I am supposed to close on March 1st, but the appraiser said the house needs painting before approval for loan.
I have to get an estimate for painting and then they will do an escrow holdback. I think closing will still be the same date and I will have 30 days to get the house painted. Has anyone dealt with something like this before?
My lender will do escrow holdbacks, they told me to get the paint estimate. I am not working with a RE agent, just wondered what to expect with the escrow holdback process.
We bought our house using a VA loan four years ago. The closing month was April. One of the conditions that needed to be met on the appraisal was the outside of the house needed to be painted. Because of the weather our loan officer said we could to an escrow hold back so that we wouldn't delay closing. We got three or four estimates. The challenge was finding a painting company that would do the job and then wait to be paid from the escrow company. Of the four estimates three required a 50% deposit. While we were going to have the money in the escrow account we could have hired any one of these, paid the 50% deposit out of pocket and then when the job was done the balance would have been paid from the escrow account and any remaining escrow balance refunded to us.
But instead, the fourth estimate had done jobs before with escrow holdbacks and didn't require us to pay anything up front. Of course he was also the most expensive esitmate. In the end we chose this company. We submitted the estimate to the loan officer. Then we needed to deposit 120% of the estimate into escrow. The extra 20% is a buffer in case there is an unforseen thing and the cost goes up a little. We talked our loan officer into allowing 90 days to get the job done. This was really easy because the paint contractor said he was booked out at least 45 days, and of course weather is unpredictable.
We closed on our house in April as planned. One week later we scheduled the paint job. Three weeks later the paint job was done and we submitted the receipt to the loan officer. He sent someone out to verify the house was painted. Two weeks later the paint company received their check and we received the balance of what was left over in escrow.
All in all it was pretty easy.
My suggestion is to see if you can get more than thirty days. Forty five, sixty, ninety? Weather is very unpredictable. Plus you need scheduling time (check with your contractor) and time to get the work done. In the event that you do not get the work done in the alloted time then the loan officer will hire someone and pay them out of your escrow.
Hope this helps.