I gush more fully about it on my vacation rental blog, but here’s a little appetizer:

This home is a true ode to history. Everything from the architecture, furnishings, and art pieces lining the walls pays homage to the people (Georgia O’Keefe, Ansel Adams and D.H. Lawrence, by the by) who once claimed this space.

I loved the place as a vacation rental, as a piece of real estate, and as a historical looking glass all at once.

How could you not?

To refresh your memory, here’s what the front of their house looked like after their contractor discovered massive termite and fire damage while doing a simple window replacement:

After two and a half months of take-out Chinese food and living with a construction crew, Jocelyn and Kevan are happy to report that their dream house is back in one piece:

Here’s one more shot to give the full effect. Can’t you imagine them collapsing on the comfy couch after saying goodbye to the construction crew for the last time?

If you haven’t yet, be sure to read their eye-opening full story, which contains a ton of useful tips for first time homebuyers. Here are my three favorite:

• Know your rights and advocate for yourself. You have to remember that it’s your money and your livelihood on the line, so you absolutely should be educated and vocal throughout the process. Don’t let anyone sweep your concerns aside.

• Trust your gut. If something doesn’t feel right, it’s probably not.

• Don’t buy up to your budget cap, and allow lots of room for incidental costs. This is one thing we were smart about–we bought a home $60K under our limit, which has allowed us to pay for the unexpected repairs without going into huge debt.

As we’ve learned, even the most harrowing of tales can have happy endings. Congratulations to Jocelyn and Kevan on their gorgeous new home!

• Do you ever get jealous of clients, watching them buy amazing, jaw-dropping homes?

I do! There are some AMAZING homes in LA and I definitely fantasize about trading places with some of the owners. However this only drives me to work harder so I can someday (hopefully soon) have an amazing house of my own. But when I’m checking out a million dollar mid-century in the Hills with a pool it’s hard not to get a little jealous sometimes!

• I’m sure you’ve seen a few dream homes while showing houses…what’s the latest favorite? And what would your perfect dream home be?
  

My dream home right now is an updated mid-century by a well-known architect. I think it would be so cool to live in a house with great design yet updated for today’s living standards. In general, my dream home would have a view, be high up in the hills and my fiance really wants a pool so we need that too. The interior would be very open, get lots of light, high ceilings, high end finishes and have three bedrooms.  A guest house would be nice, too.

• Do you think agent specialization in certain neighborhoods and types of homes really matters, or is it a marketing tool?

I think specialization is very legit. There’s something to be said about working with an agent who TRULY knows the neighborhood. They can help you avoid bad situations (like overpaying for a home) and point out not-so-obvious good situations. Furthermore, if an agent specializes in a type of home, it can come in very handy during home inspections and appraisals.

• Have you ever dealt with homebuyers who you can tell aren’t really ready to buy a home? What do you do in that situation?

Long term business and referrals are super important for a realtor, but our time is our most valuable asset. That means we have to be careful not to be “doormen” -  i.e., if someone just wants to see homes for fun and they aren’t real buyers, then a good agent needs to suss that out and focus their time on real buyers. It’s definitely important to engage with everyone we come in contact with on a regular basis, but not necessarily by driving them around to see homes. There are other ways to do that.

• How do you feel about working in an industry with such a bad reputation? It seems realtors get short shrift, similar to lawyers and insurance salesmen.

It’s hard. People definitely come into a relationship with a realtor with a pre-conceived notion and some skepticism. It’s a good realtor’s job to win them over and earn their trust. I think some realtors just don’t give the time and attention to their clients, but most of the “shady” agents get pushed out of the business.

• How can a homebuyer ensure they’re working with a good realtor?

It’s really about making sure your agent is committed to you and has your best interests in mind. Does your agent reply to your emails in a timely manner? Are they available to take you out for showings or do they brush you off? Are they writing offers with other clients on the same house (be sure they’re not!)?

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If you love East LA or mid-century modern homes, I encourage you to follow Rob’s blog, Take Sunset. You’ll notice I source a lot of my Real Estate Porn from there. Get your fix straight from the source! Also, if you’re interested in moving to LA, Take Sunset has a bunch of useful neighborhood guides.

Jocelyn and Kevan are an engaged couple planning a wedding this fall. They found what they thought was their dream house, until it turned into their worst nightmare. Read on to learn how to avoid some major real estate pitfalls.

The newlyweds to-be...before their real estate adventure.

Homeowners: Jocelyn (29) is a teacher and Kevan (33) works in finance

Location of Property: Sunset District in San Francisco

Size: 3 bedrooms / 2 bathrooms / 1,380 sq ft

Time Owned: 2 months

How did you find your home? We’d been looking for 6 or 7 weeks starting in February. We’d seen so many awful homes. The second we walked into this house, we got so excited, running around exploring it all. We really believed this was where we wanted to be for the next 10 years. Little did we know what was in store for us!

