An era has come to an end

(We interrupt my vacation summary for this breaking news....)

It's finally over. Our house in San Diego is finally sold. I'm relieved that this hellish process of selling the house, which has dragged on since August, is finally over. But I'm sad too. I feel bridges have been burned. The option of someday moving back to San Diego is more remote. It's not like we were planning on moving back, but when we left for the second time in 2006, we wanted to keep that option open.

Here's the recap: In 1998, we sold our house in the Clairemont area of San Diego and moved to Sweden. My husband had been working for a defense sub-contractor in SD and continued to do so remotely. He'd been with this company since they were only seven people, so it was kind of like family. In early 2003, his boss (the president of the company) was killed by terrorists in Kuwait. Several extended trips to SD followed, and my husband was encouraged to move back to fill the gap. A lot of effort went into finding the right house in SD, but when we found this one in the Poway area, we were sure it was the one we wanted. It was already in escrow, but they buyer was having problems coming up with the money, so we made a back-up offer at the asking price. The seller made an ultimatum that the first buyer couldn't meet, and the house was ours.

I loved that house--the floor plan with a guest suite downstairs, the convenient location, the view to both east and west, the nice neighborhood, the friendly neighbors, the good school district. It was a bargain because it had been a rental for years, but everything it needed, we could do ourselves. (That we never got around to doing a lot of these things is another story.)

We moved in fall 2003, and lived there until fall 2006 when we moved back to Sweden. During these years, we spent the summers (May through August) in Sweden. It was the best of both worlds in many ways. Unfortunately things didn't develop with my husband's career the way we'd expected. He worked incredibly long hours under stressful conditions until he burned out. It was then we decided to move back to Sweden full time. He didn't have a job in Sweden yet, and we weren't sure if he'd ever be able to find something as well-paying as he could in SD, so we decided to rent out the house instead of selling it. In retrospect, this was our second mistake.

Our first mistake was refinancing the house in the way that we did. The original purchase price of just under a half million dollars was a good price for the house, but we didn't qualify for a traditional loan (consultants based outside the US). This wasn't a problem because we had a mortgage broker who came highly recommended by several friends. This guy specialized in creative financing. We took two loans which we new were bad long term, with the plan of refinancing after a year or two. And so we did, and everything worked out fine. Our house had increased in value 20% the first year, so when we refinanced, we took out some funds to upgrade (exterior paint, insulated windows, new heater and air-conditioner). Unfortunately, we were talked into another bad loan--not quite as bad as the first, but we knew it would get ugly if we didn't refinance within a few years. Nobody expected the housing market to take a downturn. At worse, prices might level off. Seriously, who wouldn't want to live in San Diego?

Then the market did make that downturn, and it went from not being a good time to refinance, to being impossible to refinance. Our mortgage broker stopped returning calls and eventually disappeared entirely. In 2008, we tried to renegotiate our loan, but the bank was not interested. By the beginning of 2009, our income from rent covered only half of the mortgage payment. We wanted to sell, but for us to break even, the house would have to be priced considerably above market value. The tenants were uncooperative. The bank was uncooperative. The property manager was uncommunicative (turns out his wife had just miscarried their twins and was having serious medical problems, so I'll cut him some slack).

In May, I stopped making mortgage payments. In July, someone at the bank decided to return one of my calls, and I was sent paperwork to apply for a short sale. [In a short sale, the house is sold and the bank accepts that as payment in full, forgiving the rest of the debt. This generally gets the bank a lot more money than if the house was sold at auction, and it saves them the trouble of the foreclosure.] It took weeks for me to fill out all that paperwork, but I sent it back in August, along with several questions. We put the house on the market at market value. Because of our uncooperative tenants, we had no choice other than to use the property manager as the selling agent. He's a nice guy and all, but unfortunately not the best person for the job. In September, we got a form letter from the bank saying they'd put our application on hold because it was incomplete. They did not answer any of our questions or even say what they were missing. I finally found someone at the bank whom I could call, but it turned out she was clueless. I'd send in more and more papers, trying to guess what it was they wanted. We got offers on the house, and the property manager sent them to the bank, but the bank did not respond. Eventually the offers were withdrawn, and new offers were submitted, but still no response.

