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Escrow Holdback Agreement Addendum

An escrow holdback agreement addendum sets rules for money that is "held back" until the seller of a property fulfills their duties after closing. The agreement outlines tasks that must be completed before the seller collects the final payment. A title or escrow company typically acts as an intermediary and releases the funds to the seller.
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Updated December 03, 2024

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Escrow Agent – The title company, lender, agent, or other third (3rd) party should act as the middle-person. It is not recommended to elect the buyer or seller to act as the intermediary or holder of the escrow funds.

Interest Earned – Per the Internal Revenue Service (IRS) Code, any interest accrued while money is being held in an escrow account for the purchase of property shall be paid to the benefit of the buyer.[1]

Sources

  1. 26 § 1.468B-7(b)(1)(iv)