It was not until we reached London and entered the house we would be living in for the next few weeks that my husband and I knew we'd made a mistake.

By then it was too late: We had committed ourselves to a home exchange and it threatened to be a disaster. Only later did we realize that had we gone about it in a different way we could have avoided a lot of disappointment and anxiety. And while we certainly enjoyed the romance and history of this sophisticated city, our experience was a perfect example of what can go wrong if you don't prepare properly for a home swap.

Our education began when we decided to vacation for five weeks in England with our teen-age daughter and her girlfriend. This first trip to Britain would not be inexpensive, but we thought we knew how to get the most for our money. We would exchange our comfortable, specious Malibu home for a comparable one in London. We would exchange cars as well, and for the price of the round-trip air fare we would have a deluxe vacation.

A friend had done it -- exchanging her home for a cottage in England's Cotswolds -- and she gave the experience a rave review. She and her family had saved on hotel and restaurant expenses and enjoyed all the conveniences of home.

She showed me a catalogue, published each spring, with the names of people all over the world who want to exchange their homes. The listings described the houses, their size and accommodations, the attractions of the areas in which they were located and the owners' preferred destinations. For $15 we could list our home.

My husband and I spent an evening composing our ad -- "large, sunny 4-bedroom family home, within, walking distance to beach, plus use of car and van" -- and sent it off.

Several months later the new catalogue arrived with our ad among all the others. We spent hours studying them. Many appealed to us, but one seemed perfect: A woman in central London was offering a "converted villa -- walk to Metro station, Portobello Road, exotic restaurants . . ." Fearful that someone else would get to her before we did, I telephoned her. She was charming, reserved, cultured -- and she wished to spend her vacation in Malibu. She would be coming with her baby and a friend, and was delighted to leave her car at our disposal. We made the deal.

We accepted the woman's description of her home at face value. It never occurred to us that sometimes what is not said in an advertisement may be more important than what is.

In the three months until our departure, my husband and I fantasized about our "converted villa": surely a quaint, historic mansion, updated and charmingly modernized; Laura Ashley fabrics covering the Victorian furniture, lace curtains at the French doors and windows.

We busied ourselves preparing our home for the English visitors -- relining drawers, purchasing linens and housewares, painting rooms. I even planted what I hoped was an English country-style garden near the front door. I wrote reams of notes regarding the operations of the appliances and the cars, where to shop, eat, hike, and left doctor's and dentist's numbers. Friends and neighbors promised to call and assist our "guests" in any way possible.

On the morning we left I put a welcome bottle of champagne and a light dinner in the refrigerator, along with milk for the baby. With a last appraising look around, we kissed the cat goodbye and set off for the airport.

Fourteen hours later, exhausted but exhilarated, we arrived at Heathrow Airport in London. And in less than an hour we pulled up in front of our villa in a handsome, polished London-style cab. It looked as inviting as the photo the woman had sent: four stories tall, gray-blue and white, with massive stone stairs that led to the heavy oak door. She had said someone would be there to let us in. We rang the bell.

A pale young man opened the door and we exchanged greetings. After we had identified ourselves, he admitted us into a musty, dingy hallway and we received the first presentiment that we had made a mistake. The premonition was reinforced when he preceded us down the hallway, unlocked a blue door and motioned us inside.

We entered what had been described as a "spacious living room, dining and sitting room." The room was dark and small, with pseudo art deco decor, worn carpets and faded slipcovers.

The young man was fumbling with a variety of keys. "This one is for the parlor, these are for the upstairs bedrooms, this one . . ." A key for each room? Yes.

We learned that in this four-story house we would occupy the rooms on the first and second floors only. But our rooms were not connected to each other; each of them had to be entered from the hallway. So on the first floor there was a key for the living room and for the kitchen; on the second floor there was a key for each of the two bedrooms; and the bathroom was on the landing between the two floors. The third and fourth floors were occupied by other tenants, and they would be going through "our" hallway on their way to the floors above. The light dawned.

Our "converted villa" was a rooming house.We had been had.

My husband was outraged. I was upset and felt guilty. The young man was embarrassed. The girls were fascinated.

The situation was pretty bad. The dark rooms had not seen a vacuum cleaner in a long while. The kitchen was so tiny one peson made a crowd. Its main feature was what must be the smallest clothes washer and dryer manufactured -- one sheet and a bra were a full load. Competing for size was the tiny refrigerator under the counter. (Actually, I discovered it had adequate food capacity after I spent several hours chipping the frost off the interior.)

