Editor’s note: This post has been updated in 2026 for accuracy and current market conditions.

Sometimes an appraiser calls for repairs to be made to a home — typically for safety or habitability reasons. Depending on market conditions, a seller may or may not be willing to complete those repairs before closing. If the buyer has enough funds available, one option is an “escrow holdback.”

An escrow holdback is when funds are held back at closing to cover the estimated cost of repairs. The buyer brings the holdback amount to escrow (or sometimes to the lender), and those funds are held until the work is completed after closing. [Read more…]