious.

Part 6: Phew, It Sure Is Hot Here...

2009-09-11T11:13:00.000-07:00

With the lack of choices close to home and our target areas and being out bid or shot down so resolutely when we did find property, we were, at the very least, a bit irked. So, with a bit of hesitation we decided to check out some places in the Santa Clarita area which consists of Valencia, Santa Clarita, Saugus, Canyon Country and Newhall and is around 35 miles north of LA.

For those readers not from the LA area I guess the best way to describe Santa Clarita comes from my friend Ben; "White Flight". The area has a few real neighborhoods, but in general it's a cookie cutter, carved out and preplanned group of houses with no real town to speak of. But, from what we could gather from the real estate sites, the houses were a touch cheaper and a bit larger than what we could find in the LA / Glendale / Burbank area...hell, even the Sylmar area.

So, as was our M. O., we selected a few sample houses in different areas of the Santa Clarita area and mapped out a trip. This time, however, we did it a bit differently we actually sent the list to Gayle, our agent who had David meet us and actually show us some of the houses and on that Saturday morning, a beautiful sunny and 80 degree day, we filled a travel cup with Sangria, we hopped in the car and headed north up the 5.

Forty five minutes later we arrived in Newhall at our first stop, David was just pulling in as we parked, so we got out of the car. DAMN! It was at least 95 degrees and it was only ten freakin' fifteen in the morning! Well anyway, the first house wasn't too bad, a cute two bed, two bath with hardwood floors and two stories, but the current renter / tenant was a smoker and the place stunk like an ashtray soaked in warm beer. The price was good, though, but there was no yard to speak of...Next.

And off we headed, north to Canyon Country to a nice, old tree neighborhood between Sierra Highway and the 14 freeway. Very cute neighborhood. Lots of tall trees covering the whole area in shade and neatly manicured lawns in front of every house. The shade really did make a five or ten degree difference. We turned onto Fairgate avenue, a dead end, excellent. The house was surrounded by some really nice places, a good sign that the area was pretty nice, and though the garage had been coverted there was a big, gated driveway with plenty of room and a nice stucco wall surrounding the property, giving it a spanish / mexican feel. One step inside the gate and our illusions crumbled. The driveway was quite cracked and the little bit of grass left on the "lawn" was brittle and brown. A peek in a window revealed a lovely matted shag carpet that may or may not have been pink at sometime in the past, but was now several shades of dirt.

After finally locating the lockbox, David opened the front door and we were greeted with a musty gust of odor with a slight hint of amonia or cat urine. Always lovely when it's a thousand degrees out and you've just killed a cup of Sangria. The rest of the house quite stunningly complimented the formerly pink carpet, actually as it was so bad that I actually declared that disasterous carpet the best thing in the house. And off we went, nay, ran. I didn't think our Honda Element could actually squeal its tires.

The rest of the day was a bit of a bust. We looked at a condo that was small, dark and dank with a lovely view of the highway. Pass. And finally a place on Urbandale Avenue in Canyon Country, that photographed well, as shown by the websites, but had a kitchen with a black ceilings and cabinets trimmed in primary red with ceramic fruit stuck to the backsplash and walls. The house did have two bathrooms, but not a single toilet. David commented that the holes in the floor reminded him of his recent trip to China. This place was a nightmare by anyone's standards. We graciously thanked David and didn't even need to tell him we'd be passing on that day's options.

Back down the highway to Glendale and home. Along the way we discussed the Santa Clarita option and thought, hmm, just maybe there's some hope. But what about the heat? Was it really that bad? Would it be bearable if we had a pool? What about the lack of a town center? Did it really matter? Did we really want to live where every restaurant or store was part of a national chain?

We ran into some stop and go traffic where the 5 freeway met the 14. Would the morning commute be worse? Maybe if we looped around and took the 210....yeah, that's how'd we do it. We finally made it to the 134 and got off at Brand Blvd in Glendale. Driving past Porto's bakery, our favorite Sunday morning destination, I rolled down the window and it struck me, the smell of the bakery, the much cooler temperature, an actual downtown all added up to one thing, living in Santa Clarita would suck. I opened my mouth to tell my revelation to Renata, but before I uttered a word she basically said just what I was thinking.

Well, so much for that and back to the drawing board.

Next up: "Why didn't we figure this out earlier?"

Part 5: There's gotta be a better way

2009-09-08T13:14:00.001-07:00

As our hunt continued we real got into those HGTV shows; the house hunting ones, the renovation ones, etc. I think we both felt that soon those people in those shows would be us. It would be us getting those keys to a new house. It would be us tearing out an old kitchen counter and replacing it with shiny new granite. Soon, very soon.

