What is escrow?

So, The Swan House is finally, really ours.

The escrow process was excruciating. For those of you who may not know, escrow is the part of a legally binding transaction where a trusted third party is contracted to manage documentation and the transfer of funds between two (or more) parties of differing interests. In real estate specifically, escrow ensures

  • a contract regarding the condition, sale, and transfer of property is established and adhered to by all parties involved,
  • that funds for the purchase of said property is transferred from the buyer(s) to the seller(s), and
  • that titles and deeds (is there a difference?) are transferred to the appropriate party/parties and publicly recorded.

All of that is to say that escrow is around to make sure the sellers get what they want, the buyer gets what they want, that at the end of the day it’s all legally binding, everyone is (more or less) happy, and that it’s all a matter of public record. It’s…extraordinarily complicated. Incidentally, escrow is also the cause for the deforestation of the world’s rain forests. I’m positive our relatively short escrow period consumed several reams of paper.

There’s tons I don’t know about escrow (I was confused for most of the process, let’s be honest) and I’m sure it involves a lot more than what I’ve listed above. If you want to know more, Google it. Wikipedia isn’t entirely reliable, of course, but this wiki article helped me get some understanding of the process that caused me to lose sleep at night and time at work.

I’m told our escrow was relatively painless compared to what it might have been. There wasn’t any litigation and besides the need for a couple of extensions due to repairs that had to be done, most everything happened on schedule. The problems we did have were due to dealing with government agencies (The Swan House was a Fannie May foreclosure and our loan was funded by the USDA) and the fact that the company that did our escrow work is over 300 miles away. Escrow and Title is usually something that happens locally; it’s just easier to do business face to face. Instead, we were all communicating via e-mail with people we’d never met and who, really, could care less about our case. Their caseload priorities were established upon the nearest close date and up to the very end, we weren’t high priority at all. When we were down to the wire, trying to close, it became a mad-scramble to get things done last second because they just didn’t prepare in advance.

It felt messy. We felt like things were completely out of our control because honestly—government agencies can do whatever they want, even if that means disregarding the contract that is supposed to be legally binding. There were times we felt neglected and taken advantage of. In the end, it all worked out—we got our house, everything was paid for, and we didn’t end up spending too much more than we expected.

Don’t get me wrong. Not everything went belly up. Our real estate agent, Sue, was amazing and fought for us every step of the way (I think she might have mafia connections, actually). She explained every bit of the process to us newbs, and looked out for our best interests. Our mortgage broker, Darryl, made sure that our loan file was pristine so that the underwriters and USDA had everything they needed to establish our loan.

(I still think these people are mad for loaning us this kind of money. Mad, I tell you.)

It was all so stressful. It’s amazing how life events reveal things about who we are in truth; Joel and I learned that we suffer from temporary bipolar disorder under extreme stress. TBD. Similar to SBD…but different. We said bad words, thought bad thoughts, and honestly considered telling the bank to take their foreclosed house and shove it in a very uncomfortable place on several occasions. In the end, it all worked out and God gets the ultimate praise for it. Finally, The Swan House is in our names and we have her keys.

Time to get our DIY on.

Joel started today by replacing the locks on all the exterior doors. He did such a good job. 🙂 The doors will eventually be replaced, but at least we know we’ll be safe and sound behind our dingy, dented doors—doors that we own. It’s legit.

doorhandlebefore

doorhandleafter

The House on Swan Lane

Sometimes it’s difficult to believe how stark the contrast can be from one moment to the next—how life can change in an instant, in the time it takes to blink.

Sally Sparrow agrees with me.

Sally Sparrow agrees with me.

It’s been a little over a hundred days since the last I posted on blackfield. What has changed, you say? Only everything! We’re buying a house—a very, very, very fine house. Erm, there won’t be two cats in the yard (far as I know, anyway), and I can’t remember the other lyrics to that song so I can’t tell you how else The House on Swan Lane differs, but I’m guessing it does in some insignificant way.

I ramble. Never mind.

The point is that we hadn’t planned on buying a house. I mean, at one time, when we were newly-ish married and reasonably-sized houses in the area were priced at around 500,000 dollars, we had despaired of the possibility. Then, either as a coping mechanism or the realization that owning a home was a terrifying responsibility (no, really), we decided we weren’t really interested in buying; we’d be completely content to rent (I rhyme!) for the rest of our days. It really didn’t seem like such a bad deal—I mean, you pay your rent and when something breaks, someone else pays to fix it as long as whatever wasn’t your fault to begin with. With the minor stuff, the husband does the work (which is awesome and sexy…very useful) and we don’t have to deal with the landlords at all. No big deal.

A few years later, when the housing market imploded and real estate prices were dropping like the sky was falling, still—this did not inspire in us the desire to own a home. We were in quite a bit of debt (not so much we couldn’t pay the bills, but enough that we had little-to-no margin) and we quite honestly couldn’t imagine that any sane bank would be willing to loan us any significant amount of money after so many financial institutions struggled under the fallout of high-risk loans gone wrong.

It wasn’t until we began to be very frustrated with living in a condo attached to other people’s homes that we reconsidered our position.

One day at work, a friend of mine began to talk about re-financing her home. She said that over the course of her 15 year term loan, she saved a whopping $200,000. My eyes bugged out, of course, and I wanted to know how all that worked. I didn’t know anything at all about interest rates, you see, and how they are lower now than they have been since just after the great depression. All I knew was that 18% interest rates on my credit card means that I paid a lot more than 500 bucks for that camera I couldn’t wait to save up for back in 2003—the camera that I don’t even have anymore.

To make a very long story a little bit shorter—the bottom line is that I got tired of paying a thousand bucks a month for a two bedroom shoe box I hate living in when I could pay a couple (okay, a little more than a couple) hundred bucks extra for a three bedroom house with a garage and a yard that I’d OWN, with money loaned nearly for free at 3.5% interest.

(It’s not free of course; we’re still talking in the hundreds of thousands paid in interest, but still—that’s nothing compared to what we’d owe at 5% or 7 or 8.)

So, we’ve done everything we can to pay off debt. We found an amazing real-estate agent and a mortgage broker guy that works hard for us. We found a house we love and Escrow has nearly closed on the deal. The place has so, so much potential and it’s going to be fabulous. In the coming months (and years, probably), I hope to share with all of you the process of making The Swan House a home. Sound good to you?

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