Escrow Holdback

An escrow holdback, also known as a repair escrow, is a financial arrangement used in real estate transactions. It involves setting aside a portion of the buyer’s closing funds in a neutral third-party account (escrow) until specific repairs are completed on the property. This arrangement ensures that necessary repairs are addressed before the sale is finalized. It protects the buyer’s interests by guaranteeing the funds for repairs are available and incentivizes the seller to promptly complete them.