Last time I mentioned the home buying process, I shared how there were some discrepancies between the required repairs in our contract and what was actually finished. When Pete and I had our final walkthrough of the house on settlement day with our realtor and mortgage banker, we made the unfortunate discovery that most of the large repairs were not at all addressed. Just to name a few: the main beam of the house in the basement was still cracked and hadn’t been sistered, a large washer/dryer hookup and vent revealed itself that had been cleverly hidden from us in the bedroom, there was electric work which had not been properly updated, chipped lead paint had not been addressed and the basement walls weren’t scraped or painted as promised.

We were infuriated and heartbroken. To have this happen during our settlement day made us want to walk away from the house entirely. We were baffled as to how both realtors weren’t on top of things and that we were all discovering this together on what was supposed to be an exciting day for us. Leading up to the settlement, our realtor, Patricia Wise Strehle, made us feel incredibly neglected and as if she was not interested in our well-being. Due to her inability to stay on track and meet deadlines, our settlement date was pushed because paperwork had not been supplied on her behalf. Paperwork which had been requested far in advance, so there was no excuse as to why it had been ignored up until the very last possible minute.

Pete and I were incredibly on top of things and couldn’t have done anything differently to make sure all deadlines were met. We worked together wonderfully with Adam Schwartz from the Integrated Financial Group, who handled all things financial and relating to our FHA loan. He was so dedicated to easing our nerves after this situation that he even emailed us from the hospital several times while his wife was having a baby. It was vastly different dealing with the realtor and financial advisor. Needless to say, we felt very taken advantage of by Pat.

When we sat down at settlement, we made it clear how we felt regarding the repairs not being made. The idea of creating an escrow account was brought up by Pat, and soon after there were back-and-forth debates for a couple of hours between ourselves and the seller. We weren’t in the same room, so we’d have to request an escrow amount from our realtor, who would speak to the seller’s realtor, who would speak to the seller, who would give the realtor his input, who would speak to our realtor, who would speak to a very agitated us. Not a fun way to spend a Cinco de Mayo. Eventually, we settled on $2,000 provided to us from the seller and $500 from Pat, who was willing to offer a small percentage of her earnings to prevent us from walking away. Pete and I originally requested a higher escrow rate, because there was no way of telling how much the sistered beam and other repairs would cost without several professional quotes by contractors. One of the realtors randomly threw out the number “$200″ in conversation regarding how much the beam might cost, which Pete and I immediately argued with and said that would absolutely not cover it for the amount of damage the beam had. At the end of the day, we had $2,500 to work with and a lot of quotes to get. We had been excited to begin working on home renovations, but instead we had to focus on getting the required repairs finished within the time frame of one month.

We began collecting quotes and decided to work with Tony Hourmouzis, who was recommended by our financial advisor. The house had to be raised to relieve pressure on the beam to allow the contractors to remove the old one and install a new support beam. This also included removing ductwork to gain access to the beam, all which was photographed and provided to the seller. According to Tony, the seller had the opportunity to make the mandatory repairs to the beam on his own and failed to do so, so as the new homeowners we had the right to hire whoever we wanted to make the repairs.

Unfortunately, the seller decided that he only wanted to allow us to mask the problem instead of repairing it. He decided to only offer us “$200″ of our escrow funds toward the sistered beam. This is where our problems began. Once we heard that news, we soon found out that the seller didn’t believe it was necessary for us to make the other promised repairs under our escrow account. The basement walls were chipped, sealed and painted. The electrical outlets which didn’t pass inspection were updated. The hidden plumbing was removed. All of these repairs were made per our signed and agreed upon addendum. Items which were clearly stated in our FHA appraisal conditions and escrow agreement were being completely excluded by the seller because he didn’t feel like paying us the full $2,000 owed. Our final invoice ended up being over $3,000 (including re-inspection and all necessary repairs), so Pete and I were correct in trusting our gut that these repairs weren’t exactly minor.

Overall, this escrow dispute lasted two months. Two long months of Pete and I waiting to receive news about the escrow funds and feeling awful that our contractor Tony was left unpaid because the seller did not want to address the obvious. Pete and I drafted formal letters, with attached legal documents clearly backing our case. When we received no response, we had an attorney acquaintance draft a legal letter to the seller, stating that it was our final demand for the release of the funds before we would file a claim in the county court.

Pete and I were confident that the entire amount in escrow was due to us, and refused mediation (having to pay a fee only to likely have the seller tell us he wouldn’t budge), as we found it was not an appropriate solution. We gave the seller until mid-June to respond and heard nothing back until the end of the month, when we were getting ready to submit paperwork to the court. We finally were given word that the seller had agreed to release the $2,000 in escrow funds. In mid-July we received the escrow check and immediately paid our very patient contractor.

I really wish I could say that we would have done something differently, but I truly believe we were intelligent about researching the home buying process in advance. Our major mistake was our choice of realtor, who we had heard nothing but rave reviews about initially. Unfortunately, her typo-filled emails during this entire process were incredibly brief and vague and made us feel like we couldn’t rely on her for help. Pete and I ended up finding all of the houses we went to see on our own (we toured five houses total) because she kept discouraging us from being able to meet our criteria within our budget. We were pretty certain that it wasn’t unheard of to ask for a house with A/C for under $200,000. Because of her large oversight during the final walkthrough of our house, the first few months of homeownership were incredibly stressful for us. Had there been better communication and attention to detail on behalf of Pat, we fully believe this entire situation could have been avoided. I hope other homebuyers will learn from our mistake and not be afraid to ask for references from their realtor before entering such an important process.

We were amazed, however, by how patient and understanding our contractor Tony was during this entire process. We felt awful that none of the funds could be released until an agreement was made between us and the seller, but we knew we were in the right and refused to be taken advantage of any longer. We would definitely recommend him for contractor work in the Philadelphia suburbs.

After speaking with several professionals in the financial field, we put our trust in our mortgage banker, Adam Schwartz, who was incredibly professional and helpful from day one. He made himself available at all times (even when his wife was in labor!) to answer our questions, no matter how silly they might have been. We had a lot of questions during this entire process since everything was so new to us, and he went above and beyond his job. We felt like he was doing the job of the realtor and mortgage banker at times, and he even came to our settlement to make the process easier for us. We would absolutely recommend him to anyone hoping to look into the loan process for a new home, he was a pleasure to work with. He even bought a chipmunk print from my illustration shop for his daughter and he still reaches out to us to check in on our latest home renovation projects.

Anyway, I’m really proud of Pete and I for working together during that frustrating time, instead of letting it get the best of us. We were both fired up numerous times throughout the escrow process, but when one of us had flared tempers, the other would pat them on the back to let them know it would all work out, and vice versa. I think we’re a good team and I’m looking forward to our relationship growing even more during our lessons as newbie homeowners.

For fellow homeowners out there, what were some of the stressful situations you had to deal with during the process? Did anyone else have a similar escrow experience, or are we the only ones out there with such wonderful luck?