Our Year in Purgatory

Our old house closed escrow today. It seems sort of a un-exciting end to an 11-month tornado of heartache, stress, frustration, anger and fear. If you don’t want to read a mudslinging aching outpour of self-pity, you can skip this post. But if you want to know why Wild Dingo had been recluse in 2007, then read on. The story is intriguing and home owners can learn a lot from it.

And before you read on, realize, I'm well aware that our misfortune pales in comparison to the many injustices in this world. Realize that in the thick of this tornado, we lived and breathed a frustration so deep, it affected our core health as well as our bank account. Its just a story of a tremendous disappointment.

Last April we put our old house on the market to move into our newly built home. Like most home builders, we used the equity in our old home to build the new home, so we had to sell our old home. On our old home, we had spent 2 years remodeling it to a very cute cottage that overlooks a lake. It was so cute that we had three offers all over asking within the first week on the market. Naturally we took the highest bid, a couple buying their first home, and not at all used to mountain living. A second offer stayed on the table through June as a “back up” offer. The second offer was a bachelor realtor who knew the mountains and really loved our house. In hindsight, he was the perfect person for it.

During contingency, the title came up with a property line issue. Long story short: 900 square feet of land was deeded to our house in 1973. The planning department had the map of the new property line adjustment and records also showed several permits for home improvement on the home using that map. In other words, the Santa Clara planning department viewed that 900 square feet as our property. However the legal description in the title report was wrong. In fact it described nothing like the property line. Since it actually takes an engineer to understand legal descriptions of property we knew of nothing about this discrepancy. We searched the entire recorder’s office ($100 of photocopying) to look for the proper legal description. Nothing came up. I checked with the tax assessor to find out who was paying tax on the property. Their answer was, “We don’t care who owns the property. We value the property based on what you paid for it and how much you’ve improved it.” In addition, the tax assessor had an older map showing the 900 square feet belonging to our neighbors (not us) however, that same map referenced the planning department’s map (which showed it as our land), so we knew “something odd” happened during the recording of the 900 square feet in 1973. That is, it just didn’t get recorded. After three months of legal research on how to resolve such a ridiculous county clerical error (I had to quit my consulting job and devote myself fully to this) we ended up with two choices: a 2 year prescriptive rights litigation (a quiet title lawsuit to gain the land as ours without paying for it) or re-purchase the 900 square feet from our neighbors at the appraised value. Since we had buyers eager to move in, we couldn’t wait a 2-year litigation, so we made the offer and the neighbors agreed to sell us our own backyard for the appraised value. After all, losing 900 square feet on paper for our neighbors devalued their property, so it was the right thing to do. It was a good chunk of change too, for a piece of property that is unbuildable and has culvert running through it.

The entire time, we updated the buyer's with everything we knew about and what we were doing. They weren’t happy, but they insisted on staying in the deal. At that time, around June, we asked our agent to get out of the deal with the buyers because we had no idea of how long it would take to get the land “reconveyance” and since we had no intention of paying infinite loan lock fees, we didn’t see how the deal could work. Although our agent suggested a number of options, he always recommended staying in the deal with them. Unfortunately for us, he wrote the contract so poorly there was no end date to our deal, leaving us exposed to hostile buyer behavior. Hindsight is 20/20. I wish we insisted on giving back their deposit because we still had 4 more months ahead of us of fighting with banks and lawyers. He never advised us that we should give them back their deposit, which would have been the responsible thing to do on his part. The buyer's agent, further compromised our positive relationship with our neighbors when she harassed our them with phone calls trying to get an inside scoop on what was going on with the property line issue.

When our neighbors agreed to the sale, it wasn’t so easy to just do the deed. Since they had a mortgage they had to get a reconveyence from their lender, WAMU. The first answer from WAMU: “We don’t do land reconveyences. Sorry, if you never sell your house it is no concern of ours.” When we asked for our lawyer to talk to a WAMU lawyer, they supplied us with a fax number. Yes, a fax number. How’s that for good customer service? It took two months of jumping through hoops to get to a lawyer at WAMU. They’re very good at having gate keepers with a long checklist of denial, in order to protect managers and executives from actually doing any work.

Here's a small sampling of their checklist of denial:

1. We don't do land reconveyences. Period.
2. We don't do land reconveyences on loans less than a year old. (Our neighbors had actually been with WAMU for over 5 years but had simply had refinanced the loan 9 months earlier. And WAMU refused to combine loan numbers into 1 document for a reconveyence.)
3. We won't do the land reconveyence because the cover page of your MAI appraisal reads "Prepared for Scott & Julie Starling" and not "Prepared for Washington Mutual."
4. We won't do a land reconveyence without our own $400 appraisal. (Mind you we paid $4 K for the MAI appraisal, which is the highest form of appraisal one can get and can not be contested by a court.)
5. And the list went on...

In July, I broke down and sent an email to our neighbors and WAMU explaining we had no more choice but to file a quiet-title lawsuit to obtain our land through prescriptive rights and that the lawsuit would likely end in our favor since we and our predecessors had used the land uncontested for 34 years. We didn’t want to do this. We liked our neighbors. But we needed to sell the house. We had no choice. That finally got everyone’s attention and WAMU, under threat of litigation, finally decided it was time to agree to this. A few weeks after agreeing to this, nothing was happening. So I inquired with WAMU. Again, they simply said no this time because they sold the neighbor’s loan to an investor, who refused to allow the reconveyence. It a good thing we asked, I doubt they were ever going to tell us this. A few more lawsuit threats later, WAMU convinced the investor it was the right thing to do and decided to RUSH this land deal through to help the Starling’s keep their buyers. Yah, “rush” at WAMU started in July and finally came to fruition October 1.