Well, we saw the prices in Glendale and Pasadena (south of the 210) and Burbank wouldn't allow us to get the house we wanted, hell, the prices wouldn't allow us to get the house we didn't want either, so, we expanded our search. I remembered that we had seen a nice house in what seemed a nice neighborhood in the Lakewood Terrace neighborhood of Sylmar, so I suggested we take another drive through and get a better feel for the area. Renata agreed.

The following Saturday I rose early, as I tend to do, fixed a cup of coffee and hit the real estate websites. I hunted around and plugged in our maximum price and plugged in our minimum bedrooms and jotted down addresses and then google mapped our route. Our journey would take up in a clockwise loop through the main part of Sylmar and end in the target Lakewood Terrace area.

The first two houses and neighborhoods were just awful. On either side of the first one the driveways were crammed with at least 6 or 8 cars. That's a lot of cars for a two bedroom house. At the second one there was a house a few doors down with yellow police tape still fluttering in the wind and the house right next door had a dirt pit for a lawn due to the two large pitbulls furiously yelping and any and all cars that past...didn't even get out of the car at this one as I thought $325,000 was a lot to live next to Mike Vick's new house and dog fighting emporium.

The furthest part of the loop brought us to the KB Homes development where the 5 and the 210 meet. The units were quite gorgeous and my wife fell in love. I, however, was less impressed. The price was ok, but the units we were looking at had all the available upgrades and were staged by professionals. Besides that, the HOA fees, (home owners association) were conveniently not disclosed and the whole community had a massive set of powerlines strung out overhead. Now, I know on the logical side of my brain that a correlation to powerlines and two headed babies had not been found, but I didn't want to take that chance. We continued on.

Next up was an area called Gavina Ave that touted lovely houses for less than a hundred thousand. We passed on this neighborhood because although the houses were cute, you only owned the actual house. You had to lease the land for $1,000 or more a month. Yeah, that's a bargain, take out a loan for a hundred grand and still have to pay rent.

Shirking the speed limit laws we sped away from Gavina ave and finally ended up near Lakewood Terrace. There was one place on our list here and it was the scariest one in the neighborhood. While all the other houses around were bight and filled with sunlight, the place on Terra Vista seemed covered in dark shadow, ominously staring us down. Drat, what a disappointment.

Wait, what was that? An open house sign pointing us, nay, luring us down that cute tree lined street? Kagel Canyon road, ah, now that sounded nice. So, so woodsy. Off we went. We followed the signs up a hill and then around a tight corner, then past a cute little community bulletin board, but I didn't see it. Where'd it go? There's a sign, but no house. Oh, there it was, down the hill near that cute little creek. I was in love. Nestled into the side of the hill, well below the street above, was an adorable little cottage, the color of new spring leaves, with a big deck and new windows. The inside had been completely redone and was just the style I wanted. The listing agent told us it was a two bed, one and a half baths with 4,000 sf of land, and the owner, she said to us as if she was about to pass state secrets, was an actor. (I found out later he was some bit actor on a 1980's fantasy sword and sandal series)

Two bed? Please. The first "bedroom" was just at the bottom of the stairs, had no door or closet and you had to pass through it to get to the only real bedroom. You know what? I didn't care. It was a great house and it was a regular sale and though $349,000 was at the top of our price point it was a regular sale so we could actually negotiate, right? So we had Gayle write up the offer for $320. I was pumped.

Well, we heard back pretty darn fast, just a couple of days. The owner didn't want to pay a penny in closing costs and refused to deal with FHA loans. SON OF A Biscuit!! What the hell was wrong with FHA loans? Money is money. What the hell does he care? To hell with him.

A bit of solace came when I found out that he couldn't get the price he wanted and took it off the market. Great, hope he eats it. We saw it come back on the market recently and then get taken right back off a day or two later. Whatever.

And so we continued on, marching into the fight with another tidbit of information; sellers don't like FHA loans.

Next up; What do you think of Santa Clarita?

Part 4: "Really? You're really asking that much for THIS?"

2009-09-03T12:28:00.000-07:00

My advice to anyone in the LA area that are considering striking out on a house hunting adventure and only have a budget from $425,000 and less; do NOT watch those house hunting shows on HGTV. Those shows are filmed in Denver, the mid-West, Maryland and outside Atlanta where there actually seems to be an inventory of houses...houses that are actually worth what the seller is listing for.

Thinking back at our first couple of weeks of our search I look on the Tim and Renata of February of 2009 as a whole other couple. That Tim and Renata's naivety is adorable. They sat down a day or two after finding out they got approved for a mortgage and discussed what they wanted in a house. They opened Excel and made a "need" column and a "want" column. The need column were all the things they absolutely wanted in a house. They wouldn't even consider a house that didn't have all of these "needs." The "want" column, on the other hand, was just a list of things that we'd like in a house, but realizing our budget isn't huge, (by LA standards), they weren't deal breakings.

