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Many times when purchasing a foreclosure, the home will be missing some items.  Some things are required for a mortgage lender to lend on the property.  Or give you a mortgage.  One of these items is the oven.  A home must have an oven to get financed.  But what do you do if the home doesn’t have one and the seller won’t install one?  Your answer is the Escrow Holdback, and here is how to structure the escrow holdback  in regards to the oven:

1.      Seller- When negotiating the contract you can ask the seller to do an escrow holdback.  This means they will give the buyer the money for the oven at closing.  But the money will be held in an escrow account with the title company.  Then once the loan has funded, the title company will issue that money to a 3^rd party to install the oven.  The buyer’s mortgage company will probably verify that the oven has been installed, after closing.  And your problem is solved

2.      Buyer- Unfortunately, many banks or lenders that have foreclosed on properties do not want to do an escrow holdback.  If that is true we can structure it so the buyer brings the additional money for the oven to closing.  He will give it to the title company and after closing the title company will issue the money to a 3^rd party to install the oven. 

3.      HUD foreclosure-  If the property is a HUD foreclosure AND the borrower is utilizing FHA financing, the repairs can be rolled into the loan, subject to a few minor conditions.

A small thing like a missing oven can become a big problem when financing a home.  So  knowing how to address it is very important.  Other issues can keep a home from getting financed besides an oven.  An AC unit is another great example and it can be handled by using an escrow holdback.  Call me today to find out how you can use the Escrow Holdback to sell more homes!!