A few days before closing, the buyer’s lawyer receives the Real Property Report (RPR).

There’s a problem.

Maybe the RPR is outdated.
Maybe there’s an encroachment.
Maybe compliance hasn’t been obtained.

The solution that often gets suggested at this stage?

“Let’s just do a holdback.”

But here’s the challenge.

By the time the lawyers are discussing a holdback:

• The purchase contract is already signed
• Moving trucks are booked
• Mortgage funds are arranged
• The buyer has very little leverage

In other words, the buyer has almost no leverage left.

So the buyer is effectively left with two options:

1️⃣ Delay closing while the seller obtains a new RPR and compliance (which can take weeks or months).
2️⃣ Accept a holdback amount and hope it’s enough if the issue turns out to be expensive to fix.

Neither option feels great.

And here’s the reality most people don’t talk about:

A small holdback doesn’t eliminate the risk. It often just caps the buyer’s protection.

A $3,000 or $5,000 holdback might sound reasonable in the moment, but the cost of fixing some compliance issues can be far higher.

For example, where a garage or addition was built without permits and the municipality will not approve it after the fact.

In those cases the only solution may be to tear down the structure entirely to bring the property back into compliance.

That kind of fix can easily cost $20,000–$60,000+ depending on the structure.

A $5,000 holdback doesn’t come close to covering that risk.

The truth is that by the time this issue reaches the closing table, the lawyers aren’t really negotiating.

We’re trying to manage the consequences of a problem that surfaced too late in the transaction.

The best transactions solve these issues much earlier during the offer stage, when there’s still time and leverage to negotiate a proper solution.

One simple question early in the deal can prevent a lot of stress later:

“Do we have a current RPR with municipal compliance?”

I’m curious how other agents approach this.

When RPR issues come up late in a transaction, do you find letting lawyers negotiate holdbacks works well, or do you prefer to address the holdback amount during negotiations?

Genuinely interested in how others handle this.

Need help with RPRs?
📞 Reach out to me anytime! 587-570-7428

-Erin