What was the biggest surprise? The front of the house falling off. We knew when we bought it that the house needed a little work. Namely, we knew we had to fix a leaky window on the front of the house that was causing some water damage. The seller and realtor both promised us it was an easy fix, and the seller had agreed to pay $9,000 at closing towards the cost of this and other repairs.  Our realtor continually assured us that the credit should mostly cover it. Well, once the contractor opened up the wall to replace the window, it became clear there was much more damage than we’d thought. Termite damage, fire damage, the works.

The house they fell in love with.

What was supposed to be a $2,000 window replacement turned into $10,000 in repairs, then before we knew it, piece by piece, the entire front of our house got dismantled and we were looking at a $20,000 bill.

This was on top of various other “small fixes” that had turned into major problems. So far we’ve spent about $40,000 to fix things we’d thought would cost only $14,000 based on initial estimates. And the work isn’t done yet!

Did you feel adequately prepared to become homeowners? We really thought we were ready for this. Kevan had purchased a condo before, so we had some real estate experience. We used a highly recommended realtor. What we didn’t realize is that in real estate, you are truly on your own. We thought we could rely on our realtor and our home inspector to protect us. But when they failed us, we the homebuyers were left holding the bag.

Looking back, were there warning signs? The biggest mistake we made was not trusting our gut throughout the process. For example, we’d promised Jocelyn’s dad that we wouldn’t make an offer the first time we saw a house. He even made our realtor promise the same. But we immediately fell in love with this house, and we made an offer the same night, against our better judgment. We should have followed the advice, and not been swayed by our realtor’s pressure to move quickly.

The front of the house after the contractors discovered hidden termite and fire (!) damage.

Another warning sign arose later when it became clear that our realtor and the listing agent really didn’t get along–they were sending nasty emails and getting into screaming matches on the sidewalk. That was not a good sign, and it created additional problems.

The window that supposedly only needed a minor amount of work...

What advice do you have for other first time home buyers? We have a lot of advice based on our bad experience, and we hope we can help others avoid our fate!

• Know your rights and advocate for yourself. You have to remember that it’s your money and your livelihood on the line, so you absolutely should be educated and vocal throughout the process. Don’t let anyone sweep your concerns aside.

• Trust your gut. If something doesn’t feel right, it’s probably not.

• If your home inspector says there’s damage requiring “further investigation”, or if the report is inconclusive, you MUST investigate further. This may mean getting the seller’s permission to drill holes into the wall so the inspector can see what’s going on. If the seller refuses, that’s a warning sign. One option if they refuse is to ask for additional escrow funds from them, out of which you’ll pay for any structural damage you discover after closing.

• Understand what your home warranty does and does not cover, and how to approach repairs that are covered. We’d assumed the warranty would cover some of the repairs we made, but it didn’t.

• Get a realtor that specializes in your city and neighborhood. Laws and customs vary widely by area, so you need a realtor who is intimately familiar with the neighborhoods in which you’re looking.

• Home inspectors are worth a premium. Do not cut corners on your home inspection.

• Don’t make an offer on a house you’ve seen only once. When you first walk into a promising home, all you see is what you love. You won’t notice even very obvious flaws. If you think you’re going to lose the house if you don’t make the offer immediately, then it’s not the house for you. Just let it go.

Jocelyn came home one day to this lovely view...the work required was clearly far from minor.

• When a price is too good to be true, it probably is. Always question suspiciously low prices.

• Never house hunt before a big trip. We made the offer on our house just before Jocelyn left on a trip to Nicaragua. Making big decisions as a couple when one of you is out of reach with bad phone connections is very hard. We couldn’t have clear conversations, and we both didn’t want to disappoint the other. Had we been together as we went through the negotiation process, we would’ve made decisions differently.

• Don’t buy up to your budget cap, and allow lots of room for incidental costs. This is one thing we were smart about–we bought a home $60K under our limit, which has allowed us to pay for the unexpected repairs without going into huge debt.

After living through two months of construction (so far), how are you holding up? It’s definitely hard living with construction when you weren’t planning on it. We haven’t been alone in our home since we moved in, and we’ve yet to see most of it in habitable condition. But that said, we’re getting through it together. At the end of the day, we are so fortunate to have the opportunity to buy a home. Once all this is over, we’ll have a gorgeous house that we love. And we are so grateful for that.

These ladies are amazing writers, and lately two have been blogging about real estate drama. You know I love the dramz, so I’ve been eating it up. If you’re in the mood for some voyeuristic real estate adventure, I encourage you to read on. I’ll give some background based on my half-baked knowledge of their lives, and then we’ll get into the linky fun.

