Definition
Agreement withholding portion of sale proceeds until completion of seller obligations—repairs, cleaning, possession. Holdbacks secure buyer interests while motivating seller completion. Typically 5-10% of sale price.
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Holdbacks secure seller obligations like repairs, cleaning, possession. Typically 5-10% of sale price. Released after verification. Protects buyer from incomplete obligations. Motivates seller completion. Professional escrow agent holds funds. Clear holdback terms prevent disputes. Significant holdbacks strengthen buyer position. Seller may resist large holdbacks. Reasonable holdbacks are accepted. Timing for release critical. Written agreement essential.
Pro Tip
Holdbacks protect buyers. Use them for uncertain seller obligations.
Example
Holdback of $15,000 secured roof repair completion before release.