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Real Estate Matters: Homebuyers struggle to obtain escrow money to fix issues after sellers move

Ilyce Glink and Samuel J. Tamkin, Tribune Content Agency on

Q: My wife and I bought a house in Maryland in early July 2022. The sellers wanted to stay in the house rent free for 30 days. They put up a $2,000 security deposit. After the sellers moved out, we found they had removed a light fixture, damaged a wall while removing an art object, and hired a contractor to do tree work without our prior approval.

We had to replace the light fixture, paint the room where there was wall damage, and pay the tree contractor. The cost to us was over $1,700 and we have the receipts for these items. The escrow agent will not release the funds saying that the tenant (previous owner) has to agree.

The tenant moved out of state and we don’t know how to reach them. Four months have passed. The escrow agent offered no help and seems willing to hold the money indefinitely. Do you have any advice?

A: It isn’t always fun and games being a landlord, whether you’re renting your home for two days, two months or two years. There are always risks, whether you’re an investor renting a property you own or a buyer renting back to the seller after closing.

In some real estate markets, the form contracts provide that the seller must pay the buyer a daily fee equal to the buyer’s carry cost for the home. This includes principal and interest on the loan, and a proportionate share of real estate taxes, homeowner’s insurance and homeowners association assessments. In addition, the seller may have to put into escrow up to 2% of the purchase price of the property.

While you received a security deposit of $2,000 from your seller, you didn’t get paid for your carry expenses. We understand that in some areas of the country, buyers often agree to allow the seller to live in the home rent free for a period of time after closing to make the deal happen. You should have made sure that the security deposit was substantial enough to cover any potential problems with the home and ensure the seller moved out in a timely fashion.


Buyers who allow sellers to rent the home post-closing won’t have the opportunity to view the home vacant before closing, as the seller will still be living there until they give up possession of the home sometime after the closing. When a seller causes damage to the home before the closing, the buyer can hold up the closing until the buyer and seller resolve the issue of the damage to the home.

Most real estate contracts provide that the seller needs to deliver the home in the condition the home was in as of the contract date. Furthermore, the buyer usually conducts an inspection of the home just before the closing and (hopefully) after the seller has moved out. If the home passes inspection, then the buyer will close. But frequently, buyers may ask sellers to make repairs to the home resulting from the final walk-through or request a closing cost credit to take care of those inspection items.

Here is where it gets tricky. Buyers typically hire a professional home inspector during the purchase process. If there are issues raised in the inspection, the buyer typically asks the seller to make repairs or reduce the price to compensate for those issues.

When that happens, buyers should not then come to the closing asking sellers for more money if the home has no new damage. But often, when buyers see the home empty, after the seller has moved out, they see other things wrong with the home. And they expect the seller to take responsibility for those items.


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