Throw caution into the wind; Repairs in Escrow when closing on your home
Calling all Realtors & Buyers…. There are times when in a purchase contract, after the home inspection, some repair issues could arise. This is when the buyer is wanting specific repairs to be done to the home in order for them to feel comfortable buying the property. In most cases the seller is more than willing to do the repairs and/or give a seller credit to help with the cost of repairs after closing. In some cases, the option is discussed by the parties to put the cost of repairs into an escrow account at closing with the title company, in which the funds are set aside from the seller for the buyer to make the repairs after closing.
Word of caution… any health or safety issues that are needed done should be addressed with the lender prior to assuming this is acceptable. Why? Because depending on the loan program, many investors will not allow a property to close if the repairs have anything to do with a health or safety issue. So it is best to ask your lender if the repair would be allowed. Last thing you want is to delay and/or jeopardize a closing when the settlement statement comes out and there is an escrow holdback that the lender’s closing team questions and learns is a major deal. Also, if the seller is going to give concessions to offset repairs, make sure with the lender those concessions don’t, in turn, cause the total seller concessions to exceed the allowable loan program concessions.
If you have any questions please give us a call we would be more than happy to help.