Finally, in the beginning of December, the property manager got a hold of somebody at the bank who wanted to make this work, and they accepted an offer. This person told me what information they were missing, and I was able to e-mail it to her within minutes. The bank wanted a quick escrow, and that was fine with me. We would have less of a tax penalty if we could get the deal done in 2009. And then, nothing for a couple weeks. I'd fooled myself into believing that people were doing their jobs and everything was moving along as it should.

Suddenly we were up against the foreclosure deadline,December 21, and the house was about to be auctioned off. The buyer had to fork over $10,000 to stop it, and they did. No worries, they said, this should all be done before Christmas. Except the escrow officer went on vacation, and nobody seemed to have anticipated this. Everything just stopped. Over Christmas, the bank got bought by another bank which now could force us to start over with everything if the deal in progress was not fulfilled. New deadline for the house being auctioned off, January 19th. On January 14th, we were told we needed to wire transfer $4000 immediately and get a bunch of papers notarized and sent back.

The money shouldn't have been a problem since I had enough in my bank in SD. But then it turned out that Wells Fargo was incapable of electronically transferring money to another bank within the US. They have an online-bill-pay thing, but with that, they generate a paper check and mail it. It also doesn't work if your bank account don't have a US address. Luckily my mom was able to come to the rescue and wire the money from her bank, and I would pay her back. Now notarization is something that is no longer done in Sweden, and for a US notary, I'd have to go to the embassy. That's expensive and a major pain, but luckily we were leaving for Miami on the 16th and took the papers with us. It turned out that finding a notary and FedEx on a Sunday in Miami was not all that difficult (see vacation day two for the story).

So now I actually got my hopes up and believed we would soon close escrow. What I didn't know was that the buyer's agent was a total idiot. He was supposed to have an appraisal done in the beginning of December. Somehow he'd forgotten to look at it or send it along. Now it turns out that the appraisal came in $15,000 under the offer. This means the buyer's loan would be $15,000 short, but he didn't understand that. There was not time to redo the appraisal, and the buyers couldn't scrape together another $15,000 in cash. My bank was not about to budge. After all this work, the only solution was for the agents to reduce their commissions or the whole deal would fall through. Apparently this took some time to negotiate. The January 19th deadline got extended to the 29th, and I expected to come home from Florida to news that escrow had closed. Silly me.

Somewhere along the line, someone had forgotten to mention that the buyer expected to be reimbursed for the $10,000 that they'd put up to stop the first auction. This didn't really surprise me. There had been reference to a $10,000 seller's contribution in the paperwork since mid-December, so I was kine of prepared for this. I thought I'd gotten lucky with having to pay only $4000. I'd assumed that we'd end up splitting the sum, but since nobody mentioned it, I'd hoped they were okay with it. So now it came down to me wiring $10,000 immediately or the whole thing would fall through. This was too much for me to ask my mom or anyone else for, and I new I wouldn't be able to get it out of Wells Fargo account. I had to skip an online meeting in order to drive to the bank in a snowstorm, but I was able to wire the money from Sweden. The original (clueless) contact person from the bank is involved again and threatening not to extend anymore. She'd rather let the whole thing fall apart than give people the time they need. I guess the only incompetence she tolerates is her own. Fortunately the other bank person outranks her, and cooler heads prevail. Then the buyer had to deliver a cashier's check, but it wasn't enough. So the buyer had to wire money, but they missed the deadline at their bank, so it took an extra day. Then there was some delay in their lender funding. I can no longer imagine what. I believe everything that could possibly be screwed up has already been screwed up at least twice. Does anybody know what they're doing?

Finally, last night, they told me that the sale had been recorded. It's over. I'm relieved, but yet it's not all good. My bridges are burned. This transaction has ruined my good credit rating, and not living in the US, it will be difficult to improve it. Without good credit, moving back to the US would be much harder.