Do we release funds early from escrow?
July 16, 2011 6:00 PM Subscribe
We are purchasing a house. The seller is asking us to release some of our deposit in escrow to him before closing. Is this a good idea? Read the details...
posted by rybreadmed to home & garden (32 answers total) 5 users marked this as a favorite
We are in escrow to buy a house. The seller purchased the house 9 years ago without any loans, but never paid property taxes. He rented out the house up until 5 months ago. His renters moved out in the middle of the night (supposedly) and he moved in.
During this process, we've found that he is pretty irresponsible with money. He has to sell the house because he never paid those property taxes, and he has no cash to pay it now.
The seller's agent has asked our agent to ask us if we could release some funds early from escrow to him so he has money to move out with. If we did, we'd be able to start moving into the house early--before closing. Closing is August 4th, so it'd be nice to be in the house a couple weeks early. We have a lot of work to do and crap to move to the house. However, I don't like the idea of releasing money early from escrow. After a discussion, my wife told our agent that we were not releasing funds early, and we want everything (including closing) to stay on track as had already been discussed. I feel that she's basically asking us to give up something pretty major with potentially negative results. If the deal falls through (which it most likely will not because we're all set to close), we'll lose whatever money we released to him.
Now, our agent called me and left a message. She again stressed that the seller has no money except for what he'll make in the sale, and won't be able to move without money we release from escrow. She said he may need to rent the house from us for a couple of weeks, or that he won't be able to move out until the close of escrow.
Renting out the house is not an option. However, my wife is feeling a bit pressured to release some of the money early. Besides, it'd be convenient to get into the house early before closing.
Just to clarify, everything else looks nearly perfect. The loan is funded, house passed inspection, and I can't think of any reason that the deal WOULD fail.
I discussed with my wife, and agreed to ask the Metafilter community. So, is this weird? Is there anything we can do to secure our interests in case the deal falls through and he has our money?