Escrow Hell
Pssst... Hey, you! Wanna buy a house? Because we've got one and we can't seem to sell it.
We bought our current home practically on impulse; we were lackadaisically going to open houses -- nothing serious, just getting the lay of the land -- and then we found this one. Bang, sold American, just like that. We looked at it on Monday and were in escrow on it by Friday. 30 days later we moved in here, and that left us with a little problem: two houses, two mortgages. Answer: sell the old one.
Easier said than done. It sat on the market for 43 days before we finally got an offer, and it wasn't that great an offer. The offer was low and since the buyer was scraping to qualify for the loan we were going to have to absorb some of their closing costs. We countered, they countered, everybody scratched their chins and said, "Hmmm..." But...two houses, two mortages. We accepted the offer. And things started getting weird.
First of all, the buyer's agent came into our home to present the offer and bald-faced lied to us right off the bat. "We really want a short escrow," she said. "How does 30 days sound?" Great, we said, let's do it. She went away and the paperwork came back the next day: 45 day escrow. That should have been our first clue, but instead we decided to go along with it. Two houses, two mortgages, after all.
A little further on, we started getting strange requests from them. I don't recall all the specifics, there were so many, but it always involved us giving something up or some inappropriate request of us that would help the buyer qualify for the loan. We kept saying "Okay" because we were eager to sell. (In real estate parlance we were "motivated sellers." In the real world we're called "patsies.") We finally put our foot down when they wanted to change title companies because the buyer wanted to use her friend's office. We were "motivated" but we were starting to get fed up.
But not fed up enough. They missed the close of escrow deadline last week: The financing is almost in place, can we wait a week? We agreed, grudgingly, instructing our agent to tell their agent that this was it, the last concession, no more Mr. Nice Guy. Then last night, the final straw. Our agent has news from their agent: They're not happy with their loan; too many points or fees or something. Will we agree to extend escrow to October 23? Fireworks.
We had three suggestions:
- No fucking way. You've qualified for a loan, so escrow closes this Friday whether you like it or not. Refinance it on your own time.
- Okay, but the price reverts back to our original asking price.
- You've breached the escrow contract. Back out now and we're keeping your $5,000 deposit.
Silence from them for most of the day, then a letter comes in claiming that they told us two weeks ago they couldn't qualify for the loan so would we please hurry up and return their depost. Nuclear fireworks. Beth knows where the buyer works and wanted to drive over there to "slap her right in her lying little face." I had a few such fantasies of my own, but darker. Our agent was spitting mad. We resigned ourselves to putting the house back on the market and made preparations to sue the buyer to keep their deposit.
Then, tonight, another phone call from our agent. He has a plan. Beth was so angry she didn't even want to listen, but I calmed her down and we heard him out. He told us the buyer still really wants the house and was monkeying us around because her financer was monkeying her around -- raising the fee on her loan far above what she agreed to. That sounded almost reasonable, but it was his can't-lose plan that made us agree to go along with it: We agree to extend to October 23, but she has to give up her deposit as good faith money -- we keep it even if she can't make the new deadline. And while she's scrambling around trying to line up financing, we're showing the house again and entertaining back-up offers.
This plan made Beth happy because it draws blood. The buyer has made it clear that $5,000 is a make or break sum for her -- most of the concessions we made were designed to save her a dollar here and a dollar there to help her qualify for a loan -- and she can ill afford to let it go. We get the impression that such a loss could take her out of the market completely, so in a sense it's our house or no house for her. And if she decides it's no house and rejects our proposal? Then we contest the escrow, take it to arbitration, and tie up that $5,000 for as long as it takes to settle the matter -- effectively knocking her out of the market anyway.
We're really unhappy about the way this is playing out. This isn't how we wanted it to be. We wanted to make a nice, friendly sale to this woman and her daughter, and we made a number of concessions to enable them to get into that house. But she went to the well one too many times and now it's degenerated into anger and faxes and threats, and now, because we're angry and fed up, we're boxing her into a corner. I think what we're angriest about is that we had to get angry at all. This sucks.
Win, lose, or draw, it all ends on the 23rd. For the buyer's sake, I hope she can come up with a loan that makes her happy.
