Can a Seller Escrow Funds at Settlement for Home Inspection Repairs?
If you are a buyer of a home and want the seller to pay for home inspection repairs, but want to oversee them yourself, you may be asking this question. The answer is easy if you have an FHA or VA loan. No! No escrows for repairs allowed by FHA and VA. Conventional loans may allow money for repairs to be escrowed, but just about every lender I've ever encountered prefers to see the buyer get the funds as closing cost help and not have it connected to home inspection repairs.
Another solution buyers may propose is to have the seller pay for repairs up front, and have them done later, again so they can supervise. I don't recommend this approach, particularly since I have lived through the worst possible outcome as a buyer. The contractor paid to replace a small standing seam roof over a bay window disappeared with the seller's money and NEVER did the repair.
As a general rule, if a repair is important enough for you as a buyer to want to oversee the work, then take the money as closing cost help and hire the repairman yourself.
Chris Ann Cleland, Associate Broker- Licensed in Virginia, GRI, SFR, Northern Virginia Short Sale Specialist. Affiliated with Long & Foster, 7526 Limestone Drive, Gainesville, VA 20155. To contact Chris Ann, call 703-402-0037 or email chrisann@LNF.com. Or you can visit her website: www.nvarealestate.net.
Header photos taken by Chris Ann Cleland.
The opinions expressed in this post are those of Chris Ann Cleland, not those of Long & Foster REALTORS®.