Upstairs, the bedroom closets and drawers were overflowing with a colorful disorganization of clothing and accessories. There was little room for our belongings.

There was a phone in the living area that could be carried upstairs and plugged into a jack in our bedroom -- if you could lift it. It was a pay phone, a red steel box that sat on the floor and weighed 30 pounds.

That evening we had a date to meet my husband's English publisher for dinner. We decided to use the owner's car, a Triumph convertible. She had told us it was shocking pink, so we had little difficulty spotting it parked a half block away. She'd said it was "old, but serviceable."

Ancient is what it was and its functional ability was on a par with everything else. It was impossible to reach the minimum speed of the other vehicles on the road -- which was just as well. At anything over 20 miles per hour, the wind threatened to whip the disintegrating canvas top off. I was forced to travel with my arm out the window holding the top on.

But despite all the drawbacks, my husband and I made a pact: We would enjoy this adventure to the hilt and we would avoid thinking about what might be going on back home. (We knew that our friendly neighbors, true to their word, were including our British guests in dinner parties, exercise classes, tennis dates and beach events. What we didn't know, at the time, was that the woman's entourage had grown to include a number of her friends on vacation in the United States. She turned our home into a boarding-house-away-from-home by inviting them to stay with her in Malibu.)

In the succeeding days, as we journeyed up and down on our communal stairway -- parlor to bedroom to bathroom -- we met our fellow boarders: young, gentle, eager-to-help clothing designers, shopkeepers and musicians. And this lively melange was especially attentive and helpful to our two teen-agers. A punk designer on the fourth floor steered them to little-known and inexpensive "in" clothing shops. The reggae musicians living in the basement took them to clubs for concerts and dancing. The shy and pale young man turned out to be an aspiring poet who clerked in the local library. His two gray kittens were constantly paying us a visit and he was an unfailingly reliable source of information on the best fish and chips stands and how to get around town easily.

The neighborhood was also terrific. We frequented the famed Portobello Antique and Flea Market, which was just around the corner, as much for the spectacle as the irresistible bargains. On weekends shoppers begin arriving at dawn. Several hours later this street bazaar was filled with people of diverse nationalities and races, many in ethnic dress. On the quieter weekdays we did much of our grocery shopping at the fresh fruit and vegetable carts on Portobello Road.

Also within walking distance were several lovely parks, intriguing Indian restaurants, unusual boutiques and, of course, the much-visited pubs, a tradition of the friendly English people. We regularly used the convenient "underground" (London's subway system) to visit museums and go to the theater.

On our last day we busied ourselves tidying up, laundering towels and bed linens -- and the vacation was over.

To our great relief, when we got home to Malibu, we found our house still standing and in good repair. The refrigerator was bare -- and so was the cupboard -- but someone had recently dusted and vacuumed, and made a pass at cleaning the bathrooms.

One matter that required immediate attention, however, was our van. Our visitors had left it at a service station near San Francisco when it developed engine trouble. My husband called the station and authorized $300 in repairs. A few days later he flew there and drove and 350 miles back.

I found myself appreciating the Londoner's s wisdom of having a pay phone in her living room after we were confronted with several hundred dollars of long-distance calls on the next bill. After several calls and letters to our exchanger in London asking for reimbursement, we were finally sent half of the charges.

As for the little English garden I had planted -- they let it die.

So, would we risk a home exchange again in view of the frustrations that arose from this venture? Absolutely. But we would do things differently, among them: * I would curb my tendency to believe in the incontestable truth of the printed word. We were so carried away by the romance of the concept, we threw caution to the wind. * I would research the location of the house, using maps and guidebooks to learn about the area. Had we done this with our "villa" we would have discovered it was in an area of large, turn-of-the-century homes that had gradually been converted into rooming houses and apartments. True, it was colorful, but not the ideal choice for privacy. A "villa" in central London is vastly different than a villa in Italy or Mexico -- an obvious difference we failed to question before agreeing to swap. * I would now know that Europeans sometimes have a different standard of living than Americans, and therefore would be more prepared to adjust to differences in comfort and conveniences. * I would ask for photographs of the interior of the home and a complete description of the facilities. * I would have our telephone disconnected before leaving, and ask the exchanger to go to the phone company and ask for an entirely new phone number. * I would use one of the agencies that specialize in arranging successful home exchanges.They have first-hand knowledge of the accommodations offered and the individuals involved. Their services may cost more than a simple listing, but peace of mind has its price.

The premise of a house exchange is based on trust and goodwill to begin with. Thousands of satisfied families take this type of vacation each year. If yours is going to be one of them, do your homework and minimize the risk.