Escrow for repairs?

**cckirkland** · 03-14-2011, 06:03 PM

We are buying a house with conventional financing (10% down). The seller is contributing 6% of the sales price towards closing. I was hoping to have the seller set up an escrow account for repairs. I would prefer to oversee the repairs and make sure they are done the way I want them done. Our mortgage broker told us we could not do this because of the 6% they are contributing to closing. Is this right? I dont see how the money for closing is related to an escrow for repairs. We are in Houston, Tx by the way. Thanks for the help

**Greg** · 03-17-2011, 05:15 AM

If the underwriter finds out the house needs repairs then they might not finance the loan. Putting the money in escrow will notify the underwriter that the house needs repairs.

Plus, it might look like the seller is just giving you more money and there is a limit to how much the seller can contribute to the transaction.

Your choice is to have the seller do the repairs or have the purchase price reduced by the amount of repairs.

If the repairs are substantial then you might want to find another house.

**joeulman** · 03-17-2011, 08:23 PM

You do not have any friends is a lawyer? Perhaps the lawyers can help you

**jumpingspidermedia** · 03-18-2011, 03:36 PM

You better consult a real estate lawyer to have a better understanding,and they'll probably can help you!

**EugeneRealEstate** · 03-21-2011, 03:04 PM

The first responder is correct. Usually the seller can only contribute up to 6% to the buyer. Wether you use it towards closing cost or repairs makes no difference. Anymore and you could run into some major problems with your lender. Try having the seller make the repairs before closing using your contractor.