An escrow holdback is a portion of sale proceeds held back post-close for a defined period, pending satisfaction of specific conditions — open repairs, tax issues, or rent collection verification.
Common holdback scenarios: specific repairs identified at inspection that weren't completed before close, pending property tax assessments, unresolved tenant disputes, or tenant-level earnouts. Holdback terms specify trigger conditions and release mechanics.
LA multifamily escrow holdbacks typically run 30-180 days. Common amounts: $25,000–$250,000 depending on issues being held back for. Clean transactions have no holdbacks; complicated transactions may have multiple.
From the Sterman LA Multifamily Glossary — defined the way a broker with $1.41 billion across 254 closed transactions actually uses these terms.
Michael Sterman, Senior Managing Director Investments, Marcus & Millichap.
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