A repair escrow agreement, also called an escrow holdback agreement, is an addendum that holds back part of the sale money until the seller finishes agreed repairs. It works as a safety net for both sides, whether the property needs many repairs or just a few. Add it to your printable purchase agreement form, then use the free template on this page.
Last Updated: October 2026. This guide is reviewed and updated regularly to reflect current law. If you notice an error or outdated information, please contact us.
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You might also hear the repair escrow agreement referred to as the escrow holdback agreement. Oftentimes, a seller will promise to make certain repairs or improvements to the home as part of the purchase price.
The buyer’s money will then be set aside until the seller fulfills his agreement. This money will be held back from the seller until they complete all of the repairs that were listed in the original contract.
The money is usually kept with a company, bank, or moneylender. This way, the buyer knows that the seller has the money and has already given it up in exchange for the repairs. The third party will hold onto the money until the seller is finished with their end of the bargain. These parties such as the bank are referred to as escrow agents.
A repair escrow agreement adds transparency and fairness to a real estate transaction, because both sides can see that the repair money is set aside until the work is done.
Repairs covered by the agreement can include:
A repair escrow agreement keeps the repair money safe while the Seller does the work promised in the Purchase Agreement. It spells out which repairs are covered, how much money the Escrow Agent holds back and when the Buyer and the Seller can expect it to be released.
You should use this addendum to real estate purchase contract whenever the seller has promised to complete repairs or work done on the home. They should be agreed upon before the sale so that the buyer knows exactly what the home will look like when they move in.
The buyer gives the money for the repairs or renovations to an escrow agent. This shows the buyer that there are enough funds to complete all the agreed-upon work. The agreement should also have an explicit timeframe to ensure that the repair work is done promptly.
The range of situations where you may need a repair escrow agreement is large, but there are some general situations where they will always be needed:
If you are experiencing any issues and aren’t sure if you need a repair escrow agreement, contact your real estate agent. They should be able to advise you on what’s necessary and make the best plan for your situation.
Each repair escrow agreement is a little different, but most cover the same parts. Listing them clearly helps both sides reach the same understanding. The agreement is typically attached as an addendum to an existing contract.
It’s also a good idea to work with a lawyer or real estate agent to draft the agreement. This way you can be sure that the agreement has all the necessary factors.
A repair escrow agreement usually has these parts:
A section will usually be dedicated to the buyer and their personal information. This will include their full name, address, and a few other items.
The seller will also need to include their information such as their full name and address. Make sure that the information is listed exactly the same as in the original agreement so that everything matches.
This should be why the repair escrow agreement is being drafted and what the agreement is for repairs and other home fixes. You can refer to the original sale agreement to help you draft the addendum and the purpose for it.
You should also include the original date of the agreement and the escrow agent information. Make sure it has their legal name or company name and their contact information.
This is where all the seller’s responsibilities will be listed and all the repairs and works they are expected to complete. It should also list the monetary amount that is expected to give out for the expected repair work.
This is where you will list the actions and responsibilities expected by the escrow agent. It should also list the commission fee or other form of payment they are receiving for working as the escrow agent.
The signatures of the buyer, seller, and escrow agent will all need to be included. They should also print their name and date the day they are signing. Make sure the signatures and the printed names match the original document.
The template has nine parts to complete, from the date and parties at the top to the signature blocks on the last page. Work through them in order. You can type into the downloaded PDF with the FormsPal PDF editor or print it and write by hand.
The screenshots under each step show the FormsPal Repair (Holdback) Escrow Agreement template filled with sample entries in blue, so you can see where each answer goes. The names, addresses, dates and amounts are examples only.
Enter the date of the addendum at the top. Then write the name and mailing address of the Buyer, the Seller and the Escrow Agent.
Enter the date of the original purchase agreement. Then write the street address of the property.
Write the dollar amount that is held back from the purchase price and placed in escrow at closing.
Tick whether the holdback is kept in an interest-bearing account. Then enter the Escrow Agent’s fee in dollars.
Tick Buyer, Seller, Buyer and Seller equally, or other. If you tick other, describe the arrangement on the lines.
Tick the written approval option, or tick the date option and enter the date and the person who receives the money.
Tick the conditions option and write the conditions on the lines below it.
The Buyer and the Seller each sign in their own block. Print the Name and Title under each signature.
The Escrow Agent signs and prints the Name and Title. Sections 4 to 6 have nothing to fill in.
Buyers and sellers often ask the same few things when they add this addendum to a Purchase Agreement, such as what happens if repairs are refused, which Escrow Agent holds the money, what it costs and how it is released.
If the seller refuses to make repairs, you might want to consider contacting the real estate agent. They might advise you to contact a lawyer or take legal action. If you’re able to void the contract and the seller is becoming too complicated to work with, you could also end the agreement and move on.
It is also called an escrow holdback agreement. Both names describe the same arrangement, where money is held back from the seller until the agreed repairs are done.
The escrow agent named in the agreement holds the money after closing, such as a bank or an escrow company. The agent releases it using the option chosen in Section 3 of the template.
At closing, the template sends the holdback amount to an escrow account with the escrow agent instead of to the seller. The money stays there until the release option you chose in the template applies. The deed is a separate document, and FormsPal also has deed forms to browse.
The main cost is the escrow agent’s fee. The template has a line for the fee amount and a checkbox for who pays it. Other costs depend on the agent you choose.
The template has a checkbox for this. Tick whether the holdback amount is kept in an interest-bearing account.
The template lets you tick the Buyer, the Seller, both equally, or another arrangement that you describe.
The template offers three options. Tick the one that fits your deal.
General information, not legal or tax advice.
