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“Well, this is the weirdest clog I’ve ever seen.” The plumber had spent 20 minutes on the roof of our building, snaking the toilet waste line. Hours earlier, as my fiancée was putting on her makeup in the bathroom in preparation for her bridal shower, poop started coming up through the shower drain. Nothing says “I can’t wait to get married” like a rising tide of crap.
The plumber pulled out his findings from the waste line: a pair of women’s bathing suit bottoms and multiple pairs of women’s underwear. There was only one floor above us, so it was no mystery who had flushed the items. The apartment above belonged to an elderly woman and her middle aged son. I’m not sure what his condition was, but think Lenny from Of Mice and Men.
This wasn’t the first time we had a problem with our upstairs neighbor.
On two separate occasions, he had banged on our door at 7 A.M., asking why we had turned his water off. Calmly, I explained we had not turned his water off but he didn’t understand. His eyes were confused and bloodshot. He was sure we were stealing his water.
I emailed the co-op board who assured me the guy was a good person and probably just hadn’t taken his meds that morning. Basically, they weren’t going to do anything. You know the old saying: “Wake me up and accuse me of stealing your water once is an accident. Wake me up and accuse me of stealing your water twice is a coincidence. Flush your mom’s underwear down the toilet and create a rising tide of shit in my bathroom is a pattern.”
We didn’t want to leave the city, but the timing felt right.
Our one-bedroom home felt cramped and now dangerous. I had tenants moving out of a home I owned in Maryland, so we decided to move there after we got married and play house.
Values in D.C. hadn’t taken a big hit in the real estate bubble burst, so by 2011 they had stabilized. Looking at the comparable sales, the home was worth pretty much what I had paid for it in 2008. Happy to just get my money out, we put it on the market for sale. We had a lot of showings and interest but no offers. Then the first dagger: the exact same unit directly below came on the market for $20,000 less than mine. It needed work but it made mine look overpriced in comparison. The thing that stuck in my craw was that the other unit was listed by the co-op board president who also was a realtor. It felt like the association that was supposed to be looking out for me was actively working against me.
After another week, I lowered my price to exactly what I needed to sell the home and walk away with no gain and no loss. At that point, I had already moved out and was responsible for paying two mortgages. Just getting the home off my plate would be a win. As soon as I lowered my price, the unit below lowered theirs to remain $20,000 below mine.
Now I was sweating.
We ended up having a buyer who was very interested. She wrote an offer on my home below the asking price. To accept the offer, I would have had to bring money to the table that I didn’t have. Unwilling to budge on her offer, she ended up buying the unit below me.
Here is the crossroads, my friends. Due to the below market value sale of the unit underneath me, I now had a home worth less than what I owed. I had already moved out. I couldn’t afford to pay the mortgage. The co-op association had a rule limiting the number of rentals, so I couldn’t rent it out.
My whole life I had built an identity around doing the right thing. I was an Eagle Scout, for Christ’s sake.
And now I was in a position where there was no right answer, no way out to keep my nose clean. So I made a decision that broke my heart: I put the home up as a short sale, so the mortgage bank would have to accept a lower price than what they were owed. I rationalized that the bank made a business decision to loan me the money, and I was making a business decision to get rid of the property at their (and my) loss. As much as I rationalized, however, it still felt like a huge failure.
With the new, lower price, it wasn’t long before we went under contract with a buyer. I hired a lawyer to negotiate the short sale and was just happy to see a light at the end of the tunnel. Then another bomb dropped. When the buyer went to get a loan approval from the approved lenders in the building, every lender told him they were no longer offering loans in that building. Our building was unique because when it was converted from an apartment building to a co-op, it took a 99-year lease from the D.C. government instead of outright buying the land. This meant instead of paying property taxes, the building paid a land lease to D.C. Prior to my purchasing the unit, someone in the D.C. tax office issued a property tax bill on top of the land lease. It went to tax court, and they decided in the building’s favor that we shouldn’t have to pay both.
When I bought my unit, none of this was disclosed to me because the court ruling should have solved it. After I bought the home, it was brought to my attention that the D.C. tax office was not recognizing the decision of its own tax court and proceeded to still issue us a bill. One branch of the D.C. government was not listening to another branch of the D.C. government for the expressed purpose of making my life a living hell. Had I known about this prior to buying, would I still have bought the home? Who knows?
But right now, the approved lenders were refusing to give out loans until the lawsuit was resolved.
