What is an Escrow Holdback?

What is an Escrow Holdback?

An escrow holdback is a portion of the funds from a real estate transaction that is retained in an escrow account to ensure that certain conditions or repairs are completed after the closing of the property sale. This financial arrangement is often used when a property requires repairs that couldn't be completed before closing, or when compliance with certain agreement terms needs to be guaranteed. The funds are held back by an escrow agent and only released to the seller once the specified conditions are met, providing security for the buyer that these issues will be addressed in a timely and satisfactory manner.