1. Heather Armstrong (Dooce.com)

fig 1. Heather Armstrong

Lives in Salt Lake City, makes fun of Mormons, is hilarious, and is possibly the most famous blogger ever. She’s been on Oprah and she even met Obama.

Real estate scoop:

Outgrowing the family coop

Loving and losing (with hooker references)

Battling seller craziness

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2. Rebecca Woolf (GirlsGoneChild.net)

fig 2. Rebecca Woolf

Rebecca lives in LA, is really into fashion and art, never went to college (in an impressive way), and wrote a book.

Her real estate drama is on the renter side of things, but because we at Real Savvy Real Estate love our renters, her story absolutely counts. It’s less dramatic than Heather’s (fewer hookers and bobcats, to say the least), but is nonetheless a beautiful reminder about what having a home–no matter if you rent or own–really is all about.

Real estate scoop:

Getting the house (and more importantly, making a whole life work)

Housezilla (battling the craziness that grips us when we make a major change)

House tour (cuz we need to see the goods!)

Advice for moving with small children (hey, it’s a mommy blog after all)

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Stories are such fun, and in keeping with the storytelling theme, I’ve got a special treat for you later this week. You’ll meet two homeowners who thought they were buying their dream house……but little did they know the adventure that was in store for them! Stay tuned…

Jessica is the founder of Revive Hospitality, a Taos, NM based group of companies that span the real estate spectrum. Within the Revive umbrella, she and her husband own a construction business that builds one of a kind homes and developments. She facilitates real estate sales (but not as a realtor), and most recently she has started renting out her special properties in Taos and Hawaii as vacation rentals. On top of all this, she is a mother of six (!). I met Jessica through RSRE and was lucky enough to hit the town with her last month while she was visiting San Francisco. We laughed and bonded over sushi and sake, and as I got know her it became clear she has a lot of experience and wisdom, which I asked her to share with the RSRE readers.

Jessica reflected on the biggest things she’s learned over the course of her real estate career. While not everyone plans to become a serial investor, the lessons she’s learned certainly can help anyone contemplating diving into a home purchase.

Here is her advice:

1) Hire help – this will free up your time so you can be creative. It’s hard to find the right person, but when you find them it’s so incredibly worth it.

2) Always have a backup plan. Having alternate sources of income is important, whether you’re a real estate investor or work a 9-to-5 job. You never know what circumstances will dictate, so you must have a fallback. Keep your teacher’s license (my background is in teaching), or whatever your fallback is.

3) Have a large emergency fund of 8-12 months’ living expenses. Build this fund before you start investing. It’s better to go slow and steady, learning from the mistakes of the recent crash, than to get ahead of yourself in spending.

4) When considering buying a house, you should feel inspired. You have to love what you’re buying, because you’re committing to a huge amount of debt for the sake of owning this house.

5) But at the same time, even if you love the house you have to be detached in order to make smart decisions. Remember that you can make your nest anywhere. Ultimately, it’s just a house. It was hard for me to move out of the house where I raised my kids, but I couldn’t let my sentimentality keep me from making the right decision.

6) Never forget that marriage is a business partnership in the eyes of the law. Nobody teaches you this, but the fact is that once you’re married you are essentially business partners. Your credit scores are linked, debt brought into or created during the marriage is attached to you both, and mortgage lenders will look at you as a couple, not as individuals. [Editor's note: That's why you should never, ever get married without knowing your partner's credit score and financial profile. Even better, sit down and have an honest talk about your attitudes towards debt, investment, and money management.]

7) I consider myself a steward of the homes I own or represent. Some people view property ownership and real estate investing as somehow selfish or self-serving, but I really see what I do as a service (while still making a living). For example, I’ll put money into a historic home to preserve its beauty and make it habitable, and then I pass it on to the next person. I’m a steward because I’m able to provide a beautiful home for someone and fulfill their dreams. I truly believe it can be a win-win situation when there’s a real connection between buyer and seller.

Editor’s note: I love Jessica’s philosophy of stewardship – she’s a savvy businesswoman, but she also stays connected to the tangible service she provides.

You can see Jessica’s vacation rental properties in Taos here and here, and in Kaua’i here.

Name: Jane

Age: 57

Occupation: Writer/Columnist, Vacation Rental Owner

Location of property: SOMA (South of Market) in San Francisco

Size: 600 sq ft, 1 bdrm/1 bath

Years Owned: 3

What motivated you to buy? I had just divorced and needed to find my own home. My ex husband and I had been living in a suburb of San Francisco, but I decided that since I’d be living alone, it made more sense to move into San Francisco where there would be more resources and places I could walk. I didn’t need a big place, since my two daughters are grown. I ended up on the penthouse level of a luxury condo building with views of the city. The location is great–right in the middle of everything, near restaurants, grocery stores, and theaters, as well as lots of transportation (both the 280 and 101 freeways, Caltrain, and BART).