Our needs list included: two bedrooms, 1.5 to 2 bathrooms, a garage, outside space, (yard, big deck), big living room, and at least 1,000 square feet.

Our wants list included; a third bedroom or bonus room-den and a BIG kitchen.

Ah, so much fun to look back on that time when we believed we had a choice. Almost like looking back at childhood when we believed in Santa Claus.

Around this time I was poking around on a site called estately.com, I believe, and saw a house in our neighborhood that fit all our parameters. I swung by after work and it looked pretty nice from outside. So I went back on the site and clicked on the "schedule a viewing" button, filled in my info and waited. The next day I got a voicemail from a Real Estate agent named Gayle who told me she'd be happy to show me the house, but it had some serious foundation issues. "Hm," I thought, "that is a bummer, but it was cool of her to tell me that up front."

So I saw a few other listings and submitted a few other showing requests and was met with either tepid or no responses. Gayle eventually called back to follow up so we decided to go with her as our agent.

Our first real day looking at houses was a weekday evening and I sent a list of two places we'd like to see and Gayle suggested a third, which was where we started. The first day we actually met with her assistant, David, who lived closer, at a location on Ave. 42. It was listed at 900+ sf with a lot of around 2,000sf. 900? Yeah, right. The place was quite cute and well kept, but, my god, was it tiny. They must have included the balcony as part of the square footage and the lot was pie shaped. No room at all for expansion.

Next up, an empty place on Division st. Nice curb appeal, neat location in a hilly community, but oh, the horror. The inside looked like a 1970's horror film. Shag carpet and primary colored and cracked walls, but that was nothing compared to the amonia smell of cat urine that was permeating the air. David and Renata immediately started sniffling and their eyes swelled and watered. Always the optimist, I soldiered on and pointed out the plusses, "Oh, the rooms are pretty big, eh?" and "wow, it's such a nice neighborhood" and "oh, look at the size of the back yard." Renata simply stared at me for a moment and then rolled her eyes and laughed.

"I'm sorry, David," she said, "Do you have allergies?"

"I guess so," he replied, "but it's not your fault." Such a nice guy.

And off we ran to the next house, our hopes dashed, symbolically screaming into the evening, running away from this monster.

Next up, Kimlin Ave in Glendale. A cute little street that dead-ended at a school. A guarantee that nights and weekends and summers would be quiet and a guarantee the street would be well patrolled and safe. While not as scary as Division st, the Kimlin house was in definite need of what listing agents like to call TLC. i.e. heavy renovation.

Well, we bid farewell to David, after giving him some tourist tips on Boston, as we had just moved from there and he was on his way for a long weekend trip, and we bid goodnight to our first day of house hunting. We were a bit flustered, but still hopeful. We'll find a place yet.

Part 3: What's a "Short Sale"?

2009-09-02T13:00:00.000-07:00

I'm sure you've all seen the term "Short Sale" being screamed at you from Real Estate signs and websites. But if you're a newbie like we were you're probably not that clear on what it is so let me explain it as I understand it.

We all know what a foreclosure is; for some reason, whether it be an owner in financial straits or just someone who's irresponsible, a bank takes possession of a house. And, of course, we know what a straight sale is: an owner selling a house outright. Well, a short sale falls between these two sales and, I can't stress this enough, a MAJOR pain in the ass for your agent and you.

This is the way it was explained to me: If you're about to be foreclosed on and you still owe $400,000 you can make a deal with the bank and list your house for less with the hopes of a quick sale and when you get an offer the bank still has to approve the final sales price. Now, this gets even more complicated if you've taken out two or more loans from separate banks because they each have to sign off.

At the very beginning of our house hunt the fourth place we looked at fell into the short sale category. It was a very cute house perched on the side of a hill in a great neighborhood of Glendale. The house on Plamer Ave was listed at $349,500, the very top of our budget, but we loved the area and the house so we submitted an offer for $355,000 and our hopes soared. Our agent tried to temper our excitement and warned us that short sales could take weeks, if not months. But, she encouraged, if we were patient we could, in some instances, actually outlast other bidders that had submitted higher offers. YAY! We're patient, we can do that!! HA!

For the first week we were excited. My wife had her doubts about the size of the bathroom as it was tiny tiny tiny, but all in all we were positive. I daydreamed about how I'd set up the back yard, about how I'd set up a photo studio in the garage.

At the beginning of the second week my wife saw another great place, not far from Palmer. We called our agent and set an appointment to see it on Sunday, an hour before the open house. Wait, I asked, can we actually put in offers on two different places at the same time? Yep.

Now this house, perched on a hillside with a fantastic view of the Angeles National Forest was stunning, absolutely gorgeous. The living room was large and open and had a gas/wood fireplace. It had a big master and a smaller second bedroom and one and a half bathrooms, yes one and a half bathrooms. It had a deck that stretched from the living room all the way to the master bedroom. From that big deck some stairs decended down onto a small yard, perfect for a table and chairs.

