True or False: All repair work has to be done before the close of escrow?
False!
Depending on the type of loan your client has qualified for, it is possible to do repair work after the close of escrow. For Conventional loans (Fannie Mae and Freddie Mac), and non-health and safety issues, you can do what’s called a holdback.
A holdback is when escrow holds money until the repair is completed. Usually the holdback amount is for 1.5x the amount of the bill.
For example, I recently had a client whose termite report said that the garage door needed to be replaced since it was “crumbling under the weight of the termites.” He wanted a garage door that was more expensive than what the termite company and seller said was needed.
My client was able to get a credit from the seller and pay the difference for the upgraded garage door. This was done through a holdback and everyone was happy.
Don’t let little things ruin your deal!