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Dan Horn, Associate Broker at Coldwell Banker Schulz Realty and founder of Team Success Listing, addresses common client questions in a weekly video series. In this week's episode, he explains what a repair escrow is. Essentially, it is when the title company withholds funds from the buyer at closing to cover repair costs, releasing them to the contractor once the repairs are completed. Different rules apply for FHA and HUD, but for a conventional mortgage, this process ensures that necessary repairs are addressed before closing. An example is given of a house purchase in Lapeer during winter, where inspection revealed issues that needed to be fixed before closing.
