I was in the process of writing up the story of the Escrow from Hell. It was up to six or seven chapters and I was only about half way through when Nancy said words to the effect that publishing the story at that level of detail might not be the wisest thing I've ever done. Nancy tends to be right about such things, so I've decided to just put up a highly abridged and sanitized version of the story for now.
The long and the short of it was that soon after we put our house up for sale we got a letter from our next door neighbor saying that there was water draining from our yard onto hers, and that this had caused damage to a shared retaining wall that separated our properties. We were not on speaking terms with our neighbor because of a long-running dispute involving her dogs that ultimately resulted in us filing a lawsuit against her. We were ready and willing to fix the problem, but because we didn't have an open channel of communication it was hard to figure out exactly what the problem was. We were in the process of sending letters back and forth to try to get this situation taken care of when by an incredible stroke of luck we happened to get two offers on our house at nearly the same time. This resulted in a minor bidding war and we ended up getting our full asking price. There was only one little hitch: when we disclosed the drainage issue to our buyer he added a contingency to his offer: we had to completely resolve this issue before close of escrow.
So this left us in a bit of a pickle. How do you "completely resolve" an issue with a neighbor who refuses to communicate with you? I won't go into details, but suffice it to say it was by far the most difficult thing I've ever done. It involved, at various times, three lawyers, threats of physical violence, and a chain of indirect communications that was eight stages from end to end: from our buyer's lawyer to our buyer to his agent to our agent to us to our neighbor's husband (who was speaking to us even if our neighbor wasn't) to our neighbor to our neighbor's lawyer. Our agent, who is a trained mediator, finally managed to close the deal, but even she at one point threw in the towel and thought that the deal was dead before it ultimately rose from the ashes. In the end, between legal bills, interest on two mortgages, and extortion money we had to pay to our neighbor to get her to sign off -- oh, and let's not forget paying the contractor to actually fix the problem (which ultimately turned out to be the smallest of all the costs associated with this debacle) -- we were probably set back about $50,000. I actually lost ten pounds because I was too stressed out to eat. (I'm starting to gain it back now.)
But we sold the house.
We sold the house!
It could have been a whole lot worse. I think there's a very good chance we're heading for a double-dip recession. The historical parallels between today and ~1931-2 are pretty uncanny. And if the next big economic shock had come while we were holding on to two houses, one of which was vacant, that could have ended up being very unpleasant. So going through two months with the sale constantly poised on the hairy edge of falling through was unbelievably stressful. I cannot begin to describe how relieved we are that it's over.