THE SOUTHLAND FIRESTORM: IMPACT ON BUSINESS : Putting a Damper on Home Sales : Destruction Throws Dozens of Transactions Into Limbo

Dozens of pending home sales in the fire-ravaged Malibu area were thrown into limbo Wednesday as buyers and sellers wondered how Southern California’s latest fire devastation will affect their transactions and real estate brokers struggled to find out which homes were still standing.

Confusion was compounded by the lack of reliable phone service and the closure of at least 20 real estate offices in Malibu and surrounding canyons. Downed phone lines made it impossible for many property owners to contact their realtors, while police roadblocks and smoldering rubble continued to deny some homeowners access to their own homes and valuable documents stored at their brokers’ office.

Most real estate experts said sales in the Malibu area will probably grind to a halt for at least the next few months, as burned-out residents try to pull their lives back together and start the monumental task of rebuilding.

“We won’t see much resale activity for the next 30 or maybe even 90 days, as people pick up the pieces and start over,” said Fred Sands, a real estate broker whose two Malibu offices have survived fires, mudslides and earthquakes too numerous to count over the last 25 years.

“But prices will come back after that as people start rebuilding,” Sands said. “Most of these folks have lived through this before, and they’ve stayed put in the past.”

Meanwhile, the latest fires came just as the real estate business in Altadena, Sierra Madre, Laguna Beach and other areas hit by last week’s fires showed signs of returning to normal.

“All things considered, it’s going pretty smoothly out here,” said agent Ray Wells of Keeler/Dilbeck Realty in Pasadena, who just a week ago was busy watering down the roofs of friends and neighbors whose homes were being threatened by the Altadena fire.

“Buyers are coming into our office and looking at homes, almost like nothing ever happened.”

But property brokers who do business in the Malibu area were not as fortunate. With the spotty phone service and road closures, most Malibu realtors found themselves relying on word of mouth and broadcast reports for information about their listings.

“We’re operating in a fog right now,” said Lou Piatt, chief financial officer of Jon Douglas Co., one of Malibu’s biggest real estate brokerages.

“Most of the phone lines are still down, so we’re looking at the pictures from the helicopters on TV and trying to pick out the houses we know,” Douglas said midday Wednesday.

Piatt and other company officials ordered both of the Jon Douglas offices in Malibu closed Tuesday afternoon as the firestorm began to worsen.

But since fire officials prevented moving vans and other vehicles from entering the fire zone, many Douglas agents who were already at the main office on Pacific Coast Highway were forced to stay up until 4 a.m. Wednesday, loading client files and other documents into the trunks of their cars for transport to safer quarters.

Piatt said none of his firm’s sellers had called to cancel their listings and that no buyers had called to back out of their deals.

But other agents said they had begun getting calls from anxious buyers who were already in escrow, some of whom wanted to cancel their sales or renegotiate the sales price.

“It’s not something we really want to talk about, but it’s happening,” said one Malibu agent who asked not to be named. “I just had a guy walk (cancel) from a sale I made last week because he didn’t want to be hassled when all the trucks and bulldozers started showing up” to rebuild.

State law usually allows buyers to back out of a deal without penalty if the home they want to purchase is destroyed while the deal is still in escrow.

Ironically, some local realtors said, the fire may wind up providing a long-term boost to property values in an area that is already very high-priced.

Many homes lost in the blaze were smaller residences built in the 1930s and 1940s. The Malibu City Council, renowned in real estate circles for its tough-minded attitude toward growth, has frequently denied property owners’ efforts to expand their houses or raze them and rebuild.

Now, some realtors say, city officials will have little choice but to approve plans for new, more expensive homes that will replace the ones destroyed by the fire.

“Homeowners couldn’t get the city’s approval to improve their homes, so now it looks like God will do it for them,” one realtor quipped.

While the real estate business is slowly beginning to return to normal in areas hit hard by last week’s fires, problems caused by the blazes linger.

“We had one sale delayed when a title company refused to record the transaction until one of its own people could make a visit and make sure the home was still OK,” said Pasadena realtor Laura Lee.

Other problems are stemming from lenders who are now nervous about the value of homes they recently agreed to finance.

The same problem has spread to homeowners who are merely trying to refinance, with lenders requiring “field reviews” of every property in areas hit by fire.

* TO THE RESCUE: Dozens of stores, restaurants offer assistance. D4.