Improvements Prior to Close: Ask a REALTOR®

Question
My daughter is buying a house in Utah. There is a $1,500 flooring allowance that she was told had to be used prior to closing. I do not understand why. She wants to put in flooring on the whole bottom floor of the house, which is more than the $1,500. Should she get a letter signed that if the house does not go through, she will be reimbursed for the extra flooring? Is this a normal routine? I have told her she should not do anything until the house has closed escrow. Thanks for your help.
– Mrs. Dobson

Answer
It is always a risk for a buyer to do any improvements before the close of the transaction. If for any reason the transaction does not close, there is a serious risk for the buyer (absent some written agreement between the buyer and seller for the seller to repay the buyer for the buyer’s out of pocket expenses for the improvements).

One way to get the improvements completed prior to the close of the transaction is for the seller to pay the vendor(s) for the improvements. If the transaction does not close, the seller will absorb the out of pocket costs. If the transaction does close, the costs of the improvements can be paid for by the buyer to the seller in the course of the closing (with an escrow or no escrow depending on the location of the property and custom and practice in that location).
– Karen Crystal

Karen Crystal, REALTOR® at Ewing & Associates Sotheby’s International Realty, specializes in estate properties. She brings a unique blend of efficiency, honesty, integrity and business- savvy to her clients.

Nicki & Karen

Recent Posts

A Step-by-Step Guide for Landlords Rent Collection Post-Eviction Process

Whether a tenant damages their unit or doesn't pay rent on time, there are many…

6 days ago

What You Need to Know About Landlords Holding Security Deposits in California

The monthly rent payments that are made as part of a lease agreement between a…

2 weeks ago

How Much House Can I Afford with a $100,000 Salary?

Before you begin searching for your dream home, it's a good idea to identify how…

3 weeks ago

Navigating Real Estate Litigation: A Comprehensive Guide

Real estate is a complex and valuable asset. When you become a homeowner, every mortgage…

4 weeks ago

The Best Month to Buy Furniture: A Seasonal Guide to Savings

Whether you're getting ready to move to a new home or upgrading the furnishings in…

1 month ago

Understanding Bi-Level Houses: Features, Benefits, and Considerations

If you're in the market for a new piece of real estate, you'll be able…

1 month ago