How did you finance your home? What sold me on this particular condo was the developer’s amazing financing offer. I got a 5-year interest-only loan at a low rate; the developer paid 4% of my interest in the first year, 3% the second year, 2% for the third, fourth, and fifth years.

I used a portion of my divorce settlement as a down payment of 25% on the $575k purchase price. The mentality in San Francisco at the time was oriented towards “flipping” condos, so the mortgage company and real estate agent thought I was crazy to put down so much. But I followed my instincts–it seemed crazy to own a property for five years and depend on appreciation to build equity. Plus, I wanted low monthly payments, and with the developer’s financing offer, I figured this would buy me time with low monthly costs to see where my life would go, post-divorce.

How was your timing? As it turned out, I bought at the top of the market, and soon after I bought, the market crashed. My condo’s value is probably much lower than what I paid, but that’s ok because I’m in it for the long-term.

Things ended up working out well. Eventually, I met someone special, married, and moved in with him. Because it was so nicely decorated and centrally-located, I was able to turn it into a furnished corporate rental, where professionals stay for 3-6 months while in town on business. Even though the rental market is down, the rent I receive more than covers my costs.

My monthly payment is $800/month ($1,600/month including tax, insurance, parking, utilities and HOA), and I’m bringing in $2500/month in rent. Since the rental market is down now, I expect to be able to increase the rent to over $3,000 in the future. Meanwhile, whenever I have extra money I put it towards my mortgage. In a few years I’ll have a paid off home.

Bold decorating (in good taste) make this corporate rental stand out from the pack.

What I’m proud of is that I used common sense when I made this purchase. It didn’t make sense to me to put nothing down and have no equity in my home for 5 years (as people had been urging me to do). My goal was to own this place long-term, to own an asset that was all mine, that I could use for the security of a home. The fact that I have to wait a few years until the condo value rises to what I paid for it again is ok with me, because in the meantime my asset is making me money.

This view may not captivate everyone, but I love being able to see the city where I live.

Your favorite thing about owning a home: To be honest, it’s probably pride of ownership. That’s not tangible, but it means a lot to me personally and emotionally. It anchors me emotionally. I own a luxury apartment in downtown San Francisco decorated exactly how I want it to be, with a beautiful view, and it’s mine. I’m proud of that.

Your biggest headache: My biggest worry is that there could be an earthquake in San Francisco that would wipe out my biggest asset. Construction in San Francisco is all about earthquake preparedness, so I’m not too worried. Other than that, I have few concerns. The condo is managed by a company that specializes in corporate rentals, so they find tenants, do thorough screenings, and collect the rent. They take care of everything in exchange for 50% of the first month’s rent as a fee. Because it’s a corporate rental, rent is often paid for by a corporation; they are incredibly regular in payment and very reliable.

Biggest surprise: How headache-free it all has been.

Scariest moment: I was going through a tremendous change in my life, as a woman in her mid-50s getting divorced. Just getting up in the morning was very scary. Buying the place was scary, too, but it was just part of that time in my life.

A condo of 600 sq ft doesn't have a lot of space, but if you're creative you can maximize what you have.

Your real estate goal: To pay off the condo before the 5-year loan is due. Now, when I think about buying a new dress, I think to myself “wouldn’t I rather put this towards my goal of paying off my condo?” and I send the money off to Wells Fargo, even if it’s just a couple hundred dollars. It gives me a specific reason not to buy unnecessary things. Ultimately, paying off this mortgage is an important aspect of my retirement planning. This mortgage will be paid off by the time I’m 60 so that I can count on the rental income in my retirement.

At the end of the day, is it worth it? Absolutely. I have an asset that over the longhaul will increase in value, and is also very nice for living and works well as a corporate rental. No matter how I use this place, it works.

What is your advice to someone like you who is considering buying a home? If buying a home you’re considering renting out, don’t scrimp on furnishings. The market has gone way down for rentals, but because I furnished my place so beautifully it has never sat empty.

Another piece of advice: don’t try to play some real estate game. Take this asset seriously. Put a lot down if you can, and treat it with respect in terms of financing. Don’t try to get rich quick, and don’t be “house poor.” Invest for the long term, buy something you love, and that works on a number of different levels so that no matter how you use it, it works for you.

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[Ed. note: What's great about Jane's story is how she uses home ownership to guide other aspects of her financial life. It focuses her on a specific goal of owning her condo outright. Readers should be aware that Jane's story is unusual in that she was able to build fast equity with her 25% down payment. The fact that her non-rental income comes in "chunks" enables her to pay down her mortgage rapidly. For many (particularly younger) people, another financing option would be to refinance the 5-year interest-only loan, locking in a 15- or 30-year loan at a today's low mortgage rates.]