Here’s WAMU’s recipe for RUSH:

1. Begin with a pound of denial, add in 1 cup of bureaucracy, and mix until its a thick clay. This should take about 3-4 weeks.
2. Then add in 8 oz of incompetence and stir until the customer steams. While the customer steams, stir in 2 cups of false promises and a half teaspoon of hope.
3. Continue to ignore the thick clay and steaming customer for 3-10 days (depending upon the activity level in your favorite Internet chat room).
4. When customer boils over, gradually mix in investor blame and follow up with another half teaspoon of hope. Continue to wait until customer re-boils.
5. Add in 3 more teaspoons of incompetence and pour the final mix into the ready-greased pan.
6. Bake and serve with a side of passive aggressiveness.
7. Voila! Your customer should be broke and ready for a padded room.

Sometime in late July, the buyers sent us a litigious, offensive letter. They wanted us to pay them to release the contract (something to the tune of $24K) or allow them to rent it for up to two years at their discretion. If they decided not to buy at the end of two years we still owed them the $24K and moving fees. Again, we asked our agent, to get out of it because we didn't want to sell to litigious buyers regardless of the price. Again, his poor advice kept us engaged with these buyers. To make matters worse, his broker soon told him to stop providing advice to us at all, since it was now a legal issue.

I cannot even begin to describe the incompetence of WAMU’s land department. The neighbors, like many home owners, also had a HELOC (with a zero balance since inception) on their home in addition to their main loan. We pursued Crystal (the case manager at WAMU's land department, who had her own checklist of denial for us) to make sure she covered getting approval through the main loan (in this case the investor) as well as the HELOC, which was a department only a few cubicles away. But Crystal’s attempt at multi-tasking was disappointing. As soon as we got the investor approval and paperwork filed, Crystal “discovered” she had to obtain approval on the HELOC. Boy was she sharp. Even though we had politely reminded her at least 15 times during the process to obtain the HELOC approval, she failed to be able to multi-task and get the paperwork finished simultaneously. So we waited another two weeks for the HELOC approval.

I remember running into our agent at the grocery store just after WAMU agreed to provide the reconveyence. He greeted me with an over-zealous joy that exuded a cheerleader celebrating as if we just won a $1 million dollar lottery. “Pardon me,” I thought, “for not sharing in your enthusiasm of WAMU 'allowing' us to FINALLY purchase our own backyard, which by the way, was legally ours by prescriptive rights, and who dragged us through so much red tape, it rivaled the US highway grid.” What kind of moron celebrates a victory like that? No, I believe a more appropriate greeting would have been somber relief with a touch of sympathy.

By the time the title was cleared up it was October. The buyer's attorney told us they would buy the house at a $8K discount (already offered). We were pleased, but couldn't get any more information for two weeks. Finally, we received an email from the one of the buyers asking us to discount $70k. Our agent suggested we provide our costs of clearing up the land issue to “reason” with the buyers. We had enough of their behavior by then, and couldn't see why we would provide a discount to litigious people, so we had our lawyer get us out of the deal with their lawyer and immediately called our second bidder (the realtor) to either purchase the home or sell it for us. The second bidder was so sad, he had just gone into contingency on another home, but agreed to sell our house for us.

It was October. The market was tanking and fall is a bad time to sell a house. So we took it off the market and ate the winter’s months of mortgage on an empty home. This month we got the house staged and just before we put on the market, we got an offer, OFF the market. They took our counter offer and it closed today.

So many feelings arise when I write this story. At times, it felt like Scott and I were backed into a corner with no way out. The stress of not having any choices or control but instead having a large organization stonewall us into not being able to sell our own asset is an unfathomable frustration I can barely convey with words. I loved living in that home and had so many good memories. We poured our heart and soul into remodling it so pretty that so many people wanted it. It is unfortunate that it ended so bitterly for us. I wish we listened to our instincts when under the deal with the litigious buyers, and not our agent. I feel so sad we didn’t sell it to the realtor who truly loved and appreciated it and to make matters worse, he now has to pay our old agent a referral fee. We lost so much money because of our first agent's bad advice. And he still gets paid?

This chapter is closed. I suppose I should feel relieved. But relief is something that should come when there’s a real unknown or when you’ve had a near miss with life and death. The fact is our house was so darn cute, even in this market, we got very near our asking price. So of course it should have sold, without a single doubt. There should have never been an unknown.

Relief isn’t really the word for it because we lost so much financially as well as physically, mentally and emotionally. We didn’t have a near miss. We were victims of circumstance confounded by a bunch of baboons playing hot potato with our life. We were dragged through a seemingly infinite purgatory, knowing our case was valid and that we did nothing ethically wrong. There were so many people besides us, who were wronged in this drama, including our neighbors, the investor, the litigious buyers (who's agent encouraged them to keep their money in escrow) and the second buyer who missed out on something he loved. No. I don’t feel relieved. I feel like we’ve been let out of prison for a crime we didn’t commit. I feel drained and indifferent.