Realtor Resource Centre
What we need from you, when you will hear from us, and how to write a holdback the lender will accept.
Negotiating repairs? Read this first
Repairs written into an offer the wrong way can hold up financing. There are two clean ways to handle it.
Best option
Buyer does the work
If your buyer is happy to handle the repairs after possession, negotiate a lower purchase price instead. No holdback needed. Send us the price amendment right away, since the lender still has to approve the new price.
If the seller does the work
Use a holdback clause
The seller finishes the work before possession. If it is not done, money is held back until it is. Use the wording below so the lender will accept it.
The rule lenders care about: no money ever goes directly to the buyer. The buyer's lawyer holds the funds, and the buyer is reimbursed only by giving the lawyer receipts for completed work. Any unused amount goes back to the seller.
Sample 1: one repair
Seller will have the following repaired or replaced prior to possession, by a licensed professional, with receipts provided prior to possession: Seller will repair or replace the damaged garage door at the Seller's expense prior to possession. In the event the work is not completed before the possession date, the Buyer's lawyer will hold back $[amount] and the Buyer will be able to complete the repair or replacement and submit invoices to the Buyer's lawyer for reimbursement. Any unused portion of the holdback will be returned to the Seller within 30 days of possession.
Sample 2: several items, done by a professional
Seller will have the following repaired, replaced or cleaned prior to possession, by a licensed professional, with receipts provided prior to possession: (1) The furnace serviced and repaired by a licensed professional. (2) The carpets throughout the home professionally cleaned. The work will be done at the Seller's expense prior to possession. In the event the work is not completed before the possession date, the Buyer's lawyer will hold back $[amount] and the Buyer will be able to complete the work and submit invoices to the Buyer's lawyer for reimbursement. Any unused portion of the holdback will be returned to the Seller within 30 days of possession.
Highlighted text is the part lenders read most closely: who holds the money, how it is released to the buyer, and how any unused amount goes back to the seller.
REALTOR® Holdback Clause Writer
List the work and set an amount to get sample holdback wording to review with your buyer.
Your sample wording
This is an example to help you, not legal advice. The key part is how the holdback funds are managed: held by the buyer's lawyer and released only against receipts. Lenders look for that line. Please consult your Broker or Lawyer before using any wording.
Realtor FAQ
When will I hear from you on my buyer's file?
At four points: when the file goes to the lender, when it is conditionally approved, when all conditions are met, and when it funds. You will get an email from us at each one.
What do you need from me to submit?
The signed purchase contract, any amendments, the MLS listing, and the condo documents if it is a condo. Once conditions are removed, please send the signed waiver too. Sending documents the same day they are signed saves days.
Is a pre-approval the same as an approval?
No. A pre-approval checks the buyer. A full approval also checks the property, and the lender can add conditions after seeing it.
How long should the financing condition be?
We recommend 7 to 10 business days. That gives enough time to satisfy the lender's conditions, book an appraisal if one is required, and cover lender turnaround times when volumes are high.
Can my buyer make an offer with no financing condition, or no conditions at all?
That is the buyer's decision. We typically recommend including a financing condition, and a home inspection condition, to protect the buyer as much as possible. Even with a pre-approval, the property itself is still subject to lender and insurer approval.
Can my buyer add a holdback to the offer?
Yes, if it is written so the buyer's lawyer holds the funds and releases them against receipts. Use the samples above and call us first.
What if the appraisal comes in low?
We call your buyer right away to go over the options: a different lender, a larger down payment, or renegotiating the price. You are always welcome to call us to talk it through.
Can my buyer change jobs or buy furniture before closing?
It is possible, but please ask your buyer to call us first, before they decide. A new job, a new loan or a big purchase on credit can change the approval, even after conditions are removed. A quick call lets us check it will not affect their mortgage.
Who handles closing on a purchase?
The buyer's lawyer. We introduce the lawyer early, send them the lender instructions, and keep you updated until funding.
Questions?
Call our team and we will do our best to answer: 403-648-1541
Email us at hello@lacroixmortgage.com
Working on a live file? Reach out directly to the underwriter on that file.