Friday, August 5, 2011

Parlez-vous Escrow?

Once the seller accepts your offer to buy the house, you enter a 30-day period known as “escrow”.  In these four weeks you hire electricians, plumbers and chimney specialists to inspect the house and all of them tell you 101 reasons not to buy it.  The roof needs repair, the foundation isn’t bolted, the property sits in the middle of a flood plain/earthquake/iceberg zone. 

If finding the house with a realtor is like falling in love with a guy, escrow is like meeting that guy’s friends who tell you all the horrible things he does, has done and may possibly do again.  So if you decide to go ahead and marry him don’t say you weren’t warned by the specialists!  Escrow only ends when you accept a house’s imperfections, hold your nose and close the deal on it anyway.  They make it official by recording your name on the house’s title, which you can’t see unless you pay for a copy.  Paying people money during escrow is as easy as taking candy from a baby.  You walked in the house, that'll cost you $125.  You breathed in the house, that'll be $125.  You "thought" of the house, fork over $200.  

For most homebuyers 30 days of escrow is all the time you get to make the single biggest purchase of your entire life.  But 30 days is all you need because a house “For Sale” is a house that someone wants to get rid of. 

Or at least that’s how it used to be.  Things have changed since the housing market meltdown.

In the case of The House with the green bedroom walls and pool that Mr. Wonderful and I wanted to buy, our escrow lasted three times that—three very long months.   Just when we thought we’d close “this week”, the seller would call asking to extend escrow for another seven, 14, 30 days.  The seller requested the extensions for one reason: the house could not be sold.

According to official records, The House had sat vacant for 18 months during which time it racked up violations with the city that had to be amended before it could be sold.  The violations included “mow the lawn”, “trim the hedges”, “fence the backyard”.

Mr. W. and I prepared to take a weed wacker to the front yard but Thelma stopped us saying since we didn’t own the house, we couldn’t cut a blade of grass nor rake an unruly palm tree leaf.  That work was to be done by the seller.

Meanwhile the bank that was lending us the money for our loan was tired of waiting and threatened to increase our mortgage rate if we did not close by the end of the third month.  Trapped between a lazy seller and an antsy lending bank, we did the only thing we could: we went looking for another house. 

On the I found a two bedroom, two bath in tip-top, turn-key shape with a huge yard without a pool.  Mr. Wonderful and I went to see it during its open house and we liked it.  We called Thelma and told her to remove our offer from The House we loved and put an offer in on this new house we liked.   

“What?” Her voiced bellowed over the speakerphone.  “I thought you wanted that fixer upper with the green walls?  That you were going to make it beautiful?”
“The seller isn’t serious about removing the violations, so we can’t buy it.  Besides you called us idiots for wanting to buy that house and apparently you were right.” 
“Everyone who buys a house in this market is an idiot.  The process turns you into an idiot.”
“Thelma, we just can’t wait forever.”
“I’ll call you back,” she said and hung up.

I don’t know who she called or what she said but by the end of the month, the lawn was cut, the papers were signed and our escrow ended.

Finally The House belonged to us idiots!