"I WANT IT!" I exclaimed. And since it's listed for just $259,000, we can over bid and be sure to get it, right? WRONG. We submitted a bid for $310,000. $50,000 over asking price was sure to be enough, right?

Well, this was a preapproved short sale and in two days we had our answer; the top 4 bids got a counter offer from the bank and we weren't even close. Weren't even close? But we were $50,000 over the asking price. We bid almost 20% above what they asked for. SON OF A....!

We later found out that the house sold for $365,000. A HUNDRED and SIX thousand over asking. We started to get annoyed, but at least we still had Palmer. I'm sure we'll find out about that soon.

"Hmm, this doesn't look too difficult..."

2009-09-01T12:05:00.000-07:00

I think we really began to get serious about buying a house when I came across a sale on Luanda St in Sylmar, California, a little city about 15 to 20 miles north of Los Angeles. The property was listed at $250,000 or $275,000 and was a cute little 2 bed, 2 bath place with a small swimmer's pool and a beautiful green back yard. I was hooked.

"Well, Sylmar's not "that" far from LA and this part seems pretty nice," I thought, "and at $250, this is GREAT!"

So Renata and I discussed it a little and as we talked we both got the realization that this was actually possible. We actually can get a house in California! So the next day I googled, "mortgages" and got "Results 1 - 10 of about 47,200,000 for mortgages." Damn, 47 million results? This is going to be tough.

1st result; Lendingtree.com. Hey, I've heard of them. That's as good a place to start as any, right? Well...uh oh, the clouds parted and the sunshine of house buying streamed down and enlightened me that I really have no frickin' idea about any aspect of mortgages or homebuying. "What's the difference between 'pre-qual' and 'pre-approved'?" "What the hell is a point?" "Why are there two numbers(Avg APR and Avg rate) when you check mortgage percentage rates?" "What's PMI?"

Ok, so forget all that for right now. Let's see if I can even get a loan. Click click click, social security number, name, address, etc. etc. and soon the initial forms were filled out. Submit Now. Hmm, am I ready? Sure, what the hell? What's a few hundred thousand dollars? Aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaah! "Click"

Holy crap! I was approved. Great! ...and "damn." Why "damn"? 'Cause if I didn't get approved then there'd be no pressure, no monthly mortgage payments, no 30 year commitment. I had one commitment, my wife, and that was an easy decision. This, not so much.

So, what did I know at this point? What had I learned? Pre-qual, or pre-qualified meant little. A pre-qual letter and $1.85 would get you a cup of coffee. Pre-approved was where it's at. Pre-approved meant the bank actually checked your credit and your income and history. Pre-approved meant you had the power to actually buy. Pre-qual just meant you could print from your computer.

And PMI? Well that's Private Mortgage Insurance. That's money that you'll never see again. Basically you're paying for insurance not to cover you, but to cover the bank's assets. (insert many bad words here). And the two numbers when you check the mortgage rates? Still not quite sure...Renata's the money person. And points? That's a pay now or pay later option, one percent of the purchase price per point. Some lenders will knock a certain amount off your rate for each point you pay. I'm mostly clear on points, but being a typical middle class working couple we didn't have the money to buy points anyway.

More to come.
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The Beginning - House hunting in LA...what your real estate agent won't tell you.

2009-08-31T12:41:00.000-07:00

"It's a buyer's market!" screamed all the headlines. "This is the best time to buy!"

Yeah, right. That may be true for some parts of the country, but in sunny L.A., that was FAR from the truth.

My wife and I moved here to Los Angeles at the end of April, 2007. At the time the housing market was still optimistic and a small two bed, 900 square foot place was going for over $500,000. In a decent neighborhood, even more. So we didn't even consider that we'd be house hunting before long.

Well, as you know, the market and the economy crashed and there were foreclosures everywhere due to people taking out those stupid ARM loans and being approved for mortgages they couldn't possibly afford. We watched the news reports, we watched house buying shows on HGTV and we drove around trying to familiarize ourselves with the different neighborhoods, decide where was safe, find out what 'hoods the gangs operated in, figure out where the pretty, qaint neighborhoods were and how much prices varied from zip code to zip code. The news reports on the crashing market and falling prices gave us hope, the HGTV shows gave us inspiration and our neighborhoods survey gave us confidence that we knew where the best, most affordable parts of L.A. were. Hell, we even scanned the real estate listings and drove by a few houses. I thought, hm, this will be great. We'll look at a few places, ask questions and make an offer. The hardest part will be working our way through all the mortgage forms and deciding where we'll get the best rates. HA!

We've been at it since February and have had a crash course in the realities of house buying in L.A. This blog will chronicle our journey, give you real advice and warnings on house hunting and will hopefully have a happy ending. Next; getting preapproved and the benefits and pitfalls of FHA