Unable to get a loan, the buyer backed out. The home went back on the market but this time, it could only be purchased by someone with hundreds of thousands of dollars of cash. A month passed, and we found someone who had cash and wanted to buy the unit. I was racking up unpaid bills but at least there was a new end in sight. The contract went through the lawyer all the way to the final step of the short sale… and then was denied by the bank. The lawyer didn’t know why.
We re-submitted it, and it got denied again. The lawyer still didn’t know why. I got on the phone and waited and waited to talk to the right person at the bank to find out what the problem was. I finally got to the decision maker, and he explained that the loan owner, Fannie Mae, has a rule that any home with a second mortgage has a maximum payoff of $7,500 for the second mortgage. My home had a small underlying mortgage, about $20,000, for the co-op association which was technically in first mortgage position. So my big $200,000 loan was technically a second mortgage, and Fannie Mae was not approving that.
Basically, they told me I never had a chance at a short sale and had been wasting the last few months of my life.
If you’re still playing along at home, that means I paid out of pocket for an “expert” short sale lawyer who took my case and didn’t know the one rule that made my case un-winnable.
So I had a home I couldn’t sell, wasn’t allowed to rent, couldn’t get a regular loan on, and couldn’t do a short sale. I called my lender and said, “I give up. Please foreclose on the home, so I can move on with my life.” The lender responded that due to a law passed by the D.C. councilmembers, there was a moratorium on foreclosures in D.C., so there was nothing he could do. Another gift from the D.C. government! In a last-ditch effort, I implored the co-op board to take the unit back, so they could resell it, and I would be responsible for the loss. They said they would take no action.
So now I had a home I couldn’t sell, wasn’t allowed to rent, couldn’t get a regular loan on, couldn’t do a short sale, couldn’t get foreclosed on, and literally couldn’t give away.
My head was ready to explode. It felt like a bad hand of Texas hold ’em. Each flip of the cards forced me to stay in until the end when I lost all my money and was always going to lose to a better hand.
Meanwhile, my sales business continued to grow. But, boy, was it hard. Deals were falling apart more frequently. Buyers were backing out of contracts. Sellers were unreasonable about their home values. I was working three times as hard just to keep up. That year I met with nine people who wanted to sell their homes, but I advised them to wait because the values were not where they wanted them to be. I had four other sellers who put their houses on the market then decided not to sell. Not only was I not getting paid, but I was spending thousands of dollars in advertising their homes out of my own pocket with no return.
My hip and swanky brokerage office in Logan Circle got bought by a stuffy company. They asked me to re-interview for my job and told me they would pay me less. I had to wear a suit every day, and they had to approve any advertising I did. If that wasn’t bad enough, the new manager had the handshake of a dead fish. Following a leader with a bad handshake is a recipe for disaster. I wanted to leave. I kept grinding but I was burning the candle at both ends.
I needed a break but couldn’t stop or I’d fall farther behind.
I was working with a lovely pair of buyers, and over the course of home searching, the wife confided that she grew up in an area contaminated by hazardous waste and designated a Superfund site. She had cancer as a young woman and was very concerned about environmental contaminants in her future home. They backed out of one deal because the pipes were old and could potentially be contaminated with lead.
We identified another home and made an offer. The agent of the seller was the son of a well-regarded neighborhood expert, the kind of kid that could coast off the hard work of his mom. At each step he was abrasive and unprofessional, but we were able to get the home under contract. After we completed the inspection, we found out the home had a rare type of insulation called “vermiculite” that had become a known carcinogen. We requested that the seller remove all the dangerous insulation; his agent was belligerent. He would call me and leave long, angry voice messages for having to deal with the insulation problem. I was literally fighting to keep cancer-causing material out of the home of my cancer-surviving client.
Eventually we were able to get the insulation removed and go to settlement. Days later, I received a voice message from my buyer with tears of joy, thanking me for working so hard for her. She was happy and safe. A few days later, I got a call from my buddy, the owner of the little company I worked under. We had a problem. Although my owner was a broker himself, he also affiliated at the same company as the horrible agent’s mom. I didn’t work for their company but my boss occasionally did which was a legally grey area they didn’t want to deal with. They gave my owner an ultimatum: cut ties with me or cut ties with their company. Since he made more money from working with the other company, he had to cut me loose.
A friend would later tell me that either you make a decision or the decision is made for you.
I wanted a break, but it didn’t come on my terms; it was decided for me. Everything I had built over the last 8 years was falling apart faster than I could put it back together. It was time for a change, but I didn’t know what was coming next. I booked a trip with my wife to a yoga retreat to clear my mind. When I returned home, I was officially off the